It has been a rough few years for Research in Motion, the maker of the Blackberry line of mobile devices. Since Apple
entered the mobile phone market, RIM’s financial situation has deteriorated and its market capitalization has plummeted by almost 95 percent since its mid-2008 peak of more than $100 billion. The company has brought in new leaders, but most pundits assume that the game is already over, and that it’s just a matter of time before we write RIM’s obituary.
Yet in September RIM reported that its subscriber base had grown to 80 million from 78 million. The company’s market share is still decreasing, but companies on death’s door don’t tend to report sales growth.
What’s going on? The reality is that the Blackberry still has some clear advantages over other mobile devices. Its Blackberry Messenger provides an easy and free way for subscribers to send messages to each other. And its email offering is still strong.
How could that matter, you might think, when there are apps galore that can provide similar functionality on the iPhone or Android-powered smartphones, and those phones offer sharply better ways to view content and access the mobile Web?
RIM’s proprietary network and tightly interconnected system allow it to use data incredibly efficiently. Here’s one illustration. The other week I was on an 18-hour flight between Newark and Singapore. Singapore Airlines has started rolling out Internet connectivity on this flight. It isn’t cheap, running $1 per megabyte of data. I didn’t dare turn on my iPhone, or open up Outlook, but I thought going to Web mail would be safe. 15 minutes later I had a $15.30 bill. Then I remembered the Blackberry in my bag. I connected it to the WiFi network, and had roughly 14 hours of email connectivity. By the end of the trip my bill had gone from $15.30 to $15.45.
One challenge we have when we make decisions is what psychologists call the availability heuristic.
Read the rest at Scott’s Harvard Business Review
Scott D. Anthony is managing director of Innosight Asia-Pacific.