Blackberry Smartphones Often Curse Computer Science Essay

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You can't live with them, but you can't live without them. Users of BlackBerry smartphones often curse the flashing red light that tells them, wherever they are, that yet another e-mail demands their attention. But they curse its absence even more. This week millions of them, first in Europe, the Middle East, Africa and India, then in the Americas, found themselves without e-mail, messaging and internet services, sometimes for long periods. On October 13th, three days after the trouble had started, Research In Motion (RIM), the Canadian maker of the smartphones, said services had been fully restored. Mike Lazaridis, one of RIM's two co-chief executives, apologised to his customers. "You expect better from us," he said. "I expect better from us." By then, many customers had vented their spleen at RIM on Twitter and Facebook (not, presumably, from their BlackBerrys).

The cause of the problem, RIM executives explained, lay in the failure of a switch in its European infrastructure (in Slough, west of London). A redundant switch that should have taken over did not. That caused a backlog of messages in Europe and hence the initial regional delays. The spread of the problem to the Americas by October 12th seems to have been a consequence of the global nature of BlackBerry traffic, as messages to and from Europe built up and caused delays on the other side of the Atlantic.

For RIM, the interruptions could scarcely have come at a worse time. The company has had a bad year. In its most recent quarter (ending in August) its revenues were 10% lower than a year before, at $4.2 billion. Its profit, at $329m, was down by more than half. According to Gartner, a research and consulting firm, in the second (calendar) quarter RIM's share of the smartphone market declined to 12%, from 19% a year earlier.

BlackBerrys, it is true, still have lots of enthusiastic followers. Commuters and corporate road warriors needing to keep in touch with colleagues and clients swear by them, as well as into them and at them. A QWERTY keyboard of buttons is kind to clumsy middle-aged thumbs (though touch screens are also on offer). Information-technology departments, particularly in companies that put a special premium on security, love them too: life is fairly simple with a PC on every desk and a BlackBerry, connected to the corporate e-mail system, in every hand. And many youngsters, especially in Britain, have taken eagerly to BlackBerry Messenger (BBM), a free instant-messaging service. Less happily, politicians called for BBM to be shut temporarily during this summer's English riots, because some were using it to organise disturbances.

But the smartphone business is changing-away from RIM. Not only a growing number of road warriors, but also their bosses, want to use their own smartphones rather than company-issued BlackBerrys, and are increasingly allowed to do so. Apple's iPhone and the many Android-based competitors boast many more apps, and are simply trendier. After this week's palaver, some BlackBerry owners may be tempted to treat themselves to the latest version of the iPhone, which goes on sale from October 14th. [See Appendix 1 for a comparison of smartphones]

It has not helped that RIM was slow to get new products to market, although phones with a new operating system are now appearing. The company is not only smarting, so to speak, in its core business. It has also made a lacklustre entry into the tablet market, shipping 500,000 of its PlayBooks in its first quarter but only 200,000 in its second. Gartner describes its tablet operating system, QNX, as "a promising platform", and thinks RIM may sell 3m PlayBooks this year. But even if it manages that, that figure looks puny next to forecast sales of more than 46m iPads and 11m Android-based tablets.

Some BlackBerry customers sound remarkably forgiving. A "small-business owner" who took part in RIM's press conference on October 13th said that he had intended to challenge Mr Lazaridis's contention that services had been restored. Yet by the time he spoke his e-mails were flowing again. "Thank you for all you've been doing," he said.

Others may be less patient. Investors certainly are. RIM's share price has fallen by more than 60% since February. Whatever wonders its co-bosses, Mr Lazaridis and Jim Balsillie, have worked in the past, two leaders now look as bad as none. Jaguar Financial, a Canadian investment bank, smells complacency. It wants a change at the top and in direction, perhaps even to break RIM into three: a network company, a device-maker and a holder of patents. It claims the support of the owners of 8% of RIM's shares.

Daily Telegraph, 17th December 2011

Will BlackBerry survive 2012?

It seems that every month BlackBerry-maker Research in Motion has more bad news to announce. In November it paid a $365million charge for unsold PlayBook tablets; yesterday it announced that crucial new phones would now be delayed to the latter half of 2012, rather than being out by March. Co-CEOs Jim Balsillie and Mike Lazaridis charitably cut their pay to just a $1 each, but analysts and critics argued they're still overpaid. One writer on the respected blog PaidContent blog said the pair should have been "fired months, if not years ago".

At the heart of BlackBerry's problems lies its troubled transition to a new operating system: in order to compete with the iPhone and with Google's Android phones, the Canadian company has had to rebuild its software from the ground up. So far, the only product using a new version is the underwhelming PlayBook. Yesterday, announcing RIM's results, Lazaridis delivered the bad news almost casually. The new OS will power a new generation of phone, but in order to compete RIM had earlier changed its mind on which chips to use. Now he said RIM could not get enough of them and that delays were unavoidable. Lazaridis compounded the disappointment for investors by cutting the firm's prediction of sales to between 11 and 12 million smartphones in the current Christmas quarter, down from 14.8 million over the same time last year. Others companies' sales are rising at his expense.

Last month, analyst Ian Fogg said that "if you look at RIM's track record they have a history of missing launch dates; that doesn't bode well." He warned ominously that "If they fail to ship quality products we'll see a slow decline," and it would appear that Fogg's predictions are already coming true. With rather dry understatement, however, Lazaridis said in a statement that "It may take some time to realise the benefits of the platform transition that we are undertaking, but we continue to believe that RIM has the right set of strengths and capabilities to maintain a leading role in the mobile communications industry". When he claimed that people tell him "every day" that BlackBerry is the best communications device around, commentators immediately said he was listening to the wrong people.

RIM's share of the smartphone market in the US fell to 9.2 per cent in the third quarter from 24 per cent in the same period last year, according to research group Canalys. Increasing numbers of analysts across the board now find one conclusion inescapable: RIM doesn't just need customers - it needs a buyer.

Reuters, December 19th 2011

Could RIM's survival mean ditching the BlackBerry?

It might seem like corporate heresy but an increasing number of technology investors and experts are asking whether Research in Motion needs to ditch its BlackBerry handset business to survive. The idea that is gaining favour, albeit only among a minority of shareholders, would see the Canadian company fully open its secure and highly respected network to rival smartphone providers and concentrate on that business while getting out of the hardware game altogether through a sale.

Disappointing quarterly results, including a dismal outlook for Blackberry sales and word that RIM would delay the introduction of new devices, sent its shares down more than 11 percent to their lowest levels in almost eight years on Friday. Just before those numbers were released, activist shareholder Jaguar Financial called on the company to sell its handset business and monetize its patent portfolio while retaining the high-margin services business. "Jaguar believes that the road map to value restoration lies in a sale of RIM whether as a whole or in separate parts," it said.

RIM's spidery, data-crunching network reaches behind corporate firewalls and taps into mobile networks globally. The network, unique among handset makers, has been a cornerstone of the BlackBerry's growth - with email and instant messages routed through RIM's own enterprise servers and data centres, where it is encrypted and pushed out to subscribers. There are no middlemen to intercept corporate or state secrets, or even the flirty chats of teenagers who love the free BlackBerry messaging. [See Appendix 2 for more detail]

Terminal Decline?

Jaguar, which claims support from shareholders who own about 8 percent of RIM's stock but only owns a tiny fraction itself, also reiterated its call for a change in the company's leadership. It has called for a new "transformational" leader to replace RIM's co-CEOs Mike Lazaridis, the company's co-founder, and Jim Balsillie, the mercurial salesman who has marketed the BlackBerry to the world. It is not alone in wondering whether a sharp decline in Blackberry sales - the company said it expects the number of devices it ships in the quarter including Christmas will drop as much as 26 percent from a year ago - is a sign of terminal decline for the product.

The company's network has stronger margins and more secure recurring revenue, though it still needs to be fully exploited. "If they want to maintain that asset, if not stabilize or grow it, they need to open it up to the other platforms and look at themselves as an enterprise software company," ThinkEquity analyst Mark McKechnie said. RIM is likely already working on just such a change, said a U.S.-based shareholder, who declined to be identified. The fund manager, whose firm owns more than 1 million RIM shares, said delays launching new software and devices may reflect efforts to fully accommodate devices from outside RIM's own stable.

A year ago, talk of ditching the BlackBerry would have been almost unthinkable, let alone garner any serious attention. That was before a spectacular meltdown that has seen the device, once an essential tool in the top echelons of business and politics, being pushed aside by Apple's iPhone and smartphones powered by Google's Android software. The deterioration in the business has been so great that some analysts now estimate that RIM is barely making money on BlackBerry sales.

Massive Discounts

That isn't its only problem. The PlayBook, the company's latecomer in the tablet market dominated by Apple's iPad, has been a deflating disappointment, forcing RIM to offer massive discounts on the unloved device. It took a $485 million pre-tax charge for the Playbook, which runs on QNX software that RIM plans to use in its future devices. The severity of RIM's problems shows up in its share price. It crashed to a low of just $13.12 on Friday, after trading as high as $144 in 2008 and about $70 in February this year. A company that was once worth almost $80 billion is now valued at barely $7 billion. Meanwhile, the subscriptions that businesses and network operators pay RIM each month brought in more than $1 billion in each of the past two quarters.

The company declined to comment on talk that it will ever abandon the BlackBerry and did not grant interviews with either Lazaridis or Balsillie for this story.

Balsillie announced a comprehensive review of RIM's operations on a conference call with analysts on Thursday. "We plan to introduce new devices into the smartphone and tablet market, as well as products and services that better leverage our global cloud infrastructure, and unique capabilities within the smartphone market, he said.

While RIM hasn't given any indication it plans to give up on its BlackBerry handset, it has started to emphasise its services business.

Extra Step

In late November, RIM took a first step that could eventually lead to establishing the network as a standalone operation. It introduced a software tool giving corporate customers the option of linking iPhones and Android devices to the BlackBerry network. The move stops short of offering outsiders access to its unique technology that encrypts data and pushes it out to the BlackBerry. Going that extra step is exactly what some critics suggest that RIM needs to consider. RIM charges a monthly fee to every BlackBerry user, making its network a stable stream of revenue and giving the company an advantage over every other handset maker. For RIM, it has become a more reliable source of profit than shipping its own smartphones.

The strategic reasoning goes: Why build a staid Volvo or a flashy Ferrari when you can own the toll highway on which they drive? "There is a massive under-utilised asset in the services infrastructure which is very profitable. I think they are getting ready to come to market with a way to leverage that," said the U.S. fund manager. "At a minimum, I think they are going to start aggressively doing things that leverage their infrastructure beyond RIM handsets."

Risk in Waiting

Mike Abramsky, an analyst at RBC Capital Markets, raised the prospect of RIM splitting in two back in July. For him, the biggest risk is waiting. He says RIM's still-growing global subscriber base gives it time to make the move, but the network too would suffer if the BlackBerry keeps slipping. Alternative networks that provide many of the same features as the BlackBerry enterprise network are already making inroads. Eventually even that jewel could lose its cachet, he says. "The risk in waiting is that as more companies switch over to alternatives, it will be difficult to attract them back to BlackBerry even as a network-only business," he said, referring to companies such as Good Technology and SAP's Sybase, which encrypt and manage data for iPhones and other devices. Abramsky said offering a managed network for users of all handsets would expand RIM's potential market by six times or more. At the same time, the network business likely boasts an 80 percent gross margin versus a handset business in the high 20 percent range.

Lazaridis has been betting on reinvigorating the Blackberry by hoping that QNX, the new operating system, will help RIM catch up and perhaps overtake the iPhone and Google's Android and stifle Microsoft's emerging mobile platform. The new system is supposed to allow devices to be updated on the fly and should also help third-party developers that struggle to write appealing apps in RIM's aging framework. A dearth of BlackBerry apps compared with Apple and Android has limited RIM's attractiveness to many consumers.

But RIM has yet to show it can make the transformation successfully. The first of the new generation of QNX-equipped smartphones - the BlackBerry 10 line - was initially promised for early next year, but on Thursday RIM said it did not expect to release a BlackBerry 10 device until the latter part of 2012. The delay in the make-or-break QNX line will only accelerate the drive among investors for sweeping change.

What's clear to many investors and analysts is the status quo will mean an accelerating fade into irrelevance. "Investors have been extremely patient and they're being asked to wait another year," said a Canada-based shareholder. "A year from now, will all this be too little, too late?"

The Guardian, January 4th 2012

Research In Motion is reportedly close to a decision on stripping its co-chief executives of their other shared role as chairmen of the board, a change that could meet a key demand from angry and disillusioned investors. The National Post newspaper, citing "sources familiar with events," said Barbara Stymiest, currently an independent member of RIM's board, is leading the race to replace the co-founders Mike Lazaridis and Jim Balsillie in the chairmanship. RIM shares jumped more than 7% on investor hopes that the struggling BlackBerry maker was listening to increasingly strident demands for change.

At the same time, the company has slashed prices of its PlayBook tablet in the US by up to $400 (£255), offering all three versions of the product - with storages of 16GB, 32GB and 64GB - for the same price of $299 until the finish of its current financial quarter at the end of February. That is a discount of $400 against the original price when the device was first introduced in April 2011. But with RIM having taken a $485m writeoff against the value of PlayBooks in its warehouses in December, effectively writing down the value of 1.2m of the devices that it had to zero, it now profits if it can sell them at any price. It has shipped roughly 850,000 of the devices in its first nine months.

The missteps over the PlayBook and delays to the introduction of handsets built on a new operating system, now not expected until later this year, have intensified the focus on RIM's unusual boardroom structure, where co-founders Lazaridis and Balsillie are both co-CEOs and co-chairmen. They are also RIM's second- and third-largest shareholders, with a little more than 5% of the stock apiece. "Any talk about an independent chairman is going to give this company a boost. It will increase the likelihood the value of this company will be unlocked," said BGC Partners analyst Colin Gillis. "It breaks the stranglehold the current CEOs and co-chairs have on the company." But other analysts doubted Stymiest, if named to the chairmanship, would actually assume the transformational role that activist shareholders are calling for. Jaguar Financial Corporation, which says it speaks for 12 of the company's 20 largest shareholders and 8% of its stockholders, has been calling for some months for boardroom change including the splitting of the CEO and chairman roles.

The precipitous RIM share-price drop in 2011, which has seen it barely worth the value of its assets, prompted calls by some analysts and investors for RIM to consider strategic alternatives such as a split or an outright sale of the company. Sources told Reuters in December that and other suitors had considered making a bid for RIM, but the board wanted to focus on a turnaround instead.

In June, RIM agreed to study its unusual corporate structure and report back to investors by the end of January. RIM did not respond directly to the National Post report, but said a committee of its seven independent directors was on track to deliver recommendations by 31 January. That committee includes Stymiest, who has sat on the RIM board since 2007 and who is one of Canada's most successful businesswomen. Analysts were not sure if Stymiest could herald the more radical change activist investors want if she took over as chair, or if such a change would just be more window-dressing at a company that has earned a reputation for over-promising and under-delivering. "She's being thrust into the limelight to appease shareholders. It doesn't really do much for me personally," said Matthew Thornton, an analyst at Avian Securities in Boston. "This one action doesn't solve anything, in my mind."

CNET, January 3rd 2012

There's still a lot to like about RIM. Seriously….

Roger Cheng is a senior writer for CNET covering mobile technology. Prior to CNET, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade.

OK, so I've been as hard as anyone on Research In Motion. But it's not all bad.

Sure, the company is burdened with a bloated management structure, leaders who in recent months just can't do anything right, and a trajectory that only seems to be headed further south. It's in the doghouse with investors after losing more than three quarters of its market value last year. More importantly, RIM's share in its home market of North America is slowly being ceded to Apple and Android.

But with all of the RIM bashing in recent months, it's easy to forget that despite its troubles, the company is actually on solid financial footing. Sure, its stock has tanked over the past year, but share price is a leading indicator, and not an accurate measure of the company's current financial position.

RIM, for all of its missteps, is still a company able to generate more than $5 billion in revenue and nearly $900 million in cash flow from operations in a quarter. It is a company with a clean balance sheet held down by little debt. It is a company that has a valuable stash of intellectual property at a time when owning the right patents makes all the difference.

In other words, maybe it's time to cool it with the BlackBerry-is-doomed talk.

It's hard not to get sucked into that line of thinking when the constant flow of news is negative. On the heels of disappointing quarterly earnings last month, co-CEOs Jim Balsillie and Mike Lazaridis warned that the first next-generation smartphone using BlackBerry 10 wouldn't hit the market until late 2012. Earlier today, the company slashed the prices on its PlayBook, a further illustration of its inability to move the failed tablet.

But a bit of positive news also trickled out today, with a report that RIM is preparing to name a new chairman and strip the title away from Lazaridis and Balsillie--a move that could bring a more objective view to the direction of the company.

Here are some other positive points to consider: BlackBerry's brand, which may have lost its luster a bit in the U.S., is still strong overseas. Much of its growth is coming from the emerging markets, where phones admittedly are of the lower-end variety. One of the primary drivers of that popularity is the heavy use of its BlackBerry Messenger service, which further drives adoption.

So despite the doom and gloom surrounding the company, RIM's subscriber base actually grew 35 percent over a year ago to 75 million users in the fiscal third quarter. And while the 14.1 million BlackBerry devices it sold in the period was a slight decrease from a year ago, it's still an impressive figure that puts it up in the same stratosphere as the top smartphones manufacturers. In comparison, market leader Samsung Electronics shipped 27.8 million units while Apple shipped 17.1 million iPhones, according to Strategy Analytics.

RIM also has a collection of intellectual property that still gives the company additional value. Between its applications and granted patents, it has the largest portfolio out of all of the major technology companies, according to a study by MDB PatentVest. Intellectual property is at a premium after Google agreed to buy Motorola Mobility for $12.5 billion, largely for its patent portfolio, and a consortium of technology companies--including RIM--paid $4.5 billion for patents purchased from bankrupt Nortel Networks. Sanford Bernstein analyst Pierre Ferragu estimates the company's patent portfolio could be worth $3 billion to $4 billion. The company currently has a market capitalization just above $8 billion.

RIM's assets are worth enough to garner interest from a number of companies, from Amazon to Microsoft and Nokia. While I still don't think either combination would have had a legitimate chance, the perceived value those companies saw in RIM is real.

Clearly, RIM has a ton of challenges ahead of it. As an investment, the stock is a bad bet. But it's too easy to forget that the company has built up a position of strength that it won't be letting go of any time soon.

RIM may still end up crashing eventually, but I wouldn't count it among the walking dead yet.

Appendix 1 - Comparison of Smartphones

InfoWorld, January 4th 2012

iOS 5, Android 4 "Ice Cream Sandwich," Windows Phone 7.5 "Mango," and BlackBerry OS 7 were all released in the past few months, each promising to advance the iPhone, Android smartphones, Windows Phones, and BlackBerrys respectively to the head of the mobile pack. But only one can be the best.

InfoWorld has tested each of the major mobile OSes on the flagship devices for each OS to see what the best smartphone is for business and professional users. The answer is without a doubt the iPhone 4S, thanks to iOS 5, the Apple ecosystem, the smartphone's solid hardware, and the new Siri voice-controlled "intelligent" assistant. But as good as the iPhone 4S is, it does not beat the competition in every respect, showing it has room for improvement and that Apple doesn't excel at every aspect of modern mobile computing.

錯誤! 超連結參ç…不正確。錯誤! 超連結參ç…不正確。錯誤! 超連結參ç…不正確。Siri voice-based personal assistant to the mix. Siri is simply amazing, despite its beta status. You can actually talk to your iPhone and have it understand much of what you are asking and saying. Its voice recognition, both for dictation and interactive queries, is unmatched by the other voice-capable platform, Android, whose once-heralded voice search and dictation features suddenly feel primitive. Windows Phone 7.5's voice search is the least accurate, and it offers (inaccurate) dictation only for sending text messages.

Apple has consistently made its OS upgrades work with devices produced in the previous two years, ensuring both a more coherent ecosystem and rewarding customers' investments in its platform. By contrast, Android devices are rarely upgraded to a new OS, even those that come out mere months before an OS upgrade, as has become painfully clear in Android 4's recent release. Likewise, RIM orphaned existing BlackBerry users when its new models came out last summer, and the company says these new models won't run the BlackBerry 10 OS expected late this year. Would-be Android and BlackBerry buyers thus should think twice.

The other lowlights for application support are the BlackBerry's poor app catalog and generally clunky core apps, Windows Phone's primitive (and embarrassing) Office apps, Windows Phone's very poor voice recognition in its voice-command interface, and Google's malware-laden Android Market. And darts to Apple and RIM for promoting messaging and, in the case of iOS, videoconferencing apps that work within only their own platforms.

錯誤! 超連結參ç…不正確。HTML5 support matters in the websites you access, no mobile browser works with as many aspects of the still-evolving standard as Apple's Safari. In second place is, surprisingly, BlackBerry OS. Android 4 is in third place, and Windows Phone is far behind. Safari also does better than the other browsers when accessing AJAX-oriented websites, though it's not as yet up to the level of desktop browsers.

Safari also has two very handy browser capabilities that keep it ahead of the pack: the Reading List feature for temporary bookmarks and the Reader feature for simplified Web page display. But Safari isn't always the best mobile browser; Android 4's Chrome browser and Windows Phone's Internet Explorer provide a handy option to request a desktop page rather than the not-always-optimal "mobile optimized" page many sites serve up to smartphones.

There are just a few lowlights on this category. One is Android 4's inability to properly render some Web pages or to identify itself as either a smartphone or tablet to many websites. Another is iOS's poor support for social network sharing of Web pages. Finally, there's Windows Phone's embarrassingly poor HTML5 compatibility.

錯誤! 超連結參ç…不正確。錯誤! 超連結參ç…不正確。BlackBerry Enterprise Server (BES), and many of its security settings require IT intervention. It's a Pyrrhic victory. Without BES, the BlackBerry is even less secure and manageable than Windows Phone 7, though BlackBerry OS supports VPNs, whereas Windows Phone 7 does not.

iOS comes in second after the BlackBerry, with core security capabilities manageable directly from Microsoft Exchange and extended controls manageable through mobile device management (MDM) tools. iOS 5's new support for the S/MIME email security protocol and other MDM extensions improve on the iOS 4 capabilities that finally made the iPhone acceptable to many IT organizations. Android 4 has improved significantly in this area, leaving Windows Phone 7 the only mobile OS that can't have at least moderate security and management applied to it.

Looking forward to 2012 improvements It's clear that the iPhone 4S is the best smartphone overall, at least today. But there's room for improvement in the iPhone, as there is in the other mobile platforms.

Appendix 2 - Blackberry Network Infrastructure

Adapted from Wikipedia (but checked!!)

BlackBerry Enterprise Server

BlackBerry smartphones can be integrated into an organization's email system through a software package called BlackBerry Enterprise Server (BES). Every BlackBerry has an ID called a BlackBerry PIN, which is used to identify the device to the BES.

BES acts as an email relay for corporate accounts so that users always have access to their email. The software monitors the user's local Inbox, and when a new message comes in, it picks up the message and passes it to RIM's Network Operations Center. The messages are then relayed to the user's wireless provider, which in turn delivers them to the user's BlackBerry device.

This is called push email, because all new emails, contacts, task entries, memopad entries, and calendar entries are pushed out to the BlackBerry device automatically and instantaneously. In addition, BES provides network security, through encryption of all data that travels between the BlackBerry handheld and a BlackBerry Enterprise Server.

BlackBerry Internet Service

The primary alternative to using BlackBerry Enterprise Server is to use the BlackBerry Internet Service. BlackBerry Internet Service, or BIS is available in 91 countries internationally. BlackBerry Internet Service was developed primarily for the average consumer rather than for the business consumer. BlackBerry Internet Service allows POP3 and IMAP email integration for an individual personal user. However, the integration features only one-way synchronization; changes to messages on the device are not reflected back to the email server. BlackBerry Internet Service allows up to 10 email accounts to be accessed, including many popular email accounts such as Gmail, Hotmail, Yahoo and AOL. BlackBerry Internet Service also allows for the function of the push capabilities in various other BlackBerry Applications. Various applications developed by RIM for BlackBerry utilize the push capabilities of BIS, such as the Instant Messaging clients, Google Talk, Windows Live Messenger and Yahoo Messenger. Social Networks Facebook, Myspace and Twitter's notification system is accessed through BIS, allowing for push notifications for them.