Has big business kicked its 'Crackberry' habit?

Once the executive essential, Blackberry is losing out to iPhones
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The Independent Tech

They used to call it the "Crackberry", because executives couldn't tear themselves away from the device.

Now, though, it seems like the Blackberry is losing its addictive powers, and businesses and busy bosses are shopping around for other smartphones – lured, like the rest of us, by the magical properties of Apple's iPhone or other such devices. It is fast adding up to an identity crisis for the Blackberry and, potentially, a major financial problem for Research in Motion (RIM), the Canadian company which makes it.

In a world where every halfway-decent phone on the market can access the internet, Blackberry is starting to look less versatile than the iPhone, with its vast array of applications, or apps, and new devices using Google's increasingly popular operating system, Android. And while global smartphone sales have almost doubled in the past year, Blackberry has taken a reduced share of the market, according to the latest industry figures.

"There is a fundamental shift to a new software paradigm where apps and content have become more important for success in smartphones and tablets, away from hardware alone," Shaw Wu, an industry analyst at Kaufman Bros in San Francisco, said.

Mr Wu has stopped recommending RIM shares to investors, and wrote to clients this week predicting tough times ahead for the company. While Blackberry has been pursuing the consumer market with models such as the Curve and the Bold, and a new operating system that makes for better internet browsing, its competitors have been making headway in the market that first made it famous – business.

The British bank Standard Chartered, which previously required its staff to use Blackberries, earlier this year began picking up the bills for bankers who wanted to use Apple's iPhone instead. The company also began supporting corporate email on the alternative handset.

In the last few days, two more of the world's biggest banks – Citigroup and Bank of America – have been testing software for the iPhone designed to make it secure enough for company messages, a precursor to allowing staff to use the Apple devices. Similar tests are being conducted with smartphones that run Android.

The two banks combined employ more than 500,000 people. It makes sense for employees to be able to try the popular mobile banking apps for smartphones. Apple signalled a major push into the business market when it reported results to Wall Street last month. Four out of five Fortune 500 companies now use Apple products, and the company's finance chief, Peter Oppenheimer, said the next step was to persuade them to use more mobile devices.

According to Gartner, the market research firm, worldwide smartphone sales jumped 96 per cent in the three months to September, compared with the year before. But Blackberry's market share tumbled to 14.8 per cent from 20.7 per cent as Apple sales rose sharply and Android phones surged in availability and popularity.

Google is improving Android all the time. Each version brings new features and polish, and the level of innovation is a major differentiator, Gartner said, while Apple performed extremely well thanks to the introduction of the iPhone 4. The strong ecosystem of apps and music, based around Apple's iTunes and the App Store, helped its shares surpass RIM in the lucrative North American market to put it second behind Android.

"Apple's dramatic expansion of iOS [its operating system] with the iPad and the continuing success of the iPod Touch are important sales achievements in their own right," Carolina Milanesi, a research vice-president at Gartner, said.

"But more importantly they contribute to the strength of Apple's ecosystem and the iPhone in a way that smartphone-only manufacturers cannot compete with."

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