Palm and RIM Bringing BlackBerry Connect to the Treo 650

If so, it's a loooong, slooooow end. We first heard an announcement like this one back in Dec 2003:

http://mobilebusinessadvisor.com/doc/13500

And why should this be the end of the line for Palm OS? Do you think Microsoft would ever let a Windows Mobile smartphone connect to BlackBerry Connect?

David Beers
Pikesoft Mobile Computing
www.pikesoft.com
Software Everywhere blog
www.pikesoft.com/blog

Um, actually there is already a BB Connect client for Windows. It's packaged by HTC with their PPC phones. Just FYI.

I see there being two possible explanations. One, RIM forsees the fact that eventually, they'll be largely pushed out of the hardware market by other devices which do both push email and other things. Say what you will about the Blackberries' efficiency, they're not much of a platform. Thus, RIM wants to expand their software market to become the de facto choice for enterprise servers. As I recall, they worked with HTC on the BB Connect client for WM, too.

Option two, RIM thinks that it won't significantly impact their hardware sales, but will broaden their software base, becoming the only "real" option for push email on the extremely popular Treo.

It would be greatly enlightening to see a breakdown of RIM's revenue, and how much of it comes from hardware versus software and support.

http://www.theregister.co.uk/2005/04/06/rim_results_q4_fy05/

For the three months to 26 February 2005, RIM recorded revenues of $404.8m, up 11 per cent on the previous quarter and 92 per cent on Q4 FY2004. Some 66 per cent of the quarter's revenue arose from sales of Blackberry hardware, down from 71 per cent in Q3. Of the rest, 17 per cent came from service deals - the same as the previous quarter - but software-derived revenue jumped from seven per cent of the total last quarter to 14 per cent in Q4.

http://blackberryblog.com/platform/

Well written and very informative article on the transition RIM appears to be trying to make from a hardware company with software to a software / services company that also sells some hardware. One tidbit that stuck out to me was the note that carriers pay RIM between $5 & $10 per subscriber. Is that per month or year? If BlackBerry has 2 million subscribers and gets $10 per month for each subscriber, that's $$240 million dollars per year they get in revenue through subscriptions. Wow. But get this:

Sales of all of RIM's handsets, affectionately known as "crackberries" for their addictiveness, are expected almost to triple in this fiscal year. This would drive hardware revenue to 76% of the total in the 2006 fiscal year, up from 58% last year.

Sales are expected to triple. That's a good year.

Surur

The big cheese in our IT department thinks this is not news at all - it's no more than a rehash of what RIM have been saying for years. He says that Windows Docile devices will soon supplant Blackberry devices for 'push' email.

If this attitude is typical of corporate IT departments around the country, what chance has Palm got?

I don't see this as contributing (or not) to the demise of Palm. It just means more potential revenue for RIM as their network is accessible by more devices.

However, I'm not sure if I really understand how this is going to be distributed. Will a user be able to purchase or download this software and install it on their device? Or is it dependent on the carrier providing it? If we have to wait for Cingular or Verizon to deliver this, RIM will probably be sold six times over before anyone can really benefit from this.

BTW Dr. Opinion - RIM would be foolish to get out of the hardware business when they currently receive over 60 % of their revenue from it - REGARDLESS of profit. Any 1st year econ student can tell you that the market looks at revenue and changes to revenue just as closely as profit. If profit goes up, but revenue tanks the stock will more than likely tank too. Doesn't make sense, but that is the way it is. Some would say that common sense has very little to do with the stock market, and vice-versa.

"...RIM's advantage is their network, not their devices…"

I wouldn't minimize their hardware and embedded OS. I've had a 7290 (Treo 600 prior) for the last 8 months. The hardware has been bullet proof after multiple drops to concrete, falling down flights of stairs, and being stepped on while on a flight to Europe. The embedded OS, while not a robust platform for application development, has NEVER so much as burped while averaging ~ 75 emails a day (with attachments) all over the world. It also does a good job of multitasking.

The phone component is more then adequate and the Bluetooth implementation is solid. As a device designed to provide extremely secure and reliable access to email (especially from behind a corporate firewall), it is tops in its class.