BlackBerry evolution, by David Geer

Contact me at david@geercom.com, via this form or at 440-964-9832 (Fax:440-964-2172).

Wireless Business & Technology

BlackBerry Evolution

By: David Geer

An unnamed source close to RIM tells Wireless Business & Technology that the RIM BlackBerry cellular phone (service by AT&T Wireless) is ready to ship. The device remains almost identical, adding a headset for cellphone capabilities. The major change (if you can call it that), in order to add cellular, is the headset jack at the top. The new device will weigh in at about a quarter of an ounce off (presumably more, though possibly less) its current weight. It will also be slightly thicker or thinner. RIM has worked hard to keep the form factor the same while adding the cellular phone option.

RIM is literally tacking on the cellphone option as a gimme. Use it, don't use it, notice the change or ignore it, it's up to you. It's just a way of providing further utility and adaptability to what is already the device of choice for the enterprise customer. Cellular voice is not the hottest feature on the new BlackBerry either. So what's new?

The BlackBerry data packet modem will now operate on the GSM/GPRS network. GPRS is the technology behind the AT&T Wireless data network; GSM is the technology behind the AT&T Wireless voice network. With some modest internal hardware additions and a strip of new software code, the BlackBerry has morphed for the good. In addition to a cellphone icon on the main screen, there will likely be some integration with the existing address book too. In the U.S. the new BlackBerry handhelds are going to run on the AT&T Wireless and VoiceStream networks.

But what is the hottest news? From now on all new BlackBerry handhelds will be developed strictly with J2ME (Java 2 Micro Edition) operating systems and software! This is the version of Java that was written for mobile devices and handhelds. The change will make it very easy to add many new enterprise applications to the BlackBerry very quickly (meaning both fast and soon). You will be able to download and install these new applications wirelessly as well.

Why Java? Most enterprise apps are written in Java anyway. J2ME on the BlackBerry brings almost instant compatibility with the vast majority of enterprise software. For example, you may soon be able to access your corporate accounting system if it's written in Java. The typical BlackBerry customer will agree that adding other kinds of corporate data availability is what's new and hot about the new BlackBerry.

The new voice option is not intended to make BlackBerry handhelds a competitor to any cellphone offerings. It's simply going to be an added feature for the BlackBerry customer who also wants voice. Wireless data is still BlackBerry's primary selling point, and they're maintaing that while adding a cellphone so you only need one device if you so choose.

So is AT&T Wireless adding RIM or is RIM adding AT&T Wireless and a humongous new distribution channel? We say the latter. In fact, it's a plan as thought-out as the design of the new BlackBerry itself. According to Roger Entner, program manager for the Wireless Mobile Services Group at Yankee Group, "... RIM is really in the driver's seat. I think we will see that RIM is going to sell [the new BlackBerry handhelds] through all the GPRS providers. I believe they already have an agreement with VoiceStream and subsequently I would not be surprised if there would be a deal with Cingular."

The big three American GPRS players (VoiceStream, AT&T, and Cingular) have roaming agreements in place. The new RIM devices will work across these GPRS networks. This being the case, it is reasonable to assume that we will soon see all three offering the new BlackBerry handhelds. GPRS is going to be the data technology of choice for the RIM BlackBerry so that the device may have easy portability to Europe, where RIM is signing with pretty much every major GPRS player out there.

Though it's too early to predict sales results for the new BlackBerry handhelds, the best barometer may be how the device sells for Rogers AT&T Wireless, Canada. Rogers, with 85% of Canada's coverage and GSM/GPRS, will help us predict how sales will be under the smoothest possible conditions.

"That's going to be one to really eyeball," says Adam Sewall, executive in residence at ComVentures, "because they've got ubiquitous coverage that's going to enable the device to be proliferated across their footprint.... It should deploy quickly, be less costly, and...it will be a very good indicator of what the acceptance rate is for a combined device."

Analyzing Pie - Who Owns Which Pieces of the Deal?

Adam Sewall examines a slice or two: "In order to enable access through corporate firewalls, enterprise customers are going to have to deploy some of the RIM software back into their apps and behind those firewalls." These requirements place RIM's foot squarely in the door of each customer. First they sell the necessary software, then they grow customer dependence with value-added offerings down the line. As for the large wireless carriers, they only have to offer a little more (in this case, the new BlackBerry) to secure a lot more business. On the other hand, a smaller player like RIM, by adding a lot more distribution and exposure to millions of customers in these worldwide customer bases, secures a lot more business as well.

Rumors - When Do We Get One?

"... from what I've heard we're talking about the end of March, beginning of April, [having] some stuff [the new BlackBerry handhelds] in people's hands" - Adam Sewall, ComVentures

What's Next (el)?

According to Laurie Hoyt, business development director for Nextel Communications, a great deal. Unless someone beats them to the punch, come fourth quarter (or as late as first or second quarter of 2003), Nextel will be the first to put a mike and receiver into a BlackBerry, making it a cellular phone you can put to your head. It will also be equipped for use with an earbud. "The important feature that we wanted for this device from a usability standpoint (and after reading some of the customer feedback from the initial launch of the BlackBerry voice device)," says Hoyt, "was to solve the problem that if the thing is laying on your desk ringing and you can't find your headset, you can't answer it. [With the Nextel version] you don't have the panic of having your telephone ringing and needing to dredge your earbud out of your briefcase in order to answer the darn thing. You can slap it to the side of your head and say hello. We think that's an important usability differentiation."

Nextel has fallen in love with the BlackBerry form factor. Their device collaboration will be like the RIM 957 large format Internet pager. "That was a critical design choice that Nextel made well over a year ago," says Hoyt, revealing how long and well their plans have been laid.

More Fact Than Rumor - What Will It Look Like?

"The external form factor is still in flux. If you think about it resembling today's 957, probably a little smaller, curvier, hipper looking, that's the basic form factor we're working at." - Laurie Hoyt, Nextel

More Rumor Than Fact - When Again?

"Our formal announcement is that we're planning to bring the device to market in the fourth quarter of this year. We don't have a specific date that we're prepared to announce yet because we are still doing the development project. So we have a target date but we're not talking about it yet." - Laurie Hoyt, Nextel

Unless other iDen (Integrated Digital Enhanced Network) networks proliferate between now and a year from now, Nextel will be the sole carrier and distributor for this "Blackvariant" (to coin a phrase). Though Motorola's name keeps cropping up, their part in the RIM/Nextel device could be as simple as both Nextel and RIM having to acquire their respective iDen licenses from Motorola. On the other hand, what isn't known about the apparent RIM/Motorola license-swapping agreement may be telling.

"RIM had to license the iDen technology from Motorola in order to design a product that incorporates iDen," says Hoyt. "We are not a party to the licensing agreement between RIM and Motorola. But I understand that that is a reciprocal agreement that Motorola is also acquiring certain limited rights to BlackBerry. But I really can't formally talk or address that deal because we're not a party to the licensing agreement. I would just suggest you take a look at what's written about that, about one sentence in our press release. And that's pretty much all we know. They did that deal without us at the table."

'J2ME Too Please!'

The Nextel BlackBerry handhelds will be all J2ME as well. If there's a consistent pattern here, it's that J2ME scores 100%, Microsoft scores nothing. We don't think you can even say Sun did it to Microsoft; it's more like J2ME did it to Windows, which is as it should be - let the best platform win. No offense to Microsoft but it's too easy an analogy not to recognize. J2ME code defeating MS code in this arena where the small, swift, and fleet of foot must prevail was highly predictable. If I had a dollar for every time I heard a programmer say how Microsoft needs to start commenting out a lot of code if they are going to keep their software streamlined, I'd be driving a new Lexus.

Why J2ME?

Some say the Java developer base of 250,000 (and some say even 300,000+) programmers alone is enough to convince them. At the same time I still hear as many recruiters and companies screaming that they need Java developers as I did when Java first became popular - and that's quite a few by the way.

"There are a lot of new products that have been introduced lately that are Palm-based and there is obviously a very large population of Pocket PC devices in the world," says Hoyt. "But there are a lot of folks, including Nextel, who are hanging our hats on Java primarily because there is such a huge base of Java programmers already and Java drives most of what happens on the Internet. We really (in conjunction with Sun and Motorola) believe that Java is not only a great operating environment because of the efficiencies that it produces in the device itself, but because it gives us access to one of the largest developer communities in the world."

Which Apps?

According to Hoyt, "We are currently working through the market research that's necessary to determine which enterprise applications we would like to make sure we have available at the time we launch the device." She assures us though that Nextel's whole focus is on the wireless business customer and their application demands. "We intend to have a very robust set of business applications to run on all of our Java-based products including the Nextel BlackBerry," says Hoyt.

We thought it appropriate to squeeze not only Nextel but also all of our sources (maybe hug is more appropriate?) for some dish on which applications specifically are at the top of the list and sure to "come with" initially. Whether a near or far release, there is no word on what new enterprise J2ME apps are guaranteed when these new BlackBerry handhelds arrive. Nextel is, however, able to assure us of this. Their 'Berry will carry all the Nextel favorites: cellular voice, direct connect, SMS, and wireless Internet access as well as "a full version of the BlackBerry e-mail product." Let's see here, that's all you have with a Nextel phone now, all you have with a BlackBerry now, plus extra enterprise applications, types, and quantities yet to be determined? Yes.

Sales Rumors?

Laurie Hoyt: "Phenomenal, fantastic and huge!" WB&T: "All of which are not number specific?" Hoyt: "All of which are not being disclosed at this time."

If you deduce as we do that you can't withhold information that you don't have, you know that strong sales predictions exist for the Nextel device. We just don't get to see anyone stick their neck out with any numbers until after the fact. Fair enough.

SIDEBAR

Long Term Market Movement

The RIM Nextel BlackBerry will take some time to penetrate its market, since the market's barely been tapped by RIM itself. Manufacturing capacities will grow following demand, not anticipating it. Nextel is already selling over half a million of its current devices each quarter. "Something like 35-45% of all construction companies in the U.S. use Nextel and it may even be more than that," says Hoyt.

Nextel expects their BlackBerry to be a formidable portion of their overall sales in the first year and that it will earn a notable share of units bought for voice and data in the white collar demographic. Nextel's target is solely the enterprise customers who have embraced BlackBerry handhelds and Nextel phones. Perhaps the crossbred BlackBerry will follow the promising path of the Reese's Peanut Butter Cup. Hey you got a BlackBerry in my Nextel! Hey you got Nextel in my BlackBerry! Mmmm! Nextel also plans to evolve Direct Connect to first work within any market whether your home market or not, and eventually across the whole United States.

Which BlackBerry for you? Ask someone who has owned a BlackBerry and a Nextel phone what they think, and maybe wait, or plan to get a new one once the verdict is in on all versions. Our source close to RIM says the Nextel RIM device will have a huge impact. Check what the coverage areas actually are at that time. We may even have some solid QoS figures to go by, by then (2003). We also have some question as to whether the introduction of carriers other than RIM will decrease the QoS. RIM had delivered on QoS, but will they be dragged down by the carriers who haven't?

According to Entner of the Yankee Group, "[There] is certainly the potential for dramatic success, it's just what you do with it. Will they be able to develop applications that meet...customer requirements? The carriers in the past have been very good at underwhelming us with their delivery after really overhyping things. We all remember wireless WAP, we are WAP. And some people are cynically saying WAP is CRAP, and I don't blame them for it. So we're largely in a show-me stage. [Consumers are saying] yes, I hear what you are saying but show me, show me the money. They're doing the right things but now I really want to see the useful applications for the consumers."

So do we.

Copyright 2005 SYS-CON Media. All Rights Reserved.