John Paczkowski

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BlackBerry’s Grip Slips as Enterprises Loosen Up

blackberry_squeezeResearch in Motion’s strength has long been in the enterprise market, which favors the BlackBerry for its robust security and data-management features. But that may be changing, according to some dismal prognostications from Bernstein analyst Pierre Ferragu. RIM’s outlook in the corporate sector is a “scary” one, he says, imperiled by the saturation of the enterprise email market and the proliferation of alternative mobile platforms like Apple’s (APPL) iOS and Google’s (GOOG) Android.

“The market for corporate mobile e-mail is highly penetrated and saturated outside of SMEs (Small and Medium Enterprises),” Ferragu wrote in a note to clients. “Growth in the number of companies using mobile e-mail will be limited to the SME market, in which RIM (RIMM) is likely to suffer the most from competition. If there is still some growth in the number of users at companies already using mobile email, it is limited and we suspect it will turn into negligible value growth as it will go along with significant ASP decline.”

A significant threat, and not the only one RIM is facing these days. With the iPhone and a growing procession of Android handsets making inroads into enterprise, the BlackBerry’s footing in what was once its stronghold is being eroded.

“… Despite the company’s overall dominance of the segment…74 percent of companies with mobile e-mail have already adopted alternative platforms, including the iPhone and Android,” Ferragu explains. This phenomenon is very new: Almost all these companies “opened-up” their systems in the last two years, half of them in the last 12 months. “We expect these companies to progressively ramp up the installed base of non-Blackberry solutions and therefore expect increased pressure on RIM’s performance.”

If that’s truly the case, what can RIM do to dig in and hold its position?

Not much, says Ferragu. Ultimately, people want to use their personal smartphone at work and their first choice isn’t always the BlackBerry.

“Enterprise satisfaction with RIM solutions is very high, and most managers surveyed said that they expected BlackBerry products to remain innovative and competitively featured,” he writes. “The issue boils down to cost and consumer preferences: employees want to be able to use their own phone, and allowing them to do so presents IT & Telecom managers with a way to substantially cut their operating costs.”

In other words, employees who switch to a non-BlackBerry smartphone save their employer money. And that’s a compelling proposition, as the graph below shows. Among BlackBerry-exclusive companies, BlackBerry-nonexclusive companies and companies with BlackBerry support, 50 percent said they would consider eliminating their BlackBerry solution.