If you speak to RIM investors, there seems to be a lot of them who believe RIM can recover by delivering a strong offering to enterprise customers. I disagree. I'm not saying the enterprise doesn't matter, but I am saying that if BlackBerry is to succeed, it must succeed with consumers first.
But why, exactly, to some folks seem so intent to believe that BlackBerry can recover by dominating the enterprise? It's because of the company's history, and a lack of understanding, by some, on how the market has evolved.
When the BlackBerry solution hit the market in 1999, it was built for the enterprise market. Individual professional consumers could buy it and use the desktop redirector software to transfer desktop emails to the BlackBerry handheld. But the big growth came from BES-connected hardware in larger enterprises.
There was no real consumer market for the product at this point. The BlackBerry wasn't even a phone yet. It was a US / Canada only product running on a specialized packet data network.
By the time RIM launched its consumer offering, BlackBerry Internet Service, complete with webmail and integration with various ISPs directly with RIM's network operations center (NOC), they had amassed about 850,000 enterprise customers. That was 9 long years ago!
Growth in RIM's consumer market was explosive right from the start. This growth came quickly because RIM was signing new carrier deals all over the world, and creating specialized promotions to attack local markets, including Latin America, which is where the company successfully focused much of its effort at the time.
When the iPhone hit the market in 2007, RIM was already in the middle of a massive consumer growth cycle, but its enterprise business was still much bigger than its consumer business. When RIM reported fiscal 2008 year-end numbers (March 2008), they had 9 million enterprise subscribers and only 5.6 million consumer subscribers.
The iPhone wouldn't stop BlackBerry anytime soon. The growth they were experiencing was immense, global, and the sole driving reason for the company's overconfidence. While iPhone consumer price points walked from $599 down to $199 (after subsidies), BlackBerry consumer growth continued.
One year later, based on fiscal 2009 year end numbers, the consumer business had finally taken the lead. RIM had about 13 million BIS subscribers, with a total subscriber base of about 25 million.
The growth of the consumer subscriber base kept outpacing the enterprise side of the business. By February 2010 the consumer subscriber base had more than doubled again, massively overtaking the enterprise customer base.
Today, RIM is still growing its subscriber base in many international markets, while it is losing subscribers in North America. They've stopped reporting the split between enterprise and consumer. But most people who've been following the company as long as I have estimate that the consumer subscriber base makes up 80-90% of the 80 million subscriber base. That's a HUGE chunk.
Most of the media doesn't understand this. If they did, they'd realize just how stupid it sounds to suggest that RIM is giving up on the consumer market. Yet that's exactly the kinds of headlines we saw following RIM's results after Thorsten Heins took over as CEO. He was misquoted, which could only have happened due to a complete lack of understanding, by the media, of the BlackBerry business.
So the countdown to BlackBerry 10 is on. We're excited. It looks sharp. The developer relations team is making real progress. I mean heck, they managed to get Plex to port their awesome media client to Playbook after we slammed them for making BlackBerry the butt of an April Fool's joke. If we can get Netflix, Skype, Instagram and other big name apps at launch, we have a platform consumers will take seriously.
What about enterprise? I am not at all convinced that RIM has their act together here. They talk a good talk about Mobile Fusion, BES 10, and BlackBerry Balance. But I'm not sure they've got the right leadership in place to execute. And as we all know, execution is key.
But it's all secondary to the consumer market. RIM absolutely HAS to convince consumers to want its phones. This is what will inevitably drive the enterprise market to continue to support BlackBerry with the same strength as we've seen over the last decade.