Fruit Loot: Why Blackberry Is Still Going Strong
Research In Motions BlackBerry wireless e-mail device isnt just a faddish executive status symbol its an indispensable, money-saving e-business tool, says Jim Balsillie, RIMs co-CEO. That would help explain why the Waterloo, Ontario, company hasnt suffered the same kind of sales drought ravaging many other technology firms, including handheld makers Palm and Handspring. Now RIM has its antennae trained on Europe: This summer, the U.K.s BT Cellnet will launch a BlackBerry service for its General Packet Radio Service wireless network. Balsillie spoke with Matrix Editor Todd Spangler.
How has RIM sidestepped the tech industry slowdown?
While were in a sort of general, macroeconomic slowdown, I think a lot of the technology world is, in fact, in different worlds. Palm and Handspring are subject to very different risk factors than we are. Really, we are fundamentally about always-on, wireless data communications. And thats very much an emerging sector. With BlackBerry, theres a clear ROI [return on investment] to the enterprise, which is our focus, and to the consumer. In tough economic times, if you can show someone how you spend a dollar and save five or six dollars, thats very different from selling a sort of discretionary product, like an organizer.
How exactly does BlackBerry provide an ROI?
It comes from three different areas. The TCO [total cost of ownership] of a laptop is around 10 grand a year. So immediately you eliminate that for BlackBerry users. Cell phone bills go down. You dont need to carry a pager or an organizer these are hard, hard dollar savings. Second, all our studies show BlackBerry users get one to two additional hours a day in productivity. Whats an hour a day worth of productive time? People value their time. The third thing that came along and I think its bigger is this element of being connected all the time. The fact that youre always contactable thats the softest one, but thats the biggest one.
What do you think RIM offers that none of your competitors do?
I dont think anyone else really addressed the always-on, always- connected, wearable device its the immediacy proposition. The second thing is, we nailed security. The BlackBerry has triple-DES [Data Encryption Standard] encryption. It gives you an absolutely secure, unbreakable link to the desktop. Security is the No. 1 issue for every CIO [chief information officer] out there. The third thing we did is that we took an approach to partnering that was different. We dont want to be a service provider. We dont try to contend with the existing providers of data. We just want to be a viewer to those applications. That facilitated a very close working relationship with Microsoft, and a close relationship with IBM and Lotus [Development] and many other companies.
America Online saw very disappointing sales of its version of BlackBerry.
AOL had something of a learning curve. They priced it a little high, and they took too much work on their own back. They werent quite ready. But having said that, those who have it love it.
But does that mean theres not much of a consumer market for you?
Whats important to understand is that there are 150 networks around the world getting 2.5G [2.5-generation] wireless in place this year. We look at that and say, "What does it do?" It brings data to the consumer voice world, and very cost-effectively. Suddenly, when you get data as an auxiliary to voice, its very, very powerful.