Apple's iPhone now seen as real threat to BlackBerry

Apple Inc.'s move into mobile corporate e-mail with its iPhone is a serious threat to BlackBerry maker Research In Motion Ltd., analysts say.

By Peter Nowak — Apple Inc.'s move into mobile corporate e-mail with its iPhone is a serious threat to BlackBerry maker Research In Motion Ltd., analysts say.

The Cupertino, Calif.-based maker of Macintosh computers and iPod digital music players on Thursday announced it was adding "push" e-mail to its popular iPhone in June. Push e-mail, where messages are automatically sent to the phone, has become popular with business users and is widely credited as the secret behind Waterloo, Ont.-based RIM's success.

Apple is quickly encroaching on RIM's core business, analysts say.

While Apple's move is unlikely to immediately dislodge RIM's tight hold on the business market, which it basically owns, it will limit the BlackBerry's attempts to grow in the consumer market.

"Apple is moving much more aggressively toward RIM's space than RIM is moving toward Apple," said California-based technology consultant Rob Enderle. "It takes away RIM's expansion opportunity, but it doesn't necessarily displace them."

RIM is the device of choice of business users and will likely remain so until Apple can show that the iPhone's push e-mail is as secure as the BlackBerry's.

Apple, however, also on Thursday announced a software development kit for the iPhone that will allow third parties to create applications for the device. A test version of the development kit was made available immediately.

Enderle said e-mail security software is likely to be among the first third-party applications developed for the iPhone, and should be made available by the time the push e-mail feature, which will run over Microsoft Exchange servers, debuts in June.

RIM system problematic: Jobs

Apple chief executive officer Steve Jobs took a shot at RIM's security issues during the announcement on Thursday. 

He said RIM's centralized system was problematic, as was apparent during a failure a few weeks ago that caused a continent-wide outage.

"Every e-mail message that's sent to a RIM device or from a RIM device goes through a [network operations centre] up in Canada,'' Jobs said at a press event at the company's headquarters. "That provides a single point of failure, but also provides a very interesting security situation.''

A spokesperson for RIM said it does not comment on other companies' announcements.

RIM co-chief executive officer Jim Balsillie welcomed the iPhone when it launched last year, saying it would boost the profile of all advanced phones, including the BlackBerry.

Shares of RIM dropped more than three per cent to $97 on the Toronto Stock Exchange on Thursday following Apple's announcement. Shares of the iPhone maker also fell more than three per cent to $120.93 U.S. on the New York Stock Exchange.

RIM has been moving in the opposite direction in coming up with BlackBerry devices that are more appealing to the general consumer market. The company has been adding music players, cameras and GPS features to its BlackBerry in an effort to expand out of its core business-user market.

The company on Thursday also announced it was adding pop artist's Dipdive social networking community to BlackBerry devices.

'There's room for multiple players'

Other analysts sided with Balsillie's sentiment from last year, and said RIM won't be greatly affected by Apple's move into the business market because there is still lots of room for both to grow.

Only about 15 per cent of the cellphones in the United States are smartphones — or phones with enhanced non-voice features — while Canada has only about 12 per cent, according to figures from consumer electronics tracking firm Solutions Research Group.

"Both numbers are going to double or triple in the next five to seven years, so there's room for multiple players," said president Kaan Yigit. "It's fair to say that both Apple and RIM will be the serious contenders.

"Even still, I wouldn't take it lightly because nothing Apple does should be taken lightly, but at the same time there's no reason for panic."

Apple released the iPhone in the United States last June and has since added the U.K., France and Germany, selling a total of four million units. The company has not yet announced official availability of the device in Canada.

The company also announced that venture capital firm Kleiner Perkins will start a $100-million U.S. fund for companies looking to developing applications for the iPhone. Apple will be the exclusive distributor through an online "App Store," where users will be able to buy the programs developed.