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Pre-BlackBerry 10 Jitters

Stocks in this article: RIMM

These are the kinds of companies that are in your mental picture of a typical 2009 or newer Silicon Valley startup. They don't even bother securing much. Workers may spend more time at Philz Coffee around the corner than in the office upstairs. It's one big college dorm.

(2) Larger and older organizations, such as the proverbial Wall Street bank and the Department of Defense, still care as much about security as ever. Their new challenge is that some people wanted to use iPhone and iPad. A market grew up in the last few years offering alternative security and encryption to these organizations.

RIM will argue until it's blue in the face that it remains better than all of these new alternative security and encryption approaches. Fine. It is most likely right about this, but the cracks in the Hoover Dam have already spread. Where iPhone and iPad took root, they aren't ceding that back to BlackBerry.

So now we are on the cusp of BlackBerry 10, launching on Jan. 30 and with devices available for purchase within a couple of months or so after that. Now what?

One thing I pointed out in my recent article is that a problem with BlackBerry in the market is it requires a separate kind of data plan. This reduces competition for BlackBerry data service pricing and complicates life for the end user.

To the extent that BlackBerry 10 isn't going to generate this legacy kind of service revenue, it would be a reflection of the lack of need to have such a separate data service plan. This would be a good thing for the end user!

Of course, it's also bad for RIM's service revenue -- at least in this one step -- but my point here is that it is so because RIM's products are now more attractive than before. RIM can then augment its legacy service revenue by breaking out new revenue opportunities with other advantages that build on its network compression and encryption.

For example, RIM could sell separate security, encryption and messaging services to the end-user (individual and enterprise alike) without getting the carriers involved. This has multiple benefits:

  • No splitting the revenue with the carrier.
  • Swifter roll-outs. No need for a carrier to approve.
  • Direct consumer contact. Swift feedback.
  • Granular ability for the user to pick-and-choose what to buy.

This last point is important. Instead of the end-user having to buy a "BlackBerry bundle" of services, it could be an a la carte menu. This allows the end user to not pay for unnecessary stuff, but to see what is actually beneficial.

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