Exchange Email Integration: RIMM's Lifeline in an iPhone World

I have long felt that since the introduction of the iPhone, Research In Motion (RIMM) is a dead man walking (ok, it's walking pretty well for a dead man so far). The iPhone is far too elegant and its software bound to be too rich in breadth and depth for RIMM to compete in the long haul. The internet experience with Safari on the iPhone is a competitive advantage RIMM cannot match along with the software base of OS X.

RIMM, however, understands the business enterprise market and knows how to connect with Microsoft (MSFT) exchange. Nonetheless, I really don't think that given Apple's (AAPL) $18 billion in cash it will be too long before Apple figures out how to integrate with Exchange. Once it does, goodbye RIMM.

What then should RIMM do? Take Apple straight on by trying to match iPhone with new hardware and radically revive and extend its specialty OS to compete with OS X? That would be very hard to do.

What if instead RIMM decided to ask itself 'what do we do well?' The answer: enterprise email software integration. So what does the platform matter? RIMM might want to put its software application on the iPhone and charge customers $100 for the application. The new open SDK to be announced on March 6th should make this possible. If there will be 100 million iPhones sold in a few years, that's real money.

They could also continue to sell Blackberries to consumers who want buttons (and to carriers like Verizon (VZ) who are on the outside) though that market will likely decrease with time. They might also be able to negotiate a $1-$5 monthly fee for their service along with charging for the iPhone application. In business this is called a win-win. Apple doesn't have to reinvent an enterprise email application, but instantly gains millions of new business customers for the iPhone. AT&T (T) laughs all the way to the bank and RIMM leverages its software with minimal risk and remains viable for the long haul, unlike what is happening to Palm (PALM). Clearly this is asking for the sun, stars and moon to align, but business has always made strange bedfellows.

If Microsoft can prosper selling Office for the Mac, I am sure RIMM can see the advantage of providing exchange email integration for the iPhone. In fact they already offer Blackberry Connect for Palm, Symbian and Windows Mobile. Maybe the stars, sun and the moon will align after all.

Comments

[PopTheBubble:]

So what mystical force is pushing AAPL stock DOWN today?? Amazing, isn't it?

2008 Mar 05 10:46 AM

[Nick Arraje:]

Why do people assume the iPhone doesn't work with exchange already? We have several people in our office who use iPhone and other who use Blackberries and they all seem to work very nicely with our Microsoft exchange mail server.

2008 Mar 05 10:50 AM

[JerseyGuy:]

You suggest in your article that RIMM can do this with no downside. You suggest that by embedding their enterprise email into the iPhone they will instantly gain many new users. Where do you think these users will be coming from? Since new users are not being invented daily, they will have to come from existing universe of enterprise email users who are in all likelihood using Blackberrys. Wouldn't that cause RIMM to transform existing customers who are paying hundreds of dollars to ones who are paying them tens of dollars? If the iPhone had a market of hundred million users perhaps this could still be a better deal for RIMM, but that is not the case and may never be.

2008 Mar 05 11:21 AM

[lawnboy:]

another example of when a journalist does not understand the architecture, accesibility to, and protocols surrounding Exchange communications.

2008 Mar 05 11:40 AM

[samij:]

why apple haven't figured out how to connect the desktop osx to exchange with it's 18b cash pile?

2008 Mar 05 12:49 PM

[RK:]

I agree that prospect for RIMM 5 years out is not good if it keeps its proprietary hardware and software platforms. Putting an Outlook like application on iphone does not address that fundamental problem, unless it is part of the platform diversification plan, in which case RIMM may do well to go beyond the OS X platform.

Of the existing mobile platforms today, Symbian, Windows mobile, OS X, Blackberry, LiMo, and Android, Android and Blackberry are the most vulnerable. The market does not need 6 mobile platforms; 4 is already too many.

2008 Mar 05 12:52 PM

[gofer:]

'an iPhone world?'...

'Motion (RIMM) is a dead man walking?'

Ah Richard. The 'reality distortion' field is strong with you. A true and devoted fan you truly are.
Remember to keep your faith strong, and to face the light always...
No, that's not Steve Jobs. It's called the sun...
Yes the sun.
When your iPhone shows 6:05 a.m. it rises. When iPhone shows 6:20 p.m. it sets again.
Yes, that's it.
Now look at it every day... and be strong always!!

2008 Mar 05 01:27 PM

[User 160510:]

Your research in this article is pretty naive. Apple does not need to simply "figure out how to integrate with Exchange." RIM does way more than that. The BES and BIS services are what give RIM its edge and it would be no small task for Apple to build competitive offerings to those. Even if they do, it's quite possible it wouldn't have the reliability or ease-of-use that sells Blackberries to consumers, and infrastructure to IT depts and mobile operators.

2008 Mar 05 01:41 PM

[.crazylegs..:]

This article is myopic and completely misses the mark. This is not a one or the other scenario, not a binary situation of iPhone or Blackberry. Look at the global smartphone market which weighs in at roughly 130 million units and growing at 30% per year. This will enable both Blackberry and iPhone to prosper. RIM is so far from a dead man walking that you would be well advised to go out and acquire some shares. The global smartphone market in 5 years (when RIM is supposed to be dead) will approach 500 million units. RIM is pounding the pavement adding new carriers all the time which will keep growth going as the secular smartphone movement grows.

When you can get a Blackberry pearl or curve for $99, or $129, respectively, many smartphone users will choose the Blackberry. iPhone will take a while, if ever, to get down to those price points given the complexity of the device itself. And remember that only about 10% of the corporate market is penetrated, so that suggests plenty of business for both. Relax guys, it's going to be fun for the next few years for both. This guy is obviously isn't that educated on RIM's features as it goes way beyond Exchange/Lotus notes integration. Until Apple can deliver similar functionality, the large enterprise space is RIM's while the small and medium sized business space will be up for grabs with company specific needs trumping individual emotional fancy. I own both stocks, have for a while, and will for the next few years.

2008 Mar 05 01:43 PM

[Softie:]

I can't help but laugh at your posting Richard. Microsoft, which is supposed to have crushed Blackberry long ago still hasn't -- and they have billion$ more in the bank than Apple, thousands more developers in the enterprise, owns Exchange, has hundreds of handsets running Windows Mobile and many more carrier relationships than Apple. Have you ever stopped to think that maybe Blackberry gets it and no one else does?

2008 Mar 05 06:16 PM

[atlasapple:]

I don't use a Blackberry, but every user I show my iPhone too loves. They are mostly not IT types and their only criticism is the lack of "push" email.

As soon as Apple figures that part out, iPhone sales will explode. My sister's firm will buy 30 once that happens (assuming her IT peeps give her the go ahead).

I guess will have to wait until tomorrow to see where we stand.

2008 Mar 05 09:58 PM

[brewer:]

iPhone just got exchange support, built in directly. Tons of other features, plus the development kit runs on Mac OS X--the Mac market is already exploding.

RIMM is truely a dead man walking, it's just that many of it's investors don't realize it yet. RIMM is like 80's tech compared to iPhone. Microsoft? Don't make me laugh, they have never done anything original, there is no one to copy yet (it takes them about 10 years to come up with a weak copy of Apple's work.)

2008 Mar 06 01:58 PM