Microsoft + RIM = Waaah? Announcements happening NOW (1 Viewer)

[mattCR]

Blackberry App World 2011 has had some interesting announcements, but two stunners this morning:


* Microsoft Bing! will be integrated directly as part of OS7

* Microsoft's Silverlight Development tools for Playbook will allow (some) WP7 Silverlight proggies to hop the fence

* Microsoft and RIM form an alliance on the "next generation" Exchange Messaging tools.. speculation that BBM will have direct integration into mobile exchange/exchange clients..

 

[Ted Todorov]

I wonder how Nokia feels about this?

Meanwhile RIM announced BES support iOS and Android. Hedging their bets for the day when BlackBerry marketshare craters to almost nothing?

 

[Sam Posten]

Birds of a feather flock together, even dodos.

 

[mattCR]

Originally Posted by Ted Todorov

I wonder how Nokia feels about this?

Meanwhile RIM announced BES support iOS and Android. Hedging their bets for the day when BlackBerry marketshare craters to almost nothing?

I think it sometimes baffles me that there is an assumption "craters to zero".. 1Q of 2011, Blackberry shipped 40% more phones then they shipped in Q1 2010.


I think this is what people miss out. Apple and Google are going to create a huge market all their own. The people dying are really the phones that were never "smart" (have you seen anyone rush out and by, say, a dumb phone, ala a Kyocera or a Motorola Razr type phone lately?)

As the market expands, it expands. RIM can't grab the marketshare it once had - and never will again. Because as a small company, even if it wanted to, it doesn't have the money, resources or manufacturing to do it.. even if it had the hottest device ever created, it'd be screwed because it couldn't produce them.to meet demand.


I think RIM moves to a bit player. As much as I like their product (sorry, there are some of us who do) they don't have the capability to do otherwise, and they never will.


It's the same problem Apple is about to face.. Google is a much bigger fish; because it can invest insane money into product while having tons of companies develop and pitch product; so Google will, quarter after quarter, quickly outpace everyone as to how many they ship.


Microsoft has to look at Google and come up with a way to get a ton of product developers; but I don't know if the ship has sailed. Microsoft's only advantage is that they will have a unified OS instead of tons of fragmentation on all platforms.. so an app roles out, it works everywhere.


RIM, however, is a development company. There will be a market for their phones and devices - and they will probably continue to ship in record numbers while losing marketshare in a booming market (realize: ~2.5 times as many smartphones shipped in 2010 as 2009, so to keep marketshare, you really had to ship 3times as many phones, not 40% more phones and so on) .. BES is their most valuable baby. BES is licensing fees. BES is corporate lockdowns, remote functionality, security and a unified message structure. RIM introducing BES for WP7, IOS, and Android is the obvious reality. While RIM can not manufacture enough phones to maintain current market penetration, even on it's best day, it can however, allow it's corporate partners to buy BES CALs for Android, WP7, IOS and broaden out that user base. It's a smart move; and I don't think they had a choice they had to do it.


RE: Sam and the 2 Dodos..


It sounds cute, but it's really not the case. There is this terrible assumption on the internet that if you aren't #1 you're basically dead. Which is wildly incorrect. Just because say, Ford, doesn't ship as many cars as GM doesn't mean that Ford is going to fold up it's tent and disappear tomorrow. Just because AppleTV failed to meet it's sales goals doesn't mean Apple quits selling it. Because Peachtree doesn't outsell Quickbooks doesn't mean they will stop making Peachtree. As long as they make a product that makes a profit (and a fairly large one) they aren't going away. Hell, AMD has never in it's life had a day where it had more gross then Intel.. and yet, I don't see AMD folding up it's tent and just quitting on the marketplace.. and now it is making huge strides in the graphics world since it's purchase of ATI.


We love a "WINNER" because we think of anything less as failure. However, there is only one real marketplace "winner" as far as marketshare, and if I were a betting man I'd tell you it isn't Apple or Microsoft, end of the year it's Google in the mobile phone market. But it doesn't mean that Apple or Microsoft will just throw in the towel or become dodos.

Just my opinion, but it's kind of like Engadget story responses that tend to vary from "the sky is falling" to "this is dead".. I've never understood the rallying cry about any product. If tomorrow MS, Apple, or Google could give me a phone with a keyboard as good as the blackberry, I'd think about switching. If any of them could figure out multiple exchange server support, that would be critical too. I'll give almost anything the time of day for a test drive, because I have too many clients who use a bit of everything. And there are some things I love and hate about most devices.

There are some dodos in the industry, but they are because they were never profitable. Kin was never profitable (Microsoft) so, dead. MeeGo has never been profitable, so in the end, it will die. HP may love WebOS, but unless something rapidly changes, it's dead because ti's not making money. WP7 may not be what I'm after, but counting Nokia's licensing payout + vendors it's a profit, so it's going to stay around for a while; Apple rolls in the profit from iOS. RIM has struggled, but at about $5B in the quarter - while less then needed (the target was $5.6 what the street wanted, $5.2 for what the company projected word is it will be about $5.1B) they won't be going begging for the poorhouse.


That's the reality of the game. I don't think RIM will ever be the "market leader" in smartphones again; they do not have the $$ in the kitty to do that. But today's show at Blackberry world was a good sign for what a lot of us thought they should have done - come out with vertical market apps they can claim as exclusives. CSC, IBM DB2 interface, PDM, etc. Those should have always been there target.


I think the larger the marketplace grows for smartphones, the more you're going to find ones that fit almost everyone's goal. I admit, I love my blackberry, I'm not giving it up. Email for me is the killer app, and it does it better then anything else I've ever found. My wife loves her iPhone4. Come May, my office will change over all of our people to the Bold 9930s. We all passed on the Torch (because frankly it was trash) and it will be the first tradeout we've had since the Bold9000. (Frankly, the Torch was garbage, and the follow up bold's keyboard was too small) So, RIM will at least get 15 new activations from me. But does that really benefit them? Eh, not so much.. because we already all use BB. Am I personally buying any Playbooks? No. I have one client who uses them now, and so I have one for them, but I'm not interested in any tablet right now. At this moment, I already have the Playbook, the Ipad2, the Xoom.. just because Clients have them so I need to play with them so I can understand. As far as that goes, the iPad2 is a work of absolute art, it's easily the best tablet I've played with, it's effective. But it's not very business sensical. The Playbook has all the right ideas, and with the new OS rollout today, finally some things are pretty slick. But I'll be honest there: it appears based on Blackberry world that SAP, CSC, and others were already developing their apps. So I'm wondering WTF RIM was doing introducing this a few weeks ago. If they had rolled out on Day one and said "We have a native Salesforce, a Native PDM, a Native CSC, a Native DB2, a Native etc. app that are exclusives" they would have crushed it for the business community. Frankly, those people weren't in some super rush to go buy... so I think they felt pressure to get it out, and it's apparently going to be May/June now that those apps are becoming available that there is actually a "wow" factor.. just not a consumer wow factor. As far as that goes, the only platform I really dislike is Android at the moment; it is easily, without a doubt the most difficult to work into a corporate network. There are no real effective tools, and the way it functions pisses me off. But, I recognize that it's adoption rate is probably going to be higher because it will have more vendors.

I think the market is wide and deep enough for everyone. I think RIMs big challenge is going to be in managing expectations.

 

[Ted Todorov]

Originally Posted by mattCR
I think it sometimes baffles me that there is an assumption "craters to zero".. 1Q of 2011, Blackberry shipped 40% more phones then they shipped in Q1 2010.
...


It's the same problem Apple is about to face.. Google is a much bigger fish; because it can invest insane money into product while having tons of companies develop and pitch product; so Google will, quarter after quarter, quickly outpace everyone as to how many they ship.

Long post -- I'll try to address some of it. No one (certainly not me) is saying that Blackberry share will crater to zero. It will crater though, specifically in the US. RIM has been growing based on new markets -- in developing and third world countries. Unfortunately that means they can sell the phones for far less than they have in the developed world -- thus the latest earnings warning from RIM a mere month after their previous earnings call. During the call from a few days ago they warned about their Latin American share as well -- where they had been previously growing -- so even in the developing world they are in bad shape.


In the US I expect not just market share to drop in a growing market but absolute numbers to drop as well. Blackberry simply doesn't have a competitive product, nor is the BB & release coming in 2011 competitive -- it is still not QNX based (but at the same time isn't backwards compatible) RIM has totally dropped the ball. They had a chance with the Playbook, but shipping it in unfinished, beta at best form as they did has tainted it -- IMO for good.


So far as Google being a bigger fish than Apple -- I don't think you've looked at the numbers lately. If Apple really wanted to they could buy Google right now -- certainly by next year. Yes it would be a cash plus stock plus leverage (loan) sort of deal but they could do it. But short of that Apple can readily compete. With their $65 Billion in cash (and climbing rapidly) they can readily corner the market for components plus factory capacity. They are already doing it with enormous component pre-pays -- the latest one reported to be a staggering $12 Billion. The Android ecosystem can't compete with that in any shape or form. Google has plenty of money, but they are not about start handing it out to hardware makers on top of the free OS. Google's financials weren't all that rosy their last quarter. The hardware makers on the other hand don't have the money to compete with Apple. Motorola is one more Xoom away from bankruptcy. LG is losing money. Acer just fired their CEO. HTC is doing well but it is tiny compared to Apple. Really Samsung is the only serious competitor -- but even they are making more money selling components to Apple than they are selling Android phones. And Samsung are hedging with other OSes.


Apple is capable of building more phones than all of them combined if they need to. They don't want to -- they are happy to leave the no-profit bottom end of the market to their competitors. The real struggle is at the high end -- where iPhone's AT&T exclusivity (and less than 100% carrier penetration in many other rich countries) has made a huge difference in favor of Android. How that will play out remains to be seen in the future.

Android's other problem is that it is very dependent on the direction/whims of Google, but Google isn't dependent on Android. Google makes no money from Android directly, they make money from search. At this point it is a good bet Google makes more money per iPhone than they do per Android -- iPhones all default to Google search, a substantial portion -- possibly in the 50% range* of Android phones do not. Development costs for Google on the iPhone (maps, a few other apps) are minimal compared to Android. At what point will Google decide to declare victory and leave Android to its fate? Maybe never. Maybe after a couple of quarters of earnings trouble when they will be forced to start killing expensive sidelines that don't make money.


* Aside from many of the Verizon Droids running Bing, all sold in China "Androids" (from ZTE, Huawei etc.) (which Andy Rubin counts as activations) use Baidu and cary no Google apps at all.

I also take issue with WP7 being profitable. It isn't. Microsoft is paying billions to Nokia -- not the other way around. There will be licensing fees flowing the other way, but it will be a LONG time before they exceed what Microsoft is paying right now. Anything at Microsoft that's not Office or Windows or Server side software/services is a money loser. Maybe Kinnect pushed their Xbox division into the black, but even that isn't sure thing -- they may still be paying off the Xbox development costs (many billions) plus the huge warranty costs associated with their early, massively defective Xboxes.

 

[mattCR]

Originally Posted by Ted Todorov


So far as Google being a bigger fish than Apple -- I don't think you've looked at the numbers lately. If Apple really wanted to they could buy Google right now -- certainly by next year. Yes it would be a cash plus stock plus leverage (loan) sort of deal but they could do it. But short of that Apple can readily compete. With their $65 Billion in cash (and climbing rapidly) they can readily corner the market for components plus factory capacity. They are already doing it with enormous component pre-pays -- the latest one reported to be a staggering $12 Billion. The Android ecosystem can't compete with that in any shape or form. Google has plenty of money, but they are not about start handing it out to hardware makers on top of the free OS. Google's financials weren't all that rosy their last quarter. The hardware makers on the other hand don't have the money to compete with Apple. Motorola is one more Xoom away from bankruptcy. LG is losing money. Acer just fired their CEO. HTC is doing well but it is tiny compared to Apple. Really Samsung is the only serious competitor -- but even they are making more money selling components to Apple than they are selling Android phones. And Samsung are hedging with other OSes.


Apple is capable of building more phones than all of them combined if they need to. They don't want to -- they are happy to leave the no-profit bottom end of the market to their competitors. The real struggle is at the high end -- where iPhone's AT&T exclusivity (and less than 100% carrier penetration in many other rich countries) has made a huge difference in favor of Android. How that will play out remains to be seen in the future.

Android's other problem is that it is very dependent on the direction/whims of Google, but Google isn't dependent on Android. Google makes no money from Android directly, they make money from search. At this point it is a good bet Google makes more money per iPhone than they do per Android -- iPhones all default to Google search, a substantial portion -- possibly in the 50% range* of Android phones do not. Development costs for Google on the iPhone (maps, a few other apps) are minimal compared to Android. At what point will Google decide to declare victory and leave Android to its fate? Maybe never. Maybe after a couple of quarters of earnings trouble when they will be forced to start killing expensive sidelines that don't make money.


* Aside from many of the Verizon Droids running Bing, all sold in China "Androids" (from ZTE, Huawei etc.) (which Andy Rubin counts as activations) use Baidu and cary no Google apps at all.

I also take issue with WP7 being profitable. It isn't. Microsoft is paying billions to Nokia -- not the other way around. There will be licensing fees flowing the other way, but it will be a LONG time before they exceed what Microsoft is paying right now. Anything at Microsoft that's not Office or Windows or Server side software/services is a money loser. Maybe Kinnect pushed their Xbox division into the black, but even that isn't sure thing -- they may still be paying off the Xbox development costs (many billions) plus the huge warranty costs associated with their early, massively defective Xboxes.

A few notes:


"Certainly by next year".. realize, that would be a prospective cash on paper, and it's also a guess based on assumed performance. But it also misses the point. Google is a bigger competitive fish here then other players.. that's what I'm saying, and yes, bigger then Apple not because Google IS bigger then Apple, but because Google has numerous sell through partners who can provide significantly more model numbers and floor space. That's all. You now have: Dell, Acer, Motorola, HTC, Samsung, Sony, etc. all committed to Android based phones. You simply have more floor space. That's all. That projection isn't even one that I see disagreed with, because IDC and others tend to see this:


http://www.dkszone.net/idc-projections-android-windows-phone-top-charts-2015


By the end of this year, Google will account for almost 40% of the phones in service line. Apple will account for 15%. Symbian will still exist end of the year, probably into next, but it -is- dead, and so will be 0 by 2015. The growth factor for MS is ridiculous toward 2015... but they likely have some growth thanks to Nokia, we'll have to see. But because of Apple's introduction rate etc. I find it hard to project them ever topping 20% of the marketplace.

I think RIMM will stay stagnant. I think they slowly transition to a software services company. BES, which is by far their best product and is their lifeblood, grows with the addition of iOS/Android supports.. which we'll see how that works out.


I would add to this: I did not say anywhere that WP7 IS profitable, I said it WILL be profitable. That's a projection. But I really don't think MS's bet is nearly as stupid as people think it is. The reality is, the marketplace is huge and growing. Microsoft should be able to get fair volume from partners and ship fair volume; Nokia is a big part of that. Now, that's projection, but it's based on the concept that MS hits about 10% market penetration - if IDC and others are correct, cost per earnings even at about 7% of a growing pie. We'll have to see on that front.

I also take issue with WP7 being profitable. It isn't. Microsoft is paying billions to Nokia -- not the other way around. There will be licensing fees flowing the other way, but it will be a LONG time before they exceed what Microsoft is paying right now. Anything at Microsoft that's not Office or Windows or Server side software/services is a money loser. Maybe Kinnect pushed their Xbox division into the black, but even that isn't sure thing -- they may still be paying off the Xbox development costs (many billions) plus the huge warranty costs associated with their early, massively defective Xboxes.

Just so we can note something, though, for clarity.. XBOX has largely been "in the black" for some time. MS makes most of the money from XBOX off of live subscriptions (that nice $10 a month or whatever to play on line) plus royalties plus marketplace etc. Yeah, they aren't hurting on XBOX. The early generations of XBOX (think RROD..) that's nearly 5 years ago since 1st generation issues.. and since the revised chip shipments in '09, those that have shipped since then have been pretty well free of those issues. Yes, that's a bad problem to have. Then again, Sony got bit by the same bug.. and right now, it's MS who's enjoying Sony absolutely melting and falling apart with security problems.


That's the real story, is that year to year, we have no real idea of what to expect for value or success.

But on one point, I tend to agree.. I think Microsoft blew it on one level with Nokia.. while it was rumored for a long time, there much stronger move would have just been to buy RIMM. Because if MS could have integrated BES into it's server ecosphere, that would have been a huge win for them.


I do know that it's pretty interesting to be a consumer on a lot of different levels. And I think fierce competition is pretty good.

 

[Ted Todorov]

Quote:

Originally Posted by mattCR
Google is a bigger competitive fish here then other players.. that's what I'm saying, and yes, bigger then Apple not because Google IS bigger then Apple, but because Google has numerous sell through partners who can provide significantly more model numbers and floor space. That's all. You now have: Dell, Acer, Motorola, HTC, Samsung, Sony, etc. all committed to Android based phones

You are completely ignoring my point on components -- its not like all these companies will suddenly pool their cash and outbid Apple -- Apple will always get the first dibs where there is a shortage and best price. Apple could corner the market on a particular vital component. Samsung has been quoted as giving Apple preference for parts over Samsung (Samsung phones running on non-Samsung CPUs because Apple had too much of their fab capacity.) It doesn't matter how many of them are *if Apple chooses* it can outproduce all of them. And Apple single handedly controls more brick and mortar stores than all of those put together.


Again, the one thing saving them is that there is a part of the market Apple is not interested in competing.

You also have no answer on why Google should choose to keep making Android a priority. For Apple iOS is its life blood -- for Google, ANdroid is a loss leader.

The 15% iOS -- 40% Android is pure science fiction. It isn't going to happen. You can make fun of me next year if it does, but wait until then...

 

[mattCR]

Originally Posted by Ted Todorov

Quote:


You are completely ignoring my point on components -- its not like all these companies will suddenly pool their cash and outbid Apple -- Apple will always get the first dibs where there is a shortage and best price. Apple could corner the market on a particular vital component. Samsung has been quoted as giving Apple preference for parts over Samsung (Samsung phones running on non-Samsung CPUs because Apple had too much of their fab capacity.) It doesn't matter how many of them are *if Apple chooses* it can outproduce all of them. And Apple single handedly controls more brick and mortar stores than all of those put together.


Again, the one thing saving them is that there is a part of the market Apple is not interested in competing.

You also have no answer on why Google should choose to keep making Android a priority. For Apple iOS is its life blood -- for Google, ANdroid is a loss leader.

The 15% iOS -- 40% Android is pure science fiction. It isn't going to happen. You can make fun of me next year if it does, but wait until then...

Yes, and I agree, for the most part, Apple is a priority for Apple. And people like Samsung, Motorola, etc. they don't have the manufacturing capabilities to keep pace with Apple. They don't. Won't and can't. Selling to Apple matters more. (then again, Samsung is now in the middle of a multi-billion back and forth suit with Apple, so the favored status may be changed). But Dell, and especially Acer - who owns it's own manfucturing from bottom to top - are a beast of a different color. In the end, the pieces don't have to mean that any of them challenge Apple. Because they won't. Apple has what they don't, that being the 'mindshare'.


Nothing I'm saying here is to bash Apple.. hell, my wife is almost all apple user now; I have clients all Apple. Right now, today, per NPD, Android based phones made up slightly more then 50% of the sale through last month. Apple made up 24.6%. The top 2 phones sold were Apple. But out of the top ten, 7 were Android. That's the bit.


http://www.digitimes.com/NewsShow/NewsSearch.asp?DocID=PD000000000000000000000000019556&query=APPLE


So, then Apple's China partners start leaking money because the shift in the economy and changing practices, and now Apple will have on tap 5 Million CDMA phones (Verizon) instead of 10 Million.


I think you're right with the concept that Apple isn't interested in the low end. They are developing the cadillac device, and they always have been. When they roll out a new device they get huge adoption, especially repeat adoption - getting prior buyers to reup their contracts with new purchases. I think they have that over everyone.


Since it's move to Verizon, Apple is about 28% of the sale through. Android phones, which spent all last year at about 53% of the market are down to 50%. Apple had a big head start, so did RIM. But if Google stays at about 50% of the total sales through month per month, then a 40% marketshare by the end of the year is a broadly believed expectation.


http://www.prweb.com/releases/mobile-phone-sales/apple-iphone/prweb8353210.htm


Your argument about Google and "why should they do it" is a good one. Honest answer: it makes no sense to me. I personally think Android pretty well sucks, it's platform is a disorganized mess, it's tablets are a logistic and support nightmare, and they offer no real roadmap for what happens next.


But how do you ever make sense of Google? Google has pissed away more money on stupider things that I can't even make sense of. And yet, they tend to piss away HUGE chunks of money chasing ideas. Right in my own backyard, they are equipping half of a county with a trial of gigabit internet service. WTF is google doing in the internet service business? The buildout is expected to be a monumental money loser. And their commitment to a sub $35 price range means that if every man, woman and child in that county subscribes, they'd still lose money.. for quite some time... as in, years.


I gave up a long time ago trying to figure out google. Thier stock is a yo-yo, the market buys into them when they have a mix of products without any that are exceptional. Google is the scattershot of the world. They fire bullets out everywhere and occassionally they hit, lots of times they fail, but damn they flail away at it.


So, I'm not arguing google will be at that percentage point by the end of the year based on a great product, just based on market realities. Month by Month, Google makes up 50% of the total smart phones sold. In part because they appear on a lot of carriers with no iPhone (see: T-Mobile, Sprint, prepaid offerings, regional carriers).


So maybe it seems like "science fiction" but by the end of the year, Google will be about 40%. Apple will be about 15-20%. It would be almost impossible for Apple to get anywhere over 30%. To do that, they'd have to near about 70% clearance on the carriers they handle to make up ground for the ones they don't appear on at all, as well as the traction that Google has on Verizon, etc.


*shrug*


I think this is where we get too wrapped up into "who's winning". At 18%, Apple would make more profit, by a large margin, then google would licensing 50% of the market.

But we get tied up in seeing the numbers as some sort of "winning". *shrug*

 

[Sam Posten]

Very insightful posts all around. Regarding cratering to zero I don't have an opinion either way but I will phrase it in the form of a question: What makes RIM different than Palm?

 

[mattCR]

Originally Posted by Sam Posten

Very insightful posts all around. Regarding cratering to zero I don't have an opinion either way but I will phrase it in the form of a question: What makes RIM different than Palm?

BES.


Palm's biggest downfall was that, outside of being behind it had no standout single function that made it useful. RIMM has BES. You lose a blackberry? I can remote brick it and wipe all the data. You lost a Palm, you were screwed. Palm was a device only, with no structure at all to make it where a central location could handle administration. Blackberry has had central administration at it's core for several generations now.

 

[Sam Posten]

You've been able to do that with an iPhone for the last two years. Has helped their adoption but I don't see it touted as that big an enterprise driver....

 

[mattCR]

Originally Posted by Sam Posten

You've been able to do that with an iPhone for the last two years. Has helped their adoption but I don't see it touted as that big an enterprise driver....

You asked the difference with Palm. iPhone wasn't part of your question. Palm never had those functions. Thus, that answered your question. Palm had no major feature that couldn't be replicated. It's keyboard wasn't as good as Blackberry, it couldn't be remote wiped, and it didn't have a server level security method.


Once Apple adopted Activesync, remote wipe became an option.. kind of. The problem is Apple's remote wipe is easy to get away from.. it doesn't work at all on Jailbroken phones, and as people keep showing, there are ways to prevent it from actually following through on the remote wipe..


Because the iPhone natively uses an OWA client, local storage and provides no data encryption standard, it doesn't fall within the security requirements for organizations that require it. FYI, when BES comes out for iPhone, that's one of the big things that would change. (before anyone says: "Well, you can IMAP....." IMAP is not a viable method for corporate mail servers; no company is going to start throwing open IMAP ports on an exchange server..)

 

[Sam Posten]

Oh ok, gotcha.