In a move to secure fraying market share against their bourgeoning competitors, RIM and Microsoft are partnering. Microsoft CEO Steve Ballmer made a surprise keynote earlier Tuesday at the Blackberry World expo in Orlando, Fla. Microsoft will integrate its Bing search and map application at the device operating system level, he said. "We're going to invest uniquely into the BlackBerry platform."
The announcement comes on the heels of RIM's announcements of new BlackBerry phones, an operating system, and other features, as the company tries to pry back market share from Apple and the makers of Android phones.
A recent report by media research company Nielsen found that 31 percent of consumers plan to buy an Android-based smartphone in the next year, with 30 percent planning to buy an Apple iPhone. Only 11 percent said they expected to buy a BlackBerry, and 7 percent said they would buy a Microsoft Windows Phone 7 device.
These numbers aren't great for either Microsoft or RIM--and are clearly bad enough to make the competitors put aside their differences to try to help each other.
The integration will allow RIM to focus on its core competencies, rather than developing search and map features--or sending its users over to Google, which builds the Android platform.
For Microsoft, the deal represents one more platform for Bing to live on. Earlier this year, Microsoft struck a deal with Nokia, which includes a set of phones developed in partnership and due to ship in 2012.
For the first time this year, sales of smartphones outpace those of regular mobile phones, with 54 percent of U.S. consumers opting for a smartphone. While this is great news for all smartphone manufacturers--not to mention carriers who can charge more for data plans--overall market share has been consolidating towards Android-based phones and the iPhone.
As competition heats up for larger shares of this growing pie, the RIM-Microsoft partnership indicates where the industry as a whole may be headed. Gone are the days when a company can test the mobile waters alone with relative success. With consumers quickly developing favorites, it's going to become increasingly difficult to pull people away from their beloved phones.
There are still new users who will make the smartphone upgrade, and malleability for existing smartphone users, but it's going to take real innovation to cajole entrenched users to switch a smartphone OS. We'll have to wait and see if the new partnership will lead to innovation for RIM and Microsoft.
Ilie Mitaru is a culture and business journalist and occasional entrepreneur. He is the founder of an alternative business magazine, Stake, set to launch in June.