RIM connects with carriers, grows BlackBerry service

Delivering secure reliable service, connecting with carriers in more countries and making it easier for consumers to use BlackBerry were all identified as key areas going forward by Research in Motion Ltd. (RIM) CFO Dennis Kavelman during his presentation at the Lehman Brothers Inc.’s Worldwide Wireless and Wireline Conference in New York last month. "The device is the most visible piece of the solution, it’s what you hold in your hand," said Kavelman. "As far as were concerned it’s just your access point to the service and the solution." RIM is mindful that some competitors refer to the BlackBerry service as proprietary, but the company is striving to be more "open" through its BlackBerry Connect service, which allows devices from other companies to connect to the BlackBerry servers. The company is making gains in this area and recently announced that the Treo 650 would work with its BlackBerry service on the Optus network in Australia. "It’s certainly not a one-size-fits-all market…if there are other devices that support what an individual needs then they’re going to need to connect to something," Kavelman said, adding that BlackBerry is the logical mobile email platform. In the meantime, RIM is going to continue to ramp up BlackBerry service on as many carrier networks as possible. Kavelman said RIM has recently turned on the service with about 100 carriers that were in the order backlog, adding there are now are about 100 more. "We’re working as fast as we can to connect them," he said. "Some are in really big markets, some in small markets, but we have to turn them all on because people travel." Recently, RIM announced service availability in China, with handset deals coming soon, and Kavelman said Asia is crucial to its growth strategy. The company is looking to create critical mass in Asia, which is what Kavelman called the catalyst for widespread adoption. "BlackBerry really takes off when everyone you know is using one and you don’t have one, that’s when you have to get one," he said. The RIM CFO added that they’ve already achieved critical mass in the UK, and are closing in on it in Germany, France, Italy and Spain. Currently, countries outside of North America make up 25% of BlackBerry users, a number greater than BlackBerry’s total base two years ago. That being said, at slightly more than one million users abroad and almost four million in North America, there is a lot of room for penetration growth. To capture the consumer and SMB market, RIM has invested heavily in enhancing the purchasing experience. "We’ve spent a huge amount of resources on training in-store staff, programs in channels and online training programs that we do to really get that going," said Kavelman. The goal is one-click provisioning so the device is as close as possible to being ready to use as soon as it is taken out of the box. All markets – enterprise, SMB and consumer – are the same in that they all want secure reliable service that doesn’t go down. "It’s front-page news if BlackBerry goes down for 10 minutes once a year," said Kavelman. "So our reliability will continue to be a big selling point." RIM is also hopeful that more people will get rid of the tool belt and opt to carry a single handset, namely the BlackBerry. However, that remains to be seen. "Functionality can’t be determined from a press release, so I think people have to get it in their hands and see how the stuff works," said Kavelman.

RIM connects with carriers, grows BlackBerry service

News | June 15, 2006

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