BlackBerry Under Siege in Europe
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The iPhone has taken a big bite out of the BlackBerry in a market where the older phone once dominated: business customers in North America.
Meanwhile, in Europe, Samsung is poised to do the same to Research in Motion, BlackBerry's maker, as a growing number of businesses are buying, or plan to buy, phones using the Android operating system.
Although BlackBerry is a must-have accessory for the growing business class in the developing economies of the world and RIM is adding customers there at a healthy clip, the company faces a problem in its established markets. Businesses are looking for another option besides the BlackBerry.
RIM, Apple and Android phones now equally share the workplace market. In a recent global survey of information workers -- people who use a computer or another smart device for at least an hour a day -- Forrester Research found that 27 percent of smartphone users said they had an Android phone; 26 percent, a BlackBerry; and 24 percent, an iPhone. "Android and Apple together are eating BlackBerry's lunch," said Frank Gillett, a Forrester analyst.
While some companies are cautious about allowing employees to use Android phones in the office because of security concerns, more businesses that let employees bring their own devices have approved Android devices. Apple's iPhone continues to be popular. Samsung Electronics sold 300 million handsets in 2011, almost all of them Android phones, and became the biggest phone manufacturer in the world. It appears to be in the best position to profit from a shift in the market.
"We've seen quite a huge growth of Android in the enterprise over the last 18 months," said Nick McQuire, research director of enterprise mobility strategies at the International Data Corporation. "We see it as being neck and neck with Apple to be a top mobile enterprise platform in Europe."
RIM's answer to the increasing popularity of Android handsets and the iPhone is a new version of the BlackBerry software, called BlackBerry 10. But phones based on the new software system have been delayed several times and are now not expected until late 2012. Thorsten Heins, the company's new chief executive, said the new software would address the "consumerization of I.T.," referring to the growing trend of businesses letting their employees choose which devices they bring to work.
Mr. Heins believes that RIM's advantage in the business market remains the company's focus on security. He said that RIM regularly speaks to chief information officers, who say they do not like that Android devices and iPhones have become prominent in the work place.
"They are in a pickle. Their pickle is security," Mr. Heins said in an interview. "When the first big security flaw even happens in one of the large enterprises, you will see this turn around. Wait for the day this happens."
But waiting is not something people in businesses are doing. I.D.C. recently surveyed business managers and information technology managers at 728 businesses across seven Western European countries and found that Android was the fastest-growing mobile operating system for business customers in 2011.
Chief information officers at big enterprises said they were not yet formally supporting Android, though all of them have said they had plans to do so in the next 18 months. They are probably hesitating because they need to plan security measures to protect corporate devices, Mr. McQuire said.
Still, the general acceptance of Android in European businesses is a harbinger of RIM's continued struggles. The Tieto Corporation, a European firm that provides information technology services to large companies, said it had seen strong and increasing demand from customers for Android-based business software. Ville Virtanen, an enterprise mobility marketing director at Tieto, said that customers found Android phones to be cheaper and that the software was the least complicated for distributing work-related apps to employees.
And security concerns are being addressed. Some of Samsung's new phones, like the Galaxy S II, include extra security features for enterprise customers. The newest version of Google's Android operating system, called Ice Cream Sandwich, has built-in encryption. In October, Samsung introduced a program called Samsung Approved for Enterprise, which includes a suite of tools tailored specifically for businesses.
Apple's ascendance in the business market with the iPhone and iPad has been especially surprising to many people because the company had shown little interest in catering to the needs of corporate users when it made solely computers. Not long after the iPhone came out in 2007, however, Apple began adding features to the device, like better compatibility with Microsoft's Exchange, a messaging system that is ubiquitous in big companies.
"Once Apple added those capabilities, the floodgates opened," said Mr. Gillett of Forrester. "It was very hard for I.T. to look the C.I.O., C.T.O. and powerful employees in the eye and say, 'You can't use that device.' "
Planet Magpie, a California-based information technology consulting firm, said that employees working for the majority of its 350 clients were using the Apple phone. "A lot of people on BlackBerrys have switched over to the iPhone," said Robert Douglas, president of Planet Magpie. He said that for many businesses, ditching the BlackBerry has actually decreased costs, because companies no longer have to support the BlackBerry enterprise server, RIM's proprietary system designed to protect data on devices. RIM's server, he said, was "always a bit flaky."
RIM also faces practical alternatives to the BlackBerry enterprise server, like Good Technology, an information technology company that provides security and management tools for iOS, Android and RIM devices.
The wild card in the enterprise sweepstakes is the Microsoft Windows smartphone. Nokia, the giant phone maker, has staked its future on the new software, called Windows Phone 7. Information technology managers are comfortable with Microsoft, and the company has deep relationships with most companies.
The big question is whether Microsoft and Nokia will be ready in time to exploit RIM's weakness. Windows Phone 7 is shipping on several new handsets, like Nokia's well-received Lumia 900, and its Windows 8 software for tablets is set to land this year.
Kristen Batch, a spokeswoman for Microsoft, said the company was not ready to announce its plans for business customers.
Waiting is a risk RIM and its new chief executive are willing to take. "I don't want to launch a product that isn't ready," Mr. Heins said. "I want it to be a perfect experience."
Nick Wingfield and Ian Austen contributed reporting.
First Published January 30, 2012 12:00 am