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BlackBerry, once king of corporate IT, now in decline

Blackberry manJust days after Research In Motion released an anticipated 2.0 software update for its BlackBerry PlayBook tablet, the Canadian company is seeing its once lauded corporate IT prospects declining steeply. A new report by IT industry research firm InformationWeek announced today that just 7 percent of IT administrators plan on increasing their use of RIM products in the future. The report surveyed over 530 technology professionals, and the statistics — although grave for RIM — are nevertheless unsurprising.

Just a few short years ago, the BlackBerry was considered the lynchpin of corporate IT policy. RIM’s revolutionary mobile phone allowed secure and reliable email communication, coupled with a supremely usable physical keyboard — a combination business users found intoxicating. Even as recently as 2010, BlackBerry handheld use was still growing by more than 46 percent year over year. In fact at the beginning of that year, five of the top ten selling smart phones in America were BlackBerries. Of course, a lot has changed since then — Android, Google’s mobile OS, which is free for phone makers to run on their devices — has proved to be an unbridled success. It now accounts for almost 50 percent of the mobile market, with an estimated 400,000 device activations per day. And Apple’s iPhone, well, suffice it to say that if a single device is responsible for an estimated $9 billion profit in the last quarter alone, it doesn’t leave much room for competition.

Which is entirely the point; over the previous two years, RIM had allowed itself to become increasingly complacent to the demands of mobile consumers, digging in its heels and instead relying on vast corporate contracts to sustain the BlackBerry franchise. However, as smartphone use has gained prevalence in this country, a fundamental change has begun to affect RIM’s bottom-line: consumers, as opposed to corporate IT departments, now dictate which devices drive business use, and not the other way around. By shutting RIM out of the consumer game, Apple and Android have forced IT departments to adapt to their platforms. The numbers speak for themselves: The study found that 67 percent of respondents consider Apple a strategic partner for enterprise mobility, compared with 36% citing RIM and 38% citing Microsoft, according to the press release. It goes on to state that, “While BlackBerry represents a median of 70% of company-purchased smartphones in use now, that percentage plummets to 25% when respondents look ahead 24 months.” Recently, RIM has also lost valuable government contracts, once a mainstay of its business, as even federal agencies have become cowed to Android and iOS’s popularity. In a changing world in which 52 percent of businesses allow employees to BYOD (bring your own device), it is the typical consumer, and not the IT administrator, who BlackBerry must now woo.

The news isn’t all bad, however: 46 percent of respondents expressed that it was the poor leadership of RIM’s former co-CEOs that has lead to the current state of the BlackBerry. With some luck and much innovation, RIM’s new chief executive, Thorsten Heins, may have a shot at turning the ship around. The new BlackBerry 10 operating system is just around the corner, and with phones that — while not wholly original — still look promising, RIM may have a final chance to redeem itself in the eyes of the consumers it must now win over. Hey, it sort of reminds us of another highly innovative company that almost went bankrupt before reversing its fate: Apple. That company is now the most valuable in the world. For RIM, only time will tell.

Image Credit: BGR