RIM's Secret Weapon

RIM's Secret Weapon

It's a balmy March afternoon in Toronto and Emma Brun-Hayne is lounging with two friends in Yonge-Dundas Square, the city's ad-plastered shrine to commercialism. She talks loudly over the din of a nearby street performer's drum solo while her turquoise-coloured fingernail traces the touchscreen of her new BlackBerry Torch smartphone, in constant search of updates from friends. While teenagers are known for their dramatics, one can't help but take Brun-Hayne, 19, at her word when she professes her love for the wireless device. "Without my BlackBerry," she says, "my life would be over."

In the age of the iPhone and a host of Google-powered phones with cool names like Galaxy and Nexus One, it might seem unusual for someone like Brun-Hayne to be so over the moon about a BlackBerry. After all, it's the same wireless device that an army of Bay Street bankers and lawyers have clipped to their hips just a few blocks away. But what's good for the suits - a no-nonsense keyboard suitable for typing corporate emails - also happens to be just the thing for teens' and tweens' favourite mobile pastime: sending text messages. Thousands of them.

Or, in the case of BlackBerry, instant messages. There's a difference. RESEARCH IN MOTION Ltd. originally developed BlackBerry Messenger, or BBM, so employees could chat in real time, but it has since morphed into a powerful social networking tool. And some observers argue the feature, despite having roots in 1990s desktop chat tools like ICQ and MSN Messenger, may actually hold the key to RIM's future success as it fights an increasingly pitched battle with rivals Apple Inc. and Google Inc. "As BBM goes, so goes RIM," says Kevin Restivo, a senior analyst at research firm IDC Canada. "I'd argue it's as important to RIM's future as wireless email, which is, of course, the 'killer app' RIM used to become a tier-one supplier of smartphones."

The unexpected mainstream popularity of BBM hasn't gone unnoticed by RIM, which has been slowly losing ground to competitors - particularly in the consumer segment. So while rival smartphone makers are selling users on games, Web browsing and music, RIM is continuing to position the BlackBerry as a communications tool first and foremost. "People's inherent need to communicate doesn't change," says Hossam Bahlool, RIM's director of platform product management. "That's why RIM is focusing a lot on BBM. It's meeting the needs of users and what they want to do."

But while BBM may now be a big selling point, it wasn't always that way. Bahlool says the application grew out of a device-to-device messaging system used mainly by IT staff. RIM later added an instant messaging application. Today, BBM boasts more than 35 million users, with an additional 1.5 million being added every month. Which is why most of RIM's advertising features BBM prominently. And it's a savvy pitch - texting is still the most commonly used feature on smartphones.

That's particularly the case among teens, who are by far the biggest users of smartphones, according to research by Nielsen Company. Nielsen found that teenagers send an average of 3,339 texts a month, which is roughly six per every hour that they're awake. By far the biggest users are teen girls, who send and receive an average of 4,050 texts a month. That's roughly 135 text messages a day. "The prime directive of a teen is to be available for chat and text at all times," says Kaan Yigit, the president of Solutions Research Group. He says that in Canada the BlackBerry is the smartphone of choice among teens, particularly girls, and accounts for about 40 per cent of the market, although the iPhone is gaining fast with a 32 per cent share among the same age group. As a result, many carriers now offer BlackBerry plans targeting young people that come with little or no wireless data - meaning no Web browsing and no email. "Messaging and social networking are two things the youth market really looks for," says Robert Blumenthal, the president of Virgin Mobile Canada, which is owned by Bell Canada.

The challenge for RIM is that there's no shortage of ways for smartphone users to keep in touch with each other these days, including text messages, emails, Facebook status updates and Twitter - never mind actually putting your phone up to your ear and placing a call. But fans of BBM, particularly teenagers, say the difference is in the details. For one thing, BBM is essentially free for BlackBerry users (who must exchange their device's PINs before they can chat) since it uses a relatively small amount of data, whereas text messages can cost money if you don't have the right monthly package. And message recipients don't show up as a long list of phone numbers on your monthly bills, which can be a plus if you are part of a family plan that's being administered by your parents.

But perhaps the biggest draw comes from BBM's unique form of instant feedback. Users can see when their messages, which can include photos and other multimedia files, have been delivered and read by others, and it tells you when they are typing a response. The feature resonates with a young, plugged-in crowd that views email as a glacial way to communicate. "It's waa-ay better than texting," fawns Jaymie Zweig, 18, a friend of Brun-Hayne's who sports a BlackBerry Pearl Flip. "You can see when people are ignoring you."

For RIM, though, the path forward isn't entirely clear when it comes to capitalizing on BBM's popularity. It recently opened up BBM's software to developers in the hopes that they will create new features and functions, hoping to further boost BBM's cachet. But while the move may help prevent existing BlackBerry users from switching to competitors, it's not clear whether it will do much to woo new subscribers. "I think RIM is going hard at this now," Yigit says. "It's a differentiator, yes, but apps that mimic the functionality are appearing for other smartphones." Two of the better-known ones are WhatsApp and PingChat! - both of which are available for BlackBerry, iPhone and Android-powered phones.

Another rival service recently popped up in RIM's backyard. Ted Livingston, a University of Waterloo graduate and a former RIM employee, released the Kik messenger service late last year. Boasting similar functions to BBM, Kik was made available to smartphone users on multiple platforms and amassed more than one million users in just 15 days. But Kik's party didn't last long. RIM launched a patent infringement lawsuit against Kik in late November and shut down the service for BlackBerry users (though it's still available for the iPhone and Android). Livingston declined to comment when reached by Maclean's. Marisa Conway, a RIM spokesperson, said it was company policy not to comment on litigation.

While RIM vigorously defends its turf, there are reports that it may also be planning an offensive push into its rivals' territory. Tech website Boy Genius Report recently cited sources who claimed RIM is planning a stripped-down version of BBM for iPhone and Android-powered devices. The idea, presumably, is to own the instant-messaging space while attracting users of rival devices to the BlackBerry, where they can enjoy the full BBM experience. Conway declined to comment on the rumours.

Admittedly, it seems like a long shot in such a competitive market, but if teens like Brun-Hayne and Zweig are any indication, it just might work. "It's great because it's like a real conversation," Zweig says as she flips open her BlackBerry's keyboard and begins typing another instant message. "Plus, I can't text on an iPhone."

All thumbs

Text messaging is the number one feature used on smartphones, and no one texts more than teens, making them an attractive market

4050 texts per month teenage girls ages 13-17

3339 texts per month teenagers* ages 13-17

2539 texts per month teenage boys ages 13-17

1630 texts per month young adults*ages 18-24

* Average of both male and female

Maclean's April 4, 2011