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Balsillie Explains Why BlackBerry is the Most Profitable for Carriers

by Ronen Halevy on Apr 6th, 2009 at 7:00 am EST
2 Comments »
 

funnel RIM has always touted their carrier relationships as one of their most valuable assets. They also like to call themselves the most profitable smartphone for carriers. Larry Dignan at Seeking Alpha had a chance to get some more information from Balsillie as to why RIM thinks that is so.

It turns out that it is all about network usage. Balsillie essentially pointed out that BlackBerry devices use less traffic since RIM optimizes all the data that goes to and from your BlackBerry by funneling it through their infrastructure first. As the AdMob report showed last month RIM uses a margin of what other devices like the iPhone uses. That means that since carriers have limited bandwidth available BlackBerrys make better use of it and are thus more profitable. In short they use less network capacity per BlackBerry making them more profitable.

Even though new 3G technologies offer the possibility of faster connections in reality carriers do not have a unlimited amount of backhaul capacity. That means that even though 3G might be capable of speeds topping 20mbps the towers themselves may not have that fast of a connection.

If you are interested in Balsillie’s exact words I recommend checking out the full article at Seeking Alpha. Kind of interesting to note that it is rumored that AT&T is increasing their network capacity tenfold to prepare for the next iPhone this summer.

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This entry was posted on Monday, April 6th, 2009 and is filed under News.
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2 Comments to “Balsillie Explains Why BlackBerry is the Most Profitable for Carriers”

  1. Posted by: DavidB
    April 6, 2009 at 8:10 am EST

    T needs more backhaul capacity BADLY so good on that! Helps Bold users too!!!

    So Jim is right and all, but this is spin. BlackBerry being more profitable for carriers may be true and all but that doesn’t endear the devices to potential customers. RIM had better have a far better marketing campaign this summer than they did last year, as the next iPhone recession or recovery or not is gonna be HUGE. RIM, above truths won’t help you against Apple….

  2. Posted by: WilliamT
    April 6, 2009 at 12:38 pm EST

    In the carrier space it takes about $0.02 (or even €0.02) for each megabit/s of data being pushed around the network. If there are ways to squish that data out of the equation, it becomes much better in two major ways: 1) The end user quality of experience (QoE) is better because everything is going faster and 2) The Carrier works more efficiently because the network infrastructure is not being wasted.

    There are companies like “Flash Networks” and others that specialise in doing for iPhones what RIM is doing for BlackBerry’s – removing the overhead. It really makes a difference. You don’t even have to put a “client” application on the handset or other network device to make it work.

    I’ve been a LONG time user of the BlackBerry world I’m happy to say. I like the iPhone for sex appeal but , like in any relationship, it’s better to marry for brains and earning potential as looks fade :)

    Cheers!