Research In Motion Ltd (BBRY)’s Hardware Flexibility Gives It An Advantage

Research In Motion Ltd (NASDAQ:BBRY) is making a strong push to re-emerge as a player in the smartphone business. Its Z10 is now available in the US, and its Q10 will follow later this spring. In May, the company is expected to announce more handsets running its BB10 operating system.

Research In Motion Ltd (BBRY)

Google Inc (NASDAQ:GOOG)’s Android has always appeared on a variety of handsets, standing in stark contrast to Apple (NASDAQ:AAPL)’s one-size-fits-all smartphone policy. Yet both strategies have had their limitations. Research In Motion Ltd (NASDAQ:BBRY)’s strategy could combine the best of both worlds.

Apple vs Google

As Research In Motion Ltd (NASDAQ:BBRY) has faded, Apple (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) have come to dominate the smartphone market, both in the US and throughout the world. Both have pursued different strategies to a great degree of success, but both have run into limitations.

For Apple, the company has been able to offer a consistent, high-quality experience to both users and developers. Consumers can feel confident they are getting a quality phone with an intuitive interface; developers can sleep easy knowing their apps will work for all iOS users.

For Google, Android has been developed as an open source operating system, leading to mass adoption. Users can find an Android phone to fit whatever desire they may have — large phones, small phones, cheap phones, QWERTY keyboard phones, and so on.

Unfortunately, both strategies have weaknesses.

Apple’s one-size-fits-all doesn’t fit everyone

Although Apple has over 40% of the smartphone market in the US, its share of the global smartphone market is less than half of that. What’s more, its share of the market in the US could fall as new devices exploit new consumer demand.

Apple’s iPhone carries a hefty price tag, so many consumers in developing nations simply can’t afford it. The iPhone 5 can cost over $900 without a carrier subsidy, and even the nearly three year old iPhone 4 can run over $400. Most consumers in countries like India and China do not have the luxury of a carrier subsidy, meaning the devices are out of their reach.

Furthermore, the iPhone comes in only two hardware configurations, leaving those who want larger screens or physical keyboards out in the cold. During Apple’s last conference call, CEO Tim Cook affirmed the company’s belief that the iPhone 5’s four-inch screen was ideal, yet many consumers have shown a preference for the larger screens offered on handsets made by companies such as Samsung.

Android’s fragmentation could be its undoing

For its part, Google’s Android is famously fragmented, with only about 13% of Android devices running the operating system’s latest version, Jelly Bean. Furthermore, the open source nature of Android has led to speculation about security.

Because of Android’s fragmentation, many app developers have opted to release their applications on Apple’s iOS before later bringing it to Android (Instagram is a major example). To create an app for iOS, a developer need only test it on a couple phones; for Android it could require compatibility tests with dozens of handsets.

Both BlackBerry CEO Thorsten Heins and Apple’s Phil Schiller have attacked Android on security grounds. As Google freely gives away the operating system’s source code, the ability for hackers to find exploits seems more likely than for a controlled system such as iOS or BB10.