Is Windows Mobile a Threat to Research in Motion?

Research in Motion (RIMM) said Tuesday that is adding Application Programming Interfaces to the BlackBerry Java Development Environment [JDE].

As Russell Shaw notes in Blackberry Beat RIM's move is designed to stimulate more third party applications development. Russell also outlines the details.

The big question is why RIM is adding more APIs. My hunch: RIM is worried about Windows Mobile's encroachment. Let's say for argument's sake that the Palm OS ultimately disappears.

That would leave RIM and Windows as the only mobile game in town. Traditionally we know how those OS battles work out.

Admittedly, my hunch may be reading too much into a few new APIs from RIM, but it does make you wonder. Meanwhile, the API announcement comes on the same day as a research note from a firm called ICAP.

In the note, analyst Richard Williams reiterated a sell rating on RIM shares and said "channel checks suggested a shortfall in BlackBerry sales in the quarter. The impact of Microsoft (MSFT) competition could be significantly more serious than expected."

Williams doesn't share the consensus view with other Wall Streeters, but his points are interesting.

His most important point:

"With the recent upgrades to the Windows Mobile platform, Microsoft can now offer virtually free push email capabilities, a key competitive advantage of RIMM’s and subject of at least part of the NTP patent infringement suit last year. The ability to send Outlook messages to any compatible device could erode RIMM’s ability to charge for software at the server level that provide push email to BlackBerry devices, hurting margins and earnings."

Williams wrote that with 6.5 million copies of Windows Mobile 6 already in the market RIM is likely to get squeezed. Meanwhile, Williams reports that Samsung's BlackJack (review) may be outselling the Pearl and Blackberry by a wide margin as corporate users go with Samsung.

If Williams' theory is correct (and it may not be as new Blackberries are rolled out) then RIM will need those third party developers and all those APIs to keep ahead of Windows Mobile. If the RIM OS is on par with Windows Mobile it's highly likely Microsoft wins.

Comments

[John Lazerow:]

Security, security, security. I'll believe RIM is doomed when I see Windows Mobile receive a ton of security clearances from various governments. This will never happen because windows mobile suffers from the same issues as their desktop OS. In the corporate world, this is of significant importance. Also, Windows "push" email is nothing of the sort. It is an automatic sync. The mesages stay at the mail server and sync with the device when a new message comes in. What happens if you go out of coverage when syncing? You can lose the email as the server thinks it has been synced. Not totally reliable.

Blackberry messages are queued at the NETWORK level, not in the mail server. Anytime your device is on the network, it starts sending the data. It is actually called guaranteed messaging. Any responsible business would be willing to pay a little to get that security blanket.

The last thing one must remember as well is that ultimately demand comes from the end user. Blackberry users are notoriously loyal. I can't speak to Blackberry device sales during the last quarter, but I can tell you in their most recent press release regarding their options restatement, there was a sentence at the end that made me take notice. It said RIM added OVER 1 million new subscriber accounts in the last quarter. They had guided to 950,000 to 975,000 so this seems like they are executing well.

2007 Mar 28 10:18 AM

[Tom B:]

Opening the OS more (if that is RIMM's intention) is the wrong direction to go in. Blackberry will never be as insecure at Windows Mobile, surely, but why risk moving in that direction?

2007 Mar 28 11:54 AM

[Eye Forget:]

I just purchased my first (and last) Windows Mobile phone. While I have a bias as I'm a Mac user, its Windows through and through. Poorly organized, endless pressing through menus to get the most basic of cell phone functionality, a defacto reliance on 3rd party software as the MS bundled software is borderline useless and I can boot my Powerbook off the battery faster than it takes this phone to boot.

Yes Palm's OS is buggy and obsolete. Windows Mobile is not a solution.

2007 Mar 28 10:33 AM

[Tom B:]

RIMM's only way forward is to shoot for the low end, so they won't be in the iPhone's space. As you point out, Palm OS is in trouble, but Windows Mobile is arguably even more moribund.

2007 Mar 28 11:27 AM