Research In Motion turns to Microsoft to attempt to make an impact on the mobile maps and search business.
BlackBerry maker Research In Motion (RIM) is to make Microsoft’s Bing search engine the default option on its future devices, signalling a win for the software giant while giving the Canadian company a toehold in the mobile maps and search business.
The announcement came at RIM’s BlackBerry World conference in Orlando, Florida and has won approval from analysts. Steve Ballmer, Microsoft’s chief executive, said Bing would be “deeply integrated at the BlackBerry operating system level” on RIM’s new smartphones”.
The move could be interpreted as a sign of strength or of weakness on both sides. RIM’s financial results show it is shipping a growing number of handsets, reaching 14.9m in its fiscal quarter from December to February, and has around 55m users. But it warned at the end of April it will miss profit forecasts for the current quarter because mobile carriers are forcing it to lower prices for its handsets. And analysis of its figures show more and more of its handsets are bought as replacements by existing users, rather than users who are new to the platform.
Microsoft similarly is struggling in search, where the division that holds Bing has lost bn (£4.84bn) over the past five years, including a loss of 6m in the first quarter of this year. It also has a tiny fraction of the world search market and of the mobile search market, where it is installed on only about 2m smartphones. However that is expected to grow dramatically once its Windows Phone software becomes the default on Nokia’s smartphones, expected to be after October this year.
Analysts thought the deal was probably positive.
“Microsoft is suddenly gaining some considerable traction in mobile as the industry seeks to counter Google’s growing dominance,” said CCS Insight analyst Geoff Blaber, who reckoned RIM had shrewdly gained a foothold in mapping and search without investing directly.
IDC analyst Al Hilwa remarked that “the mobile wars will bring strange bedfellows together”.
RIM is also working on a close partnership with Adobe Systems to sketch out a strategy of cooperation in a mobile market dominated for revenues and search by Apple – which is the world’s largest mobile maker by revenue, despite only shipping 18m phones in the past quarter – and Google, whose Android OS is the most-used in smartphones.
RIM is eager to set its PlayBook tablet apart from Apple’s iPad, and has long stressed its ability to handle Adobe’s Flash software, a prevalent format for online video and other content. The iPad does not support Flash, but can play video from sites such as YouTube and the BBC iPlayer, which provide alternative video formats.
RIM used the event to show off the integrated email and calendar software, as well as Android app support that it will add to the PlayBook in coming months.
RIM’s co-chief executive Mike Lazaridis, in a joint interview with Adobe head Shantanu Narayen, said publishers had long worked with Adobe and were reluctant to give up control, a complaint often thrown at Apple.
“The publishers want to be in control of their destiny, their business, their content,” he said. “I don’t think they are willing to be hijacked in the way the music industry was before,” Lazaridis told a small group of reporters after his keynote speech.
During the speech Lazaridis said RIM would give out more than 6,000 PlayBook tablet computers to participants at the Orlando conference, and that the device would soon feature the popular Angry Birds game.
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