RIM's Last Stand: the U.S. Government

A blog about business and economics.
Oct. 16 2012 9:47 AM

RIM's Last Stand: the U.S. Government

I recently found myself at a table where I was the only person carrying an iPhone, and my companions weren't using Android and they weren't rolling smartphoneless to avoid the high price of data plans. They all had BlackBerries, partying like it's 2008. And then I remembered—they were all federal employees.

Nicole Perlroth profiles some of the other BlackBerry dead-enders:

Mr. Fenton said he could not wrap his head around iPhone fever. “I constantly ask people, ‘What is so great about it?’ and they have these nonsensical answers,” he said. “Someone told me I’m missing out on some app that maps their ski runs. I ski four days a year. On the road, I don’t need a ski app.”

And, obviously, you don't need a ski app. But why not have one? The retreat of RIM into IT departments and especially government IT departments is a pretty telling story. The genius of selling to an enterprise market is that you don't particularly need to make products that customers enjoy. Your products just need to meet a standard of adequecy (you don't need a ski app) and to be offered at a reasonable price. And once you've already got a client signed up, the tendency is going to be for them to want to avoid switching since learning to support a new device is a hassle. The issue is that once the CEO or a few other high ranking executives decide that they, personally, would like a Galaxy S III or an iPhone 5 then ultimately the corporate culture has to change.

But the federal government—the biggest employer in the country—doesn't work like that:

Goldman Sachs recently gave its employees the option to use an iPhone. Covington & Burling, a major law firm, did the same at the urging of associates. Even the White House, which used the BlackBerry for security reasons, recently started supporting the iPhone. (Some staff members suspect that decision was influenced by President Obama, who now prefers his iPad for national security briefings. A spokesman for the White House declined to comment.)

The president likes iOS so the White House needs to start supporting iPhones. But the Executive Office of the president is only a small sliver of federal employment, and these kind of decisions are done on an agency-by-agency basis. And while "CEO so-and-so tells her IT department to start supporting cutting edge phones" sounds like good sense, "Secretary so-and-so wastes taxpayer money upgrading her smartphone" is a potential subject of congressional hearings. So even as the world's two leading smartphone OSes are made by iconic American tech companies, the federal government is by and large committed to what now amounts to an off-brand Canadian alternative.


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