Blackberry’s Success

The New York Times writes about Research in Motion and its Blackberry handheld:

R.I.M.’s success continues to be a surprise because it appears to defy the prevailing model for which companies thrive and which companies fail in personal technology. It is assumed that large companies with money and sheer market power, like Microsoft, can always eventually triumph over smaller companies with a technological or popular edge (like Apple or Netscape). But R.I.M. is an example of how smart engineering and a keen understanding of customers can allow a small company to survive in the shadow of better-financed giants.

“R.I.M. has always understood that with BlackBerry that it wasn’t just about the thing you hold in your hand,” Mr. Urlocker said. “It’s about the whole package: software, security and integration with corporate e-mail.”

But the most important contribution that R.I.M.’s software makes – beyond allowing its devices to actually work – is the web of relationships it has developed, relationships that helped ensure that all major wireless carriers in the United States offer BlackBerries.

Unlike hand-held computers, which are sold directly to consumers, the real customers for wireless devices are wireless carriers like T-Mobile. Particularly when it comes to mobile e-mail, wireless subscribers’ choice in hand-helds is limited to what their carrier offers. In most cases, subscribers buy their gadgets either directly from their carrier or through retail channels under its control.

“They’ve done a very good job of getting widespread carrier support,” said Ross Rubin, the director of industry analysis at NPD Techworld.

During the company’s quarterly earnings announcement last week, James L. Balsillie, the chairman and co-chief executive of R.I.M., emphasized the importance of the company’s relationship to the roughly 60 carriers it does business with worldwide.

“The carriers have realized that they keep, by far, most of the revenues and we do the heavy lifting,” Mr. Balsillie said. “Our success is a byproduct of their success. You feed yourself last, not first.”

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Rajesh Jain

An Entrepreneur based in Mumbai, India.