BlackBerry Is Still Stalwart Smartphone for Government Workers, RIM Insists

RIM says the U.S. government is still a lover of super-secure BlackBerry smartphones. While consumer usage is falling fast, RIM says its government market share is "probably" growing.

BlackBerry smartphones are still the U.S. government€™s phone of choice. In fact, Research In Motion€™s share of that market, with its high demands for security and always-on push email, €œis probably increasing,€ Bloomberg reported April 9, citing an interview with Scott Totzke, the company€™s senior vice president of BlackBerry security.

€œCompared to the enterprise over the last year and a half or so, the federal business on the whole is up,€ Totzke told Bloomberg. €œThe employee base is shrinking, so if we€™re looking at a market with fewer employees and our install base is stable to slightly up, that would seem to indicate that we have an increasing market share.€

While he wouldn€™t confirm that President Obama, who was insistent when he took office on using a BlackBerry, is still a customer, Totzke called the White House a €œstrategic€ customer.

On March 5, Reuters reported that the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATFE) was the second government agency in as many months to say it was moving from the BlackBerry Enterprise Server (BES) to a less-expensive solution.

Later that month RIM announced fiscal 2012 fourth quarter results that included a 21 percent fall in smartphone sales between its third and fourth quarters and a 19 percent fall in revenue during the same period. New CEO Thorsten Heins detailed his plans for RIM€™s recovery and the strategy it has in place, adding that it€™s €œnot without risks and challenges€ and there€™s no guarantee of success.

On April 3 RIM launched Mobile Fusion, a critical component of its turn-the-ship-around strategy. RIM has had a hard time defending its market share from the Apple iPhone and high-end Android smartphones€”particularly with bring-your-own-device (BYOD) programs making it acceptable for employees to bring iPhones and Droids into workplaces, many of which were once solidly BlackBerry turf. Mobile Fusion, however, gives IT managers the ability to manage not only BlackBerry handsets but devices running Android and iOS. If RIM can€™t fight them, it€™s realized, it can still make some money supporting them.

The same day, The Washington Post put the number of federal users still loyal to RIM at half a million and not falling, despite €œthe world €¦ moving at warp speed away from the BlackBerry.€ The rest of the article described a number of BlackBerry users feeling victim to their security-minded jobs€”cool consumers pining for iPhones but tied to lame BlackBerry phones.

The Post cited one U.S. Department of Homeland Security worker as sighing and saying, €œI want a bigger screen. I only really use it for work, but it would be nice to surf the Web more easily.€

Totzke is also quoted in the article, calling the federal government €œa very important market€ for RIM and its €œcore strength.€

Perhaps Totzke can sell Homeland Security and others on the Torch 9810, a slider phone with a 3.2-inch touch-screen, or the Torch 9850, which dispenses with the dedicated keyboard altogether for a 3.7-inch touch display. The Curve 9380 is also more touch-screen-centric, for a slightly more iPhone-like experience.

Until a second critical component of RIM€™s strategy debuts€”the BlackBerry 10 platform, which RIM will introduce at BlackBerry World in May but not release until later in the year€”Hein plans to try and move serious numbers of BlackBerry 7 smartphones. He plans to do this by €œaggressively incentivizing [users] through the implementation of programs to both drive upgrades from older BlackBerry products to BlackBerry 7 and to bring on-board feature phone customers to BlackBerry 7 for their first smartphone experience.€

According to Totzke, 40 percent of RIM€™s government customers have upgraded to new devices, including BlackBerry 7 handsets, over the last 12 months.

€œThat€™s a pretty good refresh rate,€ he told Bloomberg.