So where does this leave us with Ciena?

Here’s a company that, any way you look at it, is just a bit-pusher. The lower layers of the network can’t be convincingly linked to personalization—they can’t afford to be made aware of users and activities or they won’t scale and contain transport costs. That means that they’re on the road to even deeper commoditization, and that’s problematic.

It’s particularly so for Ciena because they told the Street they planned to increase margins significantly over Street estimates. Sure, they didn’t offer an aggressive or firm timeline, but they’re making a promise that they cannot possibly keep unless they plan to either buy or build their way out of the optical layer. So where would they go? They couldn’t expect to climb up to Ethernet and IP. First of all, there are a million big incumbents there; secondly, that space has its own margin/features problem.

Oh, well. At least they’ll have company from RIM—the classic example of how a company can stick its head in the sand and accomplish nothing, other than perhaps getting infested with ants.

RIM had an absolute lock on business mobility because they had a lock on the handset/appliance space for businesses with BlackBerry. But they dawdled and fiddled and let their edge slip. They watched Apple take market share, and Android come on even stronger in terms of unit volume, and Microsoft and HP try to ignite their own business appliance programs. RIM’s counter? A shortsighted, ineffective, uninteresting tablet, which it gave an insipid launch.

So what do they do to recover?  Nothing.  It’s too late.

This is a classic story of how not being innovative will hurt you, perhaps fatally. The iPhone caught everyone by surprise, to be sure, but it should have generated a fast and insightful feature-differentiated response.

There was at least a year when RIM could have cemented its franchise with the enterprise and then built into the consumer space. RIM worried instead about first trying to enter the consumer market, and in that period, Apple made the iPhone more competitive in the enterprise. Then we had the iPad, which even in its first release was light-years ahead of the PlayBook. Moral: Differentiate or die.

I’m not really too hopeful about Playbook, frankly. The problem isn’t the form factor or the OS as much as the need for RIM to straddle a high fence with its tablet.

You can’t win in the tablet device space, or even play well, without a strong consumer value proposition. RIM can’t hope to get any near-term traction with Playbook without tapping the Blackberry base. How do you do both, particularly at a relatively late date at the dance? Seven-inchers would be cheaper by nature (they’ve generally proven to be), but RIM has waited until the pricing on 10-inch tablets seems to be coming down. Given that the iPad has set the 7-inch form factor as the consumer standard, that means an uphill sell.

To add to the problems, Playbook is getting almost universally bad reviews, with the problems attributed to haste and hurry. Well, gosh, RIM, what were you thinking here? The instant the iPhone hit the market, every handset player had to realize that the whole wireless device market was a new game defined by a new player. Even before the iPad hit, RIM should have realized that Apple was going to continue to be a game-changer, and the instant it first appeared RIM knew it had to respond.

So hurrying to get something out? Not unless it waited a year before starting. The simple truth is that you can’t launch something whose sole goal is to compete with something else. You have to have an affirmative goal to support a doctrine of affirmative buyer choice or else you get fuzzy on both your value proposition and your differentiators — which is exactly what RIM has done.

The iPhone launched the smartphone revolution, which in turn launched the applet/widget revolution, which in turn is opening the question of whether device-resident intelligence will play a commanding role in the development of what the buyer/user perceives as “services.” The iPad has had a similarly transforming effect in the tablet PC space, and competitors have already established themselves with smartphones — primarily via Android-based phones in the broad market and on RIM’s building on its enterprise incumbency. Competition is also increasing from both sources in the tablet space, with pretty much the same cast of competitive characters.

What creates Apple’s platform dilemma is that broader installed bases begat greater support for developer opportunity, and thus a larger application community. As I’ve noted before, this was one of the factors behind Apple’s loss of its early lead in the PC market to the IBM-compatibles. An open framework attracts support because it is open, but it also reduces the originator’s ability to control and monetize its own marketing, which is why Apple has traditionally rejected such an open approach. But a marriage of its Mac operating system and the OS used for appliances, plus the harmonizing of a development environment across both, would increase Apple’s developer mass.

The challenge is that it will also almost certainly cause Google to prioritize Android as a tablet OS, thus exacerbating the competition between these two industry giants. The further the Android OS goes in terms of supported hardware, the harder it will be for Apple to sustain itself as an appliance walled garden. Some gestures of openness exist through the developer program, but Apple’s long-standing feud with Adobe over Flash illustrates where walled-garden thinking can take you and how it can create a lot of gratuitous enemies.

On the service provider side, the competition between Apple and Google (through its Android proxies) creates yet another path to disintermediation.  Ceding service-creation innovation to over-the-top (OTT) players was a problem in wireline, and ceding it to smart device vendors and developers in the wireless space only makes things worse. The so-far-ill-fated Microsoft phone strategy has been toying with hosted services, but probably more as a means of getting Microsoft into the OTT feature business than as a means of empowering operators. Can operators respond with an approach of their own? Can they respond in time? Their service-layer revenue future may depend on it.

All of this doesn’t spell the end of the iPhone, but it might spell the end of the margins that Apple has been able to command for its premier device. That would put Apple in the position of accepting lower margins (and likely a falling stock price) or trying to boost margins for the iPhone with new models/features.

The real news, though, will likely come from the face-off between a premium-priced iPhone and a discount-priced Android. How much do consumers value cachet? We may find out.

Apple’s iPhone 4 has done very well, but there are a lot of new competitors coming down the pipe — many available on AT&T alongside the iPhone and many available on Verizon, which still doesn’t support iPhones. Android 2.2 is going to be the OS on many of these new phones, and that’s a much better (some even say superior) phone OS.

The real issue for this particular race may be the value of Android as a broader-purpose OS. You can run PCs, tablets and a bunch of other things on Android. An Android ecosystem could benefit from the additional device breadth to create additional developer support. We don’t think iPhones are in trouble, but we do think that they’re going to be under new pressure this fall.