Special report: A PlayBook for fighting Apple
(Reuters) - Once upon a time, BlackBerry was king. Then came the iPhone, followed by Android. And BlackBerry seemingly lost its way — if not quite its throne. — Research In Motion is holding on to profit growth and impressive margins.
Context & Ripple Effects
By early 2011, BlackBerry's decade as the default corporate handset had been broken open by two arrivals — the iPhone and then Android — yet Research In Motion enters this fight from an unusual position: per Reuters' special report, the company is still posting profit growth and impressive margins even as its market dominance erodes.
That cushion is what makes the PlayBook matter. The tablet is RIM's chosen instrument for taking the offensive against Apple rather than merely defending its phone franchise, and the report frames it explicitly as a 'PlayBook for fighting Apple' — a bet that a second product category can restore the momentum the iPhone took away.
First-order effects
- Research In Motion commits its balance sheet to a direct head-to-head with Apple's iPad, spending against its own profitable phone business at exactly the moment competitors are pressing hardest on the handset side.
- Apple now faces a challenger whose pitch is enterprise credibility and differentiation rather than imitation — a competitor with cash flow to sustain a multi-year fight.
Second-order effects
- With Android already occupying the volume end of the market, RIM's move forces a three-way contest for developers and carrier shelf space, where each new entrant raises the cost of staying visible for the other two.
- If PlayBook investment dilutes the margins funding it, RIM faces the classic incumbent's dilemma: defend the profitable core or chase the growth category, with limited capacity to do both well.
Third-order effects
- If the pattern holds, the industry's center of gravity shifts further from handset unit share toward platform ecosystems — meaning device makers with strong current margins but thinner app ecosystems, like RIM in 2011, compete against rivals whose profitability compounds through software and services rather than hardware alone.
The trend: Mobile computing is shifting the basis of competition from handset market share to controlled platform ecosystems, forcing still-profitable incumbents like RIM to buy their way back into relevance through new product categories such as the PlayBook.