An unlikely speaker took the stage Tuesday morning at Research In Motion’s (s rimm)BlackBerry World event in the form of Microsoft CEO(s msft) Steve Ballmer. Following news and demonstrations of the latest BlackBerry Bold handsets, Ballmer was introduced and shared details on a new partnership between Microsoft and RIM. Bing will now be integrated into the BlackBerry operating system as the default engine for maps and search. Can you say BingBerry?
This strategy illustrates that the mobile market is entering a bit of a new phase that focuses on feature consolidation and “co-opetition.” From 2007 until recently, smartphone maturity centered around new platforms, user interfaces and the emergence of the mobile app economy. Apps will continue to see growth as 44 billion mobile app downloads are expected by 2016, and that economy is helping to drive which smartphones consumers are choosing. Hardware specifications and features are still important, but so too are platform usability and what apps are available. Both Microsoft and RIM are making strides in this area, but they’re still taking a back seat to the app stores for iOS (s aapl) and Android (s goog) devices.
Platforms and user interfaces aren’t showing that much more room for growth when compared to the mobile app aspect, however, because most of the disruption has already taken place. Aside from RIM’s QNX platform for the PlayBook and HP’s refresh of webOS coming soon, there’s little need for another major mobile platform and ecosystem. That doesn’t mean there isn’t room for these two late-comers: I find quite a bit to like on the QNX-powered PlayBook tablet and HP’s TouchPad is looking fantastic as well. Had these two devices launched closer to the initial iPad debut last April, we might today be talking about a more even split of tablet market share. That didn’t happen and at this point, some may feel there isn’t a need for either of these in the market, although I think the landscape can bear four or five major players.
But all of these companies are playing catch-up to Apple and Google. And that leads to a consolidation phase where less popular platforms such as QNX, webOS and Windows Phone 7 have to find ways to attract consumers and enterprises alike. Here in the U.S., that window of opportunity is fast closing, as 54 percent of handsets sold in the last quarter were smartphones, according to the NPD Group. That means these folks have already picked their platform. Can they change from an iOS or Android device to something from Microsoft, RIM or HP (s hpq)? Of course they can, but the investment in mobile apps has a lock-in cost that can create a barrier to switching platforms.
As a hedge against weakness in native mobile platforms, a consolidation of services is underway. Need a recent example? Nokia’s (s nok) decision in February to drop Symbian in favor of Windows Phone 7 may have kicked off this new phase. And today we have two of the biggest competitors in the mobile enterprise space forming a loose alliance. Bing fends off BlackBerry’s need for Google’s search and map features, while Microsoft gains a greater number of eyeballs on its mobile Bing property since BlackBerry phones handily outsell those that use Microsoft’s mobile operating system.
By banding together, these companies stand to gain quite a bit. Leveraging Bing, for example, means RIM doesn’t have to devote resources to search efforts and can instead leverage a solid service from Microsoft. That could lead to more R&D dollars for RIM to improve its devices and software, or perhaps even speed up the transition from BlackBerry OS to QNX on handsets. RIM could have used Google for search, but that only provides more revenue for Google to invest in making Android better. Besides, RIM is already leaning on Android to make up for a shortfall of apps for its PlayBook tablet: An app player will allow PlayBook owners to run Android software on RIM’s tablet.
Because of Apple’s and Google’s first mover advantage , I think we’ll see more loose alliances between the rest of the pack. After all, the concept that “the enemy of my enemy can be my friend” is a powerful tool when you’re outnumbered and running low on ammo.