Wednesday, October 8, 2008

Finally, a worthy iPhone challenger

In response to T-Mobile’s gPhone and AT&T’s iPhone, Verizon Wireless is getting a bPhone — the new BlackBerry Storm, which was leaked last week and officially announced this morning.

The new BlackBerry 9530 appears to be the flagship smartphone of the world’s largest cellphone carrier, Vodafone, and is being first released by its partly-owned US subsidiary, Verizon Wireless. It melds the traditional BlackBerry features with an iPhone-inspired touch screen interface, showing that Research in Motion is interested in more than just CrackBerry keyboards.

The announcement is interesting on many levels.

First, reviewers are generally calling it the strongest iPhone challenger yet, certainly better than the gPhone (aka T-Mobile G1). As Wired wrote:

To put it mildly, we’ve seen a butt-load of handset makers jump on the iClone bandwagon since Apple’s device was announced in 2007. Without exception, every attempt has failed to come close to matching the iPhone’s nearly mythic combination of intuitive UI, responsive touchscreen, and gorgeous hardware. The Storm, though, gets closer than any device we’ve ever laid hands on.

And in one critical area — you might want to sit down for this — The Storm actually beats the iPhone.
Screenhunter 02 Oct. 06 16.30 270X463The main improvement is ClickThrough, which provides the best tactile feedback yet of any touchscreen phone. The consensus is that this is the one area where it’s clearly better than the iPhone.

Not surprisingly, the Canadian systems innovator is also planning an application store to compete with the iPhone App Store. RIM has had a wide range of 3rd party Java-based applications for years, but is now making these available to users in a more convenient and integrated fashion. The key difference is that the content will be controlled not by RIM, but by the carriers. (No mention of the store is made in the official announcement).

This says some interesting things about competencies. In 2007, Apple releases its first mobile phone and an important new smartphone platform. Through a combination of software, industrial design and PR flair, Apple redefines the mobile phone experience for American cellphone buyers and, to a lesser extent, those in the rest of the world. How do firms respond?
  • Motorola (#1 in the US, #3 in the world) continues to dabble in smartphones with halfhearted efforts using Windows Mobile and Symbian UIQ, but doesn’t aggressively promote any of them. Despite the smartphone challenge, the cellphone division is distracted by its much larger problems, including plummeting market share and a desire of Motorola corporate to jettison the division before it sinks the parent company.
  • Samsung (#2 in the US and the world) and LG (#3 in the US, #5 in the world) — the major suppliers to Verizon Wireless in recent years — have a typical Japanese/Korean response: phones with great hardware, lots of features, and uninspiring software.
  • Nokia (#4 in the US, #1 in the world) add an application (and everything else) store to strengthen its dominance of the European smartphone market, but fails to find a carrier that wants to push its phones in the US. It’s reportedly waiting until next year for a full-on iPhone challenger.
  • RIM (#5 in the US) leverages its handset software, dominant back-office technology and loyal customer base to make the most effective iPhone challenger yet.
  • Google enters the US smartphone market not with a branded cellphone maker, but with HTC, the #1 ODM: its G1 falls somewhat shy of the mark.
In other words, it’s not surprising that RIM has a strong product and Motorola, Samsung, LG and newcomer Google do not. The only surprise here is that Nokia has been unable (or uninterested) in making a compelling product for the US. Given its weak CDMA products — foreclosing a deal with the #2 or #3 carriers — perhaps the key obstacle is that it has no channel to US consumers other than iPhone dealer AT&T.

The “Storm” actually appears to refer to the BlackBerry 9500 family (cf. Nokia N95?), which includes Vodafone’s BlackBerry 9500 and Verizon’s BlackBerry 9530. I’m guessing that Vodafone will be selling different models. Vodafone was once interested in commoditizing handsets to avoid commoditizing its pipes. The announcement suggests Vodafone’s tacit admission that handsets are not going to be commodities any time soon.

Other things don’t change. While it has a brand new phone, Verizon Wireless continues its policy of tightly controlling subscriber access to 3rd party applications — either you’re “on deck” or not at all — a control ceded by AT&T to Apple (with the iPhone App Store) and abandoned by T-Mobile USA. The 9530 is also one of the few smartphones in years to come without Wi-Fi support, allowing bypass of the CDMA network at Starbucks or the office.

The 9530 is a fully dual-mode 3G phone that works on Verizon’s EV-DO network and in the W-CDMA technology used in Europe and elsewhere in the world. Is it that Verizon is tired of AT&T’s obnoxious ads about implausibly globe-trotting teens with no bars? Is it that the high-end BlackBerry users fit the actual profile of a globe-trotting executive? Or is it that BlackBerrry has a long relationship with Qualcomm (supplier of the chips for Verizon’s previous dual-mode BlackBerry)?

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