As BlackBerry maker Research in Motion strives to revitalize its dwindling brand, would a revolutionary payments innovation be the key to regaining its former glory?
According to research firm Gartner, global market share of RiM's smartphone operating system has been on a near-steady decline from 20.6% in the first quarter of 2009 to just 5.3% in 3Q12. Meanwhile, Android market share has been on a steady rise, growing from a mere 1.6% in 1Q09 to 72.4% in 3Q12. And after peaking at 23.8% in 4Q11, iOS market share has declined to 13.9% in 3Q12.
Coming to market with a platform that's packed with clear differentiators capable of disrupting contemporary smartphone conventions could set RiM on the path to recovery. But if BlackBerry 10 fails to provide meaningful innovations that reinvigorate the maligned brand, then the "CrackBerry," as its once-addicted fan base lovingly referred to their devices, will find itself in the annals of mobile nostalgia, nestled between memories of the Palm Treo and the Motorola DynaTAC made famous by Zack Morris and Gordon Gekko.
The BlackBerry 10 launch is a seminal moment for RiM because it has to find a way for its products to stand out in a crowded mobile field. Innovating in mobile payments is the path of least resistance—and RiM’s best bet—to claw its way out of obscurity.
According to multiple reports, RiM already has plans to introduce a peer-to-peer money transfer service in Indonesia that's based on its BlackBerry Messenger app and will be called BBM Money.
RiM was also an early Near Field Communication adopter and many devices in its current lineup of contain NFC chips. Signs point to the technology being included in the new devices powered by BlackBerry 10. RiM also has existing mobile payments relationships with companies like the Canadian Imperial Bank of Commerce, which offers a mobile wallet on the BlackBerry App World store, and MasterCard, which included support for BlackBerry devices when it launched a software development kit for its PayPass mobile app.
But why payments? Because RiM's rivals are already differentiating their systems in other ways.
Android has scale by virtue of the dozen or so manufacturers deploying the platform on their smartphones and tablets. And Apple has so far dominated the tablet market with the iPad, while iTunes has long kept it firmly among the content heavy hitters. Its success in mobile affords Apple a balance sheet capable of dominating supply chains and consumer brand recognition with a mere twitch of its corporate muscles.
And the sheer volume of apps available for Android and iOS devices are a strength not easily overcome by rivals like Microsoft and RiM. Microsoft’s new Windows 8 operating system utilizes a common platform that can be configured for desktop, smartphone and tablet devices. The company, which is in a stronger financial position than RiM to muscle its way into the app conversation, is attempting to portray itself as an attractive option for developers that want to expand their reach with common apps.
Sure, the big mobile players have all dabbled in payments technologies. In June, well ahead of the launch of its new Windows Phone 8 line, Microsoft revealed that its phones would support NFC-based payments—a feature still lacking from Apple handsets. Android handsets, meanwhile, support the Google Wallet and Isis payment systems, but on just a fraction of the many Android phone models available.
Simply put: no one has fully solved the mobile-payments puzzle.
When Apple chose to leave NFC capability out of the iPhone 5, it opened the door for rivals to emphasize the technology in their own devices. Rivals have made efforts to promote NFC, but they typically fail to connect with consumers about the benefits of mobile payments.
For example, in promoting the NFC capability of the its Galaxy S III smartphone, Samsung's marketing campaign includes a commercial where a father on his way to a business trip gets a video to watch on the plane from his children—and a risqué video he shouldn't watch on the plane from his wife. It next released a holiday-themed spot that replaces the kids with elves and has Santa and Mrs. Claus filling in the role of husband and wife.