So the company once known as “Research in Motion” has finally played its hand, and the reviews are mixed.

Personally, I side with Goldman Sachs and I’ve tweeted as much – I truly believe that Blackberry will be a strong 3rd in the smartphone market.  And I’m going to attempt to explain why.

When people think of RIM and its long slide from #1 in its industry, they instinctively think of Nortel – another Canadian tech darling that rode at the top of its industry, but now exists as a small part of a larger patent portfolio.  Management issues aside, both companies found themselves in a position of increased competition and eventually lost much of their perceived relevance.

Yet, I still believe strongly in Blackberry’s prospects – on the mobility side at least.  Part of that is of their own doing, the rest is a function of their industry.

Industry first.  Blackberry’s competition consists of Android, iPhone and Windows Phone.  And while you can argue the finer points of who has executed most impressively with respect to O/S, ecosystem and application offerings, you can’t deny that each company manufacturers a smartphone experience that is starkly different from the others.  Apple’s iOS devices offer a curated, walled garden.  Windows Phone, a less-curated walled garden but a very polarizing user interface with strict design guidelines.  Android represents the wild-west of the smartphone industry; no restrictions, and vendor-specific customizations.

Each platform offers a modern version of a smartphone operating system.  Each platform is supported by an application and media ecosystem – arguably of differing sizes and content quality, but the infrastructure is there.  So on the face of it, you have four competing products and solutions, all of which represent the state of the art in the smartphone space, all of which offer distinctive user experiences.

That being said, Blackberry no longer needs to compete on specifications alone, or price alone.  They’ve differentiated sufficiently on standout, unique features – Blackberry Hub, Blackberry Balance, Blackberry Peek, an interesting take on the homescreen – that they have a compelling offering in BB10.  Note that I’m not saying that these are good features; just different.

That’s the industry that Blackberry is playing in.  And it’s fortunate that they’re not aiming to take on iPhone or Android, because they honestly have no chance of gaining any signficant market share from those competitors.  However I do believe that they stand a very strong chance of stealing market share from Windows Phone – and that comes down to the Blackberry name and legacy.

My evidence is subjective.  iPhone and Android are considered the gold standards when it comes to smartphones and app stores, yet I’m still surprised that I continue to see people clinging to their older Blackberry devices.  Meanwhile, Microsoft has a 1 1/2 year head-start on Blackberry yet they’ve failed to establish themselves as a bona-fide 3rd.

What is it about Blackberry that inspires so much loyalty?

I don’t have the answer, and while I’m under no allusion that the suggestion of loyalty  is enough to bring the masses flocking, I can’t deny that there’s something compelling about the Waterloo-based company’s iconic products.  I never see a Windows Mobile phone in public – why so many BB7 (and older) devices?

But the real question is – is it enough to convert BB7 (and older) users to BB10?  Will that be enough to pull Blackberry out of its slump?  Will users that have eschewed iOS and Android for Windows Phone, instead jump ship again to BB10?

Realistically, the long-term prospects for the company are still questionable.  And unfortunately, it does appear to be a result of the amount of time that it took for RIM to finally get its act together.  While I have no doubt that BB10 can trounce Windows Phone in the smartphone marketplace, the real truth is that Microsoft is quite happy to lose money on Windows Phone if necessary in order to push its presence in that space – with the intention of promoting its vertically-integrated solutions.  Blackberry, meanwhile, has no worthwhile consumer business outside of Blackberry mobile phones – in that respect it’s truly make-or-break on BB10.  Meanwhile, their enterprise business is not the behemoth it once was:

• It has come under intense competitive pressure due to the BYOD movement
• It has been scrutinized due to recent service outages
• It doesn’t have the same brand loyalty that exists in the consumer market

Consider the news of changes to service fees, and it becomes more obvious that Blackberry’s traditional revenue streams are drying up as a result of the industry shifting more towards generic, data-centric service plans.  I imagine they’ll even have an increasingly-tough time hocking their BES software, despite the ability to manage iPhone and Android devices, as any potential customer must realize the obvious conflict of interest: that Blackberry would rather you use their software to manage their devices while they also collect on BES service plans.  Why go with Blackberry’s enterprise software if alternatives exist from vendors with no vested interest in the end-user devices they purport to manage?  Who wants to hitch their wagon to the horse that left them behind the pack for such a long time?

Okay, so why is Blackberry a “buy”?  And why do I agree with Goldman Sachs?

Because the company still has value.  And having brought their consumer side out of the doldrums, they have arguably more value than they did 12 months ago.  They’ll probably see mildy-impressive sales of BB10 devices after launch.  They will inevitably report strong earnings for a quarter or two, perhaps longer.  They’ll beat expectations.  And around the same time they’ll plateau as they struggle to gain more market share.  They may divest Enterprise.  There may be more layoffs.  And their rating will change to “sell”, and investors will make their quick buck.  What of Blackberry after that?  Who Knows(tm).

Which brings us to the second part of this article’s title.  Blackberry will be a strong 3rd, but they’ll either maintain that position as a smaller, more streamlined version of their current selves or – more likely – they will attain that position and then find themselves in the same boat as Palm in the not-too-distant future.  There simply isn’t enough market share to support their continued existence as the RIM we’ve always known.  Even if Apple releases a new iPhone with the same stale iOS, it will only take them one product cycle to rectify that problem.  Microsoft will not go away and will not concede significant market share.  Android will not cede market share, particularly as Google continues to push its software and hardware agenda.

I simply don’t see the version of reality playing out that has Blackberry being a content, distant third in the smartphone space, gaining no significant market share while giving investors a continuing return on their investment.  And that’s a shame, because I truly believe that Blackberry is an innovative company with a compelling legacy and the technical know-how to create good devices.

Ultimately, we’ll see if I’m wrong.  Considering that I’m no expert in this field, I can naively hope that I will be wrong.