Security features offer RIM a fragile lifeline

Along with firearms, radio and other standard-issue gear, Constable Ken Koke's police cruiser comes equipped with portable technology made by Research In Motion Ltd that he says has become an important tool in policing rural Canada. Koke, with the Chatham-Kent police force in southwestern Ontario, uses RIM's PlayBook to run checks on vehicles and suspects. Unlike his old laptop, the tablet is portable enough to take out of the car to record evidence at crime scenes. But for law enforcement officers like Koke, the big draw is RIM's acclaimed network security, a feature that Apple Inc and RIM's other competitors can barely match, and cannot beat - at least not yet. Police, along with insurers, the military and thousands of government agencies, remain important customers for the struggling BlackBerry maker as a data breach could invite litigation, compromise reputations or even endanger national security. "Despite the adversity and displacement RIM is experiencing across its enterprise customers, it's obvious that a hardcore contingent still see no solution better than BlackBerry," said John Jackson at CCS Insight, which advises wireless companies. The loyalty of that core customer base is a rare bright spot for RIM as it fights a tide of defections to flashier devices. Its still-unrivaled leadership in secure communications could also pique the interest of a potential buyer for the Canadian company, whose shares have sunk 80 percent since February 2011. "When I go in the street I have my handcuffs, I have my sidearm, and I have my BlackBerry. It's part of my gear and not something I would leave the station without," Koke said. "The PlayBook is a natural extension of that." NICHE NOT SAFE But it's far from clear if that niche will be big enough to rescue RIM, which faces a continuing decline in sales for its once-ubiquitous BlackBerry, and whose compact PlayBook never took off with consumers. RIM does not specify what proportion of its sales go to security focused government, legal and military customers, and analysts don't break that market out of the broader "enterprise market," which they believe has stagnated in recent years to make up about a quarter of RIM's 77 million BlackBerry users. Unlike Apple and other rivals, security-focused RIM has built direct connections between its servers and those of carriers and big customers, and its private network offers encryption that others need help to get. But the niche is not as safe for RIM as it used to be, given the arrival of smaller providers such as Good Technology, a private outfit based in Sunnyvale, California, that help companies beef up security on their employees' iPhones and Androids. Such offerings may not be as convenient for a corporate IT manager as RIM's out-of-the-box security, but they have enabled many companies to let their employees use personal devices in the workplace. The BlackBerry's secure approach is "becoming less of an advantage for RIM because, frankly, organizations are being forced to put solutions in place to allow secure access to documents and apps and other things on (Apple's) iOS and Android devices," said Tyler Lessard, who left RIM six months ago to join Fixmo, a small mobile security company.