Research In Motion is introducing a software tool that gives corporate customers the option of linking employees' personal iPhones to the BlackBerry network without compromising security.
The move, announced on Tuesday, is RIM's first tangible acknowledgment that it has lost its iron grip on the corporate smartphone market and must accommodate the growing preference of workers for Apple and Google's Android devices. Its battered shares jumped on the announcement.
It's not an admission of guilt - it's a necessary evil, Suquehanna analyst Jeff Fidacaro said.
RIM's Mobile Fusion service is designed to give the Canadian company the leading role in managing corporate communications, whether over the BlackBerry or a rival device.
What our enterprise customers are looking for, and the opportunity for us, is to become the de facto platform, Alan Panezic, RIM's vice-president for enterprise product management, said in an interview ahead of the announcement.
Taking a first, tentative step to offer its network services independently of its own devices, the company could develop a fresh source of revenue to offset a shrinking market share in handsets.
Indeed, success with the strategy could encourage RIM to focus more and more on services rather than devices.
RIM's often-volatile stock closed 5.4 percent higher at $17.37 on Nasdaq and up 5.5 percent at C$17.95 in Toronto. It still down more than 70 percent this year following a string of delayed or botched product launches, and disappointing quarterly results.
RIM's BlackBerry was for years the preferred device for businesses and government agencies, who treasured its encrypted data and distributed the device to millions of workers needing secure, round-the-clock email access.
But many workers now prefer using their own Apple and Android-powered devices to access corporate emails, raising security questions for corporations, which RIM hopes to address with the new software.
While a positive step, the larger challenges remain RIM's need to narrow competitive gaps in its handsets, RBC Capital Markets analyst Mike Abramsky wrote in a note to clients. He pointed to RIM's software deficiencies and limited content and applications available on its devices.
RIM's slice of the lucrative U.S. smartphone market fell to 9 percent in the third quarter, down from 24 percent a year earlier, according to research firm Canalys. Globally, the report placed RIM in fifth place, with 10 percent market share, compared with 15 percent a year earlier.
DUE BY LATE MARCH
Mobile Fusion, due in late March, will allow corporate information technology staff to set and monitor rules for passwords, apps and software on a range of devices, including Apple's iPad and iPhone, and smartphones using the Android operating system.
A company can remotely lock or wipe a lost or stolen device, a key selling point for security-conscious corporations that may have been wary of shifting away from the BlackBerry.
We will take full advantage of whatever security capabilities are provided by the core operating system. We're not going to hold that back in any way, shape or form, Panezic said.
Mobile Fusion will include and extend existing BlackBerry Enterprise Servers, or BES, behind corporate firewalls.
Panezic said the software will manage RIM's PlayBook independently from a BlackBerry after the tablet - which has yet to gain traction with either businesses or consumers - receives a long-awaited software upgrade, due in February.
He declined to give any pricing details for the Fusion service, but said it would be competitive with rivals.
It will help stem the tide of those companies that may have considered eliminating their BES but it won't help sell more phones, said Gartner analyst Phillip Redman. That's what they really need to do.
RATTLE SOME CAGES
RIM has recently launched touchscreen devices using its legacy BlackBerry operating system as it works to put the QNX software powering the PlayBook on to a new generation of phones from early next year.
The new software follows on from the acquisition of device management company Ubitexx, which RIM announced in May.
Smaller companies such as Good Technology, MobileIron and BoxTone already offer device management as companies fret about leakage of sensitive commercial information via their workers' personal, non-BlackBerry devices.
This will definitely rattle some cages among firms that filled a niche by securing and managing iPhones and other non-BlackBerry devices for corporations, Forrester analyst Christian Kane said.
Panezic said customers had requested a solution to handle Apple and Android devices, but RIM would consider adding support for other systems, such as Microsoft's Windows Phone, if it saw enough demand.
(Reporting by Alastair Sharp; editing by Frank McGurty)