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TheStreet Open House

RIM's (Latest) Critical Mistake

Stocks in this article: RIMM GOOG MSFT AAPL AMZN VZ T

NEW YORK ( TheStreet) -- Earlier this week, journalists attending Research in Motion's (RIMM) annual developer conference for BlackBerry had a chance to play with the latest build of BlackBerry 10, which is set to be released in the first quarter of 2013, after at least a one-year delay. The product shows good promise, but it's way too early to draw any conclusions given that the product was simply not close to finished yet.

The upside scenario for RIM is that BlackBerry 10 bests Android from Google (GOOG), iOS from Apple (AAPL - Get Report) and Windows 8 from Microsoft (MSFT - Get Report) in terms of offering a better user interface paradigm, especially for workers focusing on productivity.

Conceptually, in my view, Google may be ahead of Microsoft, which may in turn be ahead of Apple. But there is still room to improve the smartphone user interface.

The hurdles facing RIM in this challenge are dramatically high. In particular, there are two hurdles:

1. For RIM, it's probably not enough to be equal to Apple, Google and Microsoft -- or even to deliver something that is only slightly better. The ecosystem lock-in is significant -- in particular considering the installed smartphone user bases of Apple and Google right now -- and RIM isn't offering many of the other components of the cloud services.

2. It's not just about the handheld device anymore. For example, Google has the best maps, Google Voice, Gmail, Drive, Google+, Calendar, a line of PCs (Chromebooks), Reader, a search engine, YouTube, Finance and more. Apple has iTunes, iCloud, PCs (Macs), Apple TV and media players (iPods). Microsoft has PCs, the xBox, Office, Hotmail and more. RIM has . . . a smartphone and a tablet.

With all of these odds against it, RIM cannot make a critical mistake in launching BlackBerry 10. Remember that RIM made at least three critical mistakes in the past four years:

1. RIM launched otherwise decent devices (for its time) such as the Curve 8900, which you could only buy on two-year carrier contracts. However, the trackball (thumb navigation) had a tendency to fail after about a year or so, plus or minus, and after one year you no longer had a warranty. Users were then faced with having to buy a new device for $500 or so in order to live out their two-year contracts. This made many users angry, and they switched to iPhone and never looked back.

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