RIM is facing bigger challenges than its patent case with NTP

RIM is facing bigger challenges than its patent case with NTP

	Published : Tue, 07 Mar 2006 11:15 By : Andrew Stead Print this Story

NEW YORK: The court settlement that Canadian company Research in Motion (RIM) had to accept in the patent case involving its BlackBerry messaging device with intellectual property firm NTP with a payment of $612.5 million is apparently not an end to its troubles. For, along with NTP, software major Microsoft too had been gunning for it.

Even as the legal dispute was raging, Microsoft had brought to the market its Exchange Server email software and its Windows Mobile 5 devices, which together enable companies to run mobile email service without having to resort to a service provider like RIM or even engaging a mobile operator to operate a service. Microsoft has not made its intentions clear that it is going to be a major player in this domain.

In addition to Microsoft, there are smaller players like Good Technologies, Seven Networks and Visto, which all provide similar services.

RIM is also at a disadvantage vis-a-vis Nokia, which has announced a BlackBerry-like handset and a mobile email server, Nokia Business Centre. With its 30 per cent market share, Nokia operates from a position of advantage globally, although it has said its prime focus is small and mid-sized companies. Nokia has also acquired a U.S. company, Intellisync, which offers a similar service like BlackBerry for smartphones.

More importantly, most of these companies, undoubtedly Microsoft and Nokia, do not make use of products or services that are vulnerable to patent violation charges. Customers are going to weigh this factor in future in the light of the RIM-NTP battle that went on for years and at one point even threatened RIM's very operations in the U.S.

Market research companies have come out with forecasts that while BlackBerry may be retained by as much as 50 per cent of companies using it in 2006, the percentage is likely to fall to 27 per cent by 2008. This has been mainly on account of the spell of uncertainty the service had during the legal battle with NTP, and the several alternatives that are now in the market.

Another disadvantage of RIM, as analysts point out, is the lack of any model for use by SMBs or self-employed professionals. A lost cost, operator-neutral system has tremendous advantages and what Microsoft or Nokia is offering is precisely that. Though it has an entry level service, the BlackBerry Internet Service, it does not apparently have several features that rivals like Microsoft offer. It has also not come out with its proposed BlackBerry Connect, which would have allowed users using non-BlackBerry phones or PDAs link to BlackBerry email.

RIM has around 4.3 million subscribers worldwide out of an estimated six to 10 million mobile email users. This is just a tiny fraction, according to analysts, of the potential market -- around 650 million.

The company apparently is not sleeping. It is said to be on a diversification track and is planning to support the needs of more than 60 per cent of its enterprise customers, who basically uses the BlackBerry for services other than basic email -- like mobile Internet, field sales applications and CRM.