Fool on Call: How Apple iPhone Helps BlackBerryhttp://www.fool.com/investing/general/2007/07/06/fool-on-call-how-apple-iphone-helps-blackberry.aspx Jeremy MacNealy
July 6, 2007
"Human sacrifice! Dogs and cats living together! Mass hysteria!"
But the gang at RIM didn't come anywhere near the level of concern expressed by Dr. Venkman (Bill Murray) in Ghostbusters in the company's latest quarterly earnings conference call. Let's take a look at why.
In the spirit of "coopetition"
There has been a term coined for this kind of cooperation between two fiercely competitive companies: "coopetition." Adam Brandenburger and Barry Nalebuff in a 1995 Harvard Business Review article "The Right Game: Use Game Theory to Shape Strategy," explain the term as "looking for win-win as well as win-lose opportunities." The people at RIM currently see Apple's iPhone as a win-win for both companies.
The second question asked during RIM's latest earnings call was the big question: The analyst wanted to know how the management at BlackBerry's company viewed the potential impact of Apple's iPhone and its relationship with AT&T's (NYSE: T ) Cingular Wireless.
This was RIM CEO Jim Balsille's response:
"I think they [Apple] did us a great favor because they drove attention to the converged appliance base [smartphones, PDAs, etc.], and particularly that you should expect media as a soft wrap on your converged smartphone, which we built clear market leadership in. ... We think the attention to it [iPhone] is, and its impact on the dynamic has, quite frankly, been overwhelmingly positive to our business."
That all sounds nice and chummy, doesn't it? Well, there is good reason for management's optimism, and it has just a little more to do than the positive attention coming to BlackBerry via the iPhone. The folks at RIM feel somewhat comfortable right now because the iPhone is a very limited launch at this point. Again, Balsille explains:
"iPhone is launching, to the best of my knowledge, in one carrier and one country. And we're in about 100 countries and 300 carriers, so to the extent there is interest there, there are another 99 countries that are interested in these kinds of things."
We learned in the call that BlackBerry also is now being offered to corporate customers in key Chinese cities like Beijing, Shanghai, and Guangzhou. Additionally, several carriers in Latin America are now offering the Pearl in all three color variations. And the Pearl has seen "excellent" growth in India. Finally, the list of international carriers continues to grow by the quarter. The latest additions include Maroc Telecom in Morocco, Globul in Bulgaria, Millicom in Latin America, and Handcell in Uruguay.
I get Balsille's point, but I am not sure I am totally convinced that this will end up being a win-win for both companies. It is true that the iPhone is attracting an enormous amount of attention, as far as I can see however, that attention is being directed at the iPhone only. Like Apple's latest move to bring the iMac to Best Buy and the threat this agreement presents to Hewlett-Packard and other computer man