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September 23, 2010 / aaronganek

iPad vs BlackberryPad: Both Can Win

UPDATE:  RIM released the Blackberry Playbook tablet today.  The consumer friendly name and attention to game development conflict with the recommendations I proposed in the blog post below.  Good luck to RIM, but I think the company would have been better off focusing solely on enterprise.

Research in Motion (RIM) is about to unveil a new product line to compete with the iPad.  RIM, in my opinion, is the only company capable of posing a serious threat to the iPad’s dominance.  I explain how below.

Anyone that knows me will tell you that I am an Apple fanboy.  I fully admit as much.  No other smartphone maker can match the user experience Apple has crafted.   The web browsing experience and the sheer number and quality of third-party apps is unparalleled.   I use my phone a lot – over 4 hours a day.  At least 75% of my usage is dedicated to web browsing, games, and other apps.  Actual communications through the phone and email are essentially secondary features (which is how I justify staying with AT&T even though my phone drops calls constantly).   Summary:  Apple excels in the features I use most.

How can firms compete with Apple?  My answer: DON’T.

Before Apple became a mobile device company, it spent years perfecting a great web browsing experience on its desktops and a successful media store in its iTunes offering.  Apple leverages its past experience very well.  Say what you will about the app approval process (and I do often disagree with it), but when I buy an app in the app store – I trust that it is going to work.  I don’t worry about it infecting my device with a virus.  I don’t think about how it might affect other apps.  The point is: on an iPhone, things just work.  No other firm is going to be able to give me that same guarantee.

Traditional business strategies allow firms to compete on two axis: price and differentiation.

[Price] ——————————————-
Almost impossible to beat Apple on price.  The iPhone can now be bought for under $100 (down from $600 when it was first released only 3 years ago).  Not a lot of wiggle room to introduce a product below.

[Differentiation] ——————————
User experience and the app store will remain Apple’s domain.  Firms should not compete with Apple on these terms.  They must differentiate on an alternative front where they have a competitive advantage.

The success of Android will not be because of its user experience.  Apple will remain king.  Future success in the mobile wars will be monetization through the app store.  Google may benefit from its years in monetization through advertising (something Apple is only entering now).  Google must leverage its core competency.  They must beat Apple by paving the way for developers to monetize through ad sales better than in the iOS ecosystem.

Side note: I fear Android will suffer because Google has failed to create a comprehensive app store.  Apple’s AppStore success is a by-product of years of research on its own iTunes store.  Google has never run a consumer app store. It has failed to create a single comprehensive app store on Android.  Apps are delivered from a number of sources (ie Verizon) and are not controlled.  Therefore, Google cannot verify each app’s credibility nor even ensure new apps wont corrupt one’s phone.  Why will people download apps they don’t trust?

Apple strength is user experience.  Google’s strength will have to be monetization if it is to be successful.  RIM’s only competitive advantage is security.

BUT, as Mark Zuckerberg claims, privacy is no longer the social norm. Consumers simply do not value security.  Information about my browsing or third party apps does not need to be protected more than it already is on iOS/Android.   RIM adds nothing to the web or app experience.  As explained earlier, the vast majority of a consumers time is spent on the web or within an app.  RIM cannot compete and should stop investing in consumer products.

RIM is not doomed though.  There exists a huge market of individuals who care deeply about security and do not value the web or app experience: Enterprise users.  The company is better positioned to leverage its experience in the business world than any of the other major players – hands down.

So here is my recommendation to RIM: stop trying to broaden its customer base through investments in consumer facing “App World” features, etc.  Instead, horizontally diversify across more business products.  A iPad like tablet is a great place to start.   iPads are a common site at conferences and in business meetings.  RIM is capable of developing a device that excels over the iPad in productivity and security.

Tablets are useful for business.  A BlackberryPad can win.  Enterprise users need more security and productivity than the iPad currently offers.  RIM offers complete end-to-end solutions that allow IT departments to control data more securely over private servers.

Apple already offers great consumer feature sets.  It will try to improve its enterprise offering.  RIM will struggle to capture consumers, but it is very well positioned leverage its core competency to excel over Apple in business.

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