Analyst Perspective: What RIM Needs to Do Next

By  Jeff Goldman — September 17, 2010

This is the latest in a series of interviews with industry analysts, discussing their perspectives on key issues related to BlackBerry devices.

Rob Enderle is president and principal analyst of the Enderle Group, where he provides companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar markets. For over 20 years, Enderle has worked for and with companies like Microsoft, HP, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

Enderle says it's now crucial for RIM to reassess its approach to security in response to the threat of a BlackBerry ban in several countries, including India and the United Arab Emirates.
"They need to step up and recognize the threat that's being posed by the countries that want them to open their encryption," Enderle says. "It really has to do with their NOC approach to handling security... Most of the other phone companies either use third party encryption solutions or use the operating system's encryption solution, but in all cases they don't use this centralized gateway."

And so the most logical answer, Enderle says, would be for RIM to spin off a separate security arm. "As long as it's part of RIM, it's an easy target," he says. "At the very least, they need to allow more aggressive third party solutions to come in, so that if somebody does get access to the NOC and gets access to the encryption key, you can have a second solution as a company that you can rotate over to and once again protect your information."

RIM's other significant challenge at the moment, Enderle says, lies in finding a more effective way to reach the consumer market. "At the end of the day, if consumers don't want to use the offering, they're screwed," he says. "That means that their products have to appear to be fun, they have to appear to be interesting -- and they can't let companies like Apple and Google take all the developers for all the apps that you might otherwise want to run."

For RIM itself, Enderle says, that's going to require a shift in marketing strategy. "You have to advertise on benefits," he says. "What makes this phone better? What makes this one stand out? The Droid campaign against Apple is the kind of campaign that you run, because if you're not the leading vendor in the space you're going after, you need to showcase your benefits against their faults."

And that may be as straightforward, Enderle says, as just simplifying the message. "There is a value to having a keyboard on a phone -- you might spend an entire campaign on just pointing out that for certain things, you just can't get over the fact that a keyboard's better," he says.

The same is true of other strengths, such as the BlackBerry's battery life. "Those are benefits that somebody should value, but only if they're compared to the shortfalls of the other guys," Enderle adds. "So you do comparatives, and you focus on the things people want to get done."

Still, Enderle admits, RIM faces a relatively delicate balancing act in doing so.
"They need to keep Apple in their sights, but they need to keep Apple out of their rhetoric... Rather than trying to build a RIM iPhone, their goal should be to try to force Apple to build an Apple BlackBerry," he says. "What makes them unique and different is that they are arguably the best keyboard-based phone, and they are probably the best phone for dealing with social media, because it's very text-based... so for those that want to live on Facebook and want to live on Twitter, be the Twitter phone, and be the Facebook phone."

Ultimately, Enderle says, what RIM needs to do next is relatively simple: "Just reinforce that the BlackBerry is a unique product that has unique qualities, and that those unique qualities still appeal to a large section of the market -- and maybe the majority of it."

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