The Issue with BlackBerry

The real problem with BlackBerry is the cost.

Ever since Verizon’s CEO Lowell McAdam didn’t say that the mobile market is crying out for a third ecosystem, and that BlackBerry wouldn’t be it, the writing has been clear on the wall for everyone to see. For all that the line was actually uttered by someone else, and was widely misreported, these things gain an internal momentum of their own. It hardly matters. The industry has known it for some time anyway. In a few short years, Android and Apple have utterly captured the smartphone market, and RIM’s previously dominant position has become a dim memory.

If it wasn’t clear from the sales figures, it can be observed – or heard – in the increasing volume with which BlackBerry’s loyal users defend their preference. Amateur users post extravagant corporate recovery plans almost hourly. RIM just needs to simplify its suite of products, it needs to abandon touchscreens, it needs to ape IBM’s business model. Of course, there are a number of reasons why iPhones and Androids are preferred as devices – they’re easier to use and let you do more stuff – just as there are a few areas in which BlackBerry remains superior, such as security and management. But one thing few people seem to mention is cost.

Dog and Bone has a great deal of experience in this area, and our results across a range of clients have shown that rolling out a BlackBerry solution is on average two to three times more expensive than an equivalent iPhone solution, if starting from a neutral position. By neutral position, I mean those companies that don’t have an existing BlackBerry Enterprise Server (BES) in place. These figures hold true for businesses that spend $50,000 per year as for those that spend half a million. Given the choice – and as an independent consultant we take great pains to outline the manifold benefits and shortcomings of every solution – our clients very rarely choose to go with BlackBerry, and when they do its it usually reflects an existing culture within the organisation.

The reasons for this are not difficult to fathom, and mostly come down to the cost of licences (CAL), the ongoing cost of BlackBerry plans (which have hardly lessened, while mobile data costs for rival platforms have plummeted), the cost of acquiring BES, and in many cases the costs of the devices themselves.

BlackBerries do less and cost more. This has been the case for some time, but the inherent advantages of RIM’s products – security and stability, foremost – are beginning to erode. In most cases these advantages are no longer sufficient to offset the far higher costs involved.

From that point of view, it’s hard to see how RIM could possibly turn its fortunes around by either playing to its own strengths or by competing directly with iOS and Android. Luckily, it’s not my job to work it out.