How RIM Could Fail

Of the handset choices that are sold broadly on the market, the BlackBerry platform is the most inherently secure. To appeal to the business market it targets, it had to be better than any other handset or mobile solutions vendor. But with Saudi Arabia blocking the service and other countries expected to follow -- coupled with mistakes on its new flagship Blackberry Torch -- RIM could be on the brink of a Palm-like failure.BlackBerry phones, when implemented by companies along with the matched server and software solution, can make use of an encrypted data connection. The keys for the encryption are set and managed by the business client and not RIM, providing a level of security currently unmatched by competitors that RIM itself can't, with reasonable effort, penetrate.

Saudi Arabia and other parts of the world dealing with domestic threats are concerned that this encrypted method of communication can be used by criminal organizations to coordinate criminal and specifically anti-government activities. They want RIM to give them a master key so they can easily decrypt the messages.

However, once the RIM security system is modified to allow for a master key, the potential for misuse eliminates much of the benefit to encryption because this master key could be duplicated, stolen, or misused. Short of some kind of quantum technology, which would alert when unauthorized access occurred, the benefits of the RIM security would largely be eliminated.

Removing that benefit would allow third parties to better secure computing platforms like the iPhone and Android, giving them the security advantage along with existing advantages in terms of hardware choice and application depth. This would eliminate much of the existing RIM advantage.

We just witnessed Palm fail by following the simply strategy of building a good device and following it up with claims that it would kill the iPhone, horrid sampling and press support, and an advertising campaign that was expensive and ineffective.

RIM just launched the BlackBerry Torch, a good device, but they failed to get them to any of the technology news programs I work with and I work with a lot of them (who mostly commented on how much better job Apple does). RIM's executive management positioned the phone as an iPhone killer, which it isn't, and their TV advertising (at least in my region) includes potentially offensive stereotypes of Hispanic people and gay people. Using diversity can be very powerful, but using stereotypes can be incredibly foolish.

When you combine the security problems with their execution issues surrounding the Torch, you potentially have a company at the front end of what could be a cascading failure. Companies move on the decisions of their executive management, good and bad, in this instance RIM appears to be drifting into both new and known areas of trouble and that doesn't bode well for them as a vendor -- particularly in government accounts.

-- Rob Enderle is president and founder of Enderle Group. Special to Dark Reading.