Rosenthal: BlackBerry comeback is a long shot

Upgrade expected this week, but device is overshadowed now by iPhone, Galaxy

CBOE Holdings Chairman and Chief Executive William Brodsky pulled out his chirping smartphone in the middle of a business lunch.

At a table where the preference for Apple iPhones and Samsung Galaxys was evident, Brodsky's BlackBerry was a onetime favorite, no longer a go-to menu item. Brodsky's loyalty notwithstanding, even he would concede he needs more in his mobile diet.

"I'm from the generation where, if it's not broken, you don't get rid of it," said Brodsky, head of the Chicago Board Options Exchange, estimating his device was 3 or 4 years old. "I don't get rid of them unless they break. But I have an iPad. So for me what's worked is to have this and an iPad. Then I have maximum flexibility. But definitely, when I don't have my iPad with me, if I have this alone, I'm missing out."

The BlackBerry is no longer the talisman it once was, something every successful executive (and those aspiring to be) had to have in the arsenal along with a power suit, an MBA and an air of confidence. So BlackBerry parent Research in Motion, or RIM, finds itself at a precipice.

The Canadian company is set to introduce an upgrade this week, aimed at cutting into the consumer business it ceded in the last six years to its rivals. It even has popped for its first-ever Super Bowl ad. Analysts are mixed on whether the upgrade will enable the company to rebound.

Another theory is the chatter generated by the upgrade is the buildup to some kind of sale. The chief financial officer of Lenovo suggested last week in an interview with Bloomberg that the Chinese parent of IBM's personal computer business might be interested in acquiring the struggling company. And RIM's CEO told a German newspaper he might consider selling the hardware division or licensing its proprietary software.

"At this point, it feels like it's an uphill battle to try to get into the general consumer personal-use market now that you have iPhone and Galaxy entrenched in the market, not to mention other players like Motorola and HTC," said David Tan, an assistant professor of strategy at Georgetown University's McDonough School of Business. "For BlackBerry to come in trying to get a piece of that market is going to be very tough."

RIM's dominance among smartphones effectively ended when the 2007 introduction of the iPhone forever changed the expectations of mobile users. Apple left RIM to fend for corporate clients while it played to consumers, many of whom also happened to be businesspeople.

Bedeviled by its lackluster Web browser and a relatively skimpy apps ecosystem, BlackBerry lost much of its global market share. Estimates for 2012, released last week by the research firm IDC, show RIM's share of the worldwide smartphone market was 4.6 percent, well behind Samsung's 30.3 percent and Apple's 19.1 percent.

That said, you can't pry BlackBerrys from the hands of some people in that 4.6 percent, like Brodsky, my wife and, famously, President Barack Obama.

Devotees cite BlackBerry's utility in sending email and texts, and the sensory benefit of an actual QWERTY keyboard (as opposed to a touch screen). Meanwhile, RIM's other greatest asset, the security its enterprise software offered, has ebbed, thanks to advances made by other smartphone-makers and software developers.

"RIM was the last of the hardware manufacturers to take advantage of the fact that the (corporate information technology) department really used to have a lot of say about what hardware was used in the enterprise," said Michael Rogers, who writes The Practical Futurist column for MSNBC. "They were knocked aside by what the IT people called the BYOD movement, or bring your own device. People just started showing up with iPhones and said: 'This is what we're using. You in IT better figure out how to make them secure.' The RIM people did not see that coming."

It's a bad sign when people are willing to shell out their own money just to not have to use BlackBerrys, spurning company-issued smartphones so they can avail themselves of the features and fashion points a device from Apple, Samsung or Google's Chicago-area Motorola Mobility unit might afford.

This is the target of Wednesday's big reveal. RIM has been tight-lipped. But a much-touted new BlackBerry 10 mobile operating system upgrade and new handsets, one with a touch screen and the other with a keypad, reportedly will be unveiled.

"It's a very risky move," Tan said. "You may be giving up your big selling point to the people most likely to use a BlackBerry in order to change yourself into something that might appeal to people who are not currently BlackBerry users."

RIM should probably take it as a compliment that Samsung, which has tended to make fun of Apple and its fans in Galaxy ads, last week introduced a TV commercial touting its suitability for a creative workplace that widened the target to include BlackBerry users. Told they now choose any smartphone they want for work, older employees in the spot cling to their BlackBerrys. Explains one: "I have a system" to carry one phone for business and another for personal matters.

"I am very slow to adapt to new technologies when I have something that's very reliable, and the BlackBerry for me has always been great for emails," said Brodsky, who plans to step aside as CBOE CEO in May, becoming executive chairman. "But more and more I feel the need to at least explore the iPhone because people in my office have made the switch and compatibility of technology usually is a virtue."

That — not the new BlackBerrys — is almost certainly the next upgrade for Brodsky, who fell in with BlackBerry only after enthusiasm waned for the once-popular Palm Treo.

"I have people who will help me transition into new technology," Brodsky said. "Quite frankly, at this point, if I were to go to an upgraded BlackBerry, there are very few people in my office who use it and could help me with it."

As President Obama and his family got settled in the reviewing stand to watch last week's inaugural parade, TV cameras caught the president briefly getting out his BlackBerry. He looked up a couple of times, so he could pose for pictures taken by his daughters … with their iPhones.

Much has been made of the fact Obama is the first sitting U.S. president to carry a BlackBerry.

He might well be the last.

philrosenthal@tribune.com

Twitter @phil_rosenthal

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