Last decade, Apple pretty much took the smartphone market from BlackBerry and this month it looks like the FBI may be inadvertently helping BlackBerry take it back. Reactions like this indicate that Apple will need to make moves with IBM to ensure that it doesn't lose more of its customer base if it refuses to comply with the court order. It also showcases the strength of BlackBerry's own security strategy in the face of hostile -- or even friendly -- nations.
Bill Gates even entered the discussion, strangely enough, seemingly on the FBI’s side, though he seemed to rethink this position early this week. This showcases one of the perception problems Apple has in that it seems what the FBI is asking is reasonable, but it actually isn’t. (And then, as I was writing this, a decision came down in New York favoring Apple.)
Apple vs. BlackBerry
To suggest that BlackBerry isn’t on Apple’s side in its fight with the FBI would be disingenuous. BlackBerry absolutely agrees with Apple, but it is in a far better position to fight this kind of fight than Apple is. First, its communication servers largely reside in, and are owned by, the organizations that deploy BlackBerries. This means that only in the case of consumer-purchased phones can any law enforcement agency or government force it to provide access to server-based data simply because it doesn’t hold or own the servers that reside on customer sites.
Consider also that BlackBerry resides in Canada and governments (including the Canadian and American governments) have largely standardized on BlackBerries because they're more secure. Forcing BlackBerry to compromise this security would translate into a government-level security exposure and force a defense by those governments. That's something that Apple doesn’t seem to enjoy.
I should also point out that BlackBerry phones are fully transparent to the organizations that deploy them. So, in this case, the FBI would have been able to get access to the phone from the government agency that had deployed it and never needed to contact BlackBerry in the first place.
So while BlackBerry clearly supports Apple, it is in a unique position to benefit from the ongoing drama.
This was kind of fascinating to watch because the difference in positions wasn’t a Microsoft vs. Apple thing, it was an ex-CEO vs. a current CEO thing and it showcased the risk for Apple. Gates hasn’t been a tech company CEO since before the iPhone was launched. In fact, he pretty much preceded smartphones in general -- when he ran Microsoft, flip phones were still far more prevalent. To Gates, the idea of giving someone access to a phone doesn’t seem to be that difficult and he didn’t initially see what the big deal was. It also wouldn’t be a one-time thing because there are a huge number of other iPhones that both domestic and foreign agencies would like to decrypt for anything from criminal and terrorist activities to domestic disputes and internal dissidents. The cost and brand damage of all of this on Apple could be massive, but Gates is thinking more like a civilian these days and no longer has the perspective of a current tech CEO.
This goes to the heart of one of Apple’s big problems and that is that most people aren’t current tech CEOs. They see what appears to be a trivial process against a massive exposure and wonder why Apple isn’t conforming. This kind of thinking could actually get a ruling in Congress that Apple doesn’t want and iPhone users, if they understood it, wouldn’t want either. But the “understanding” part is proving very difficult because currently more U.S. citizens support the FBI than support Apple (but it is really close). Apparently even iPhone owners mostly support the FBI, which is clearly very problematic for Apple.
Apple needs to move the security component that is being challenged from software to hardware, which would make it nearly impossible for even Apple to open up these phones. It needs to implement business-hosted communications and management servers, which IBM can help with, in order to get out of having to provide anyone with anyone else’s information. This would put the responsibility on the phone owners and not on Apple. And, finally, it needs the support of the U.S. government in the way that BlackBerry has the support of the Canadian government. If not, it needs to think about moving phone leadership and operations to a country that will supply it with that defensive support. If it doesn’t do this soon, it will eventually have its phones compromised and that could be the end of much of Apple’s iPhone business.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+.