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RIM is standing on a burning platform.
About a year ago, Nokia's then-new CEO Stephen Elop stunned the industry with his "burning
platform" memo that indicated just what a dire state Nokia was in, and that in effect
it was like standing on a burning oil platform where to stay where you were meant certain
doom, and the only chance was to take a leap into the unknown.
One year later, RIM's new CEO, Thorsten Heins, finds himself and his company on a similar
burning platform. RIM's recent years of growth have been on the back of buoyant consumer
sales, but sales of the profitable high-end high-margin devices have slumped against iPhone
and Android rivals. At Mobile Gazette, we spotted the signs of a long-term decline way
back in 2009.
RIM have pumped huge sums of money into their largely unsuccessful Playbook tablet and they
have struggled to make the BlackBerry OS as usable and as sexy as rivals. And although
low-end (and low margin) products are still selling quite well, the entire consumer market
has turned into a money pit for RIM.
As-yet-unconfirmed rumours indicate that RIM may be pulling back from the consumer market,
allowing it to refocus on their business and corporate customers, in effect returning to
their roots in the early 2000s, although sources within RIM are denying this.
RIM's BlackBerry devices are still very popular with corporate customers, and RIM's new Mobile
Fusion device management product is exactly the sort of thing that those customers need
to look after an increasingly diverse mobile ecosystem.
However, in many respects, BlackBerry devices are pretty unappealing to use compared to
iPhones, Android handsets and even Windows Phone 7 smartphones. But if you want to access
your corporate email and calendar then there's really nothing better than RIM's enterprise
solutions. And to their credit, there is a decent choice of handsets available for users
and businesses to choose from.
So, it makes sense for RIM to refocus on business customers, as the competition is heating up
here too.. especially from devices using ActiveSync to talk to corporate Microsoft Exchange systems.
Corporate RIM customers don't care about "sexy", they care about something that works, but
RIM still need to prove that they are better than the competition.
As for consumers, perhaps the key selling proposition they have is still BlackBerry
Messenger (BBM), something that has a decent share of the youth segment. So, there's still
a significant market to exploit here, and it should surely be possible to turn a profit.
It's worth bearing in mind that RIM is a company of two parts - one is the part that provides
products such as push email, management and messaging. Another part designs and makes
smartphones. But it seems that the BlackBerry devices themselves are using a dead-end platform
despite all of RIM's efforts, and perhaps this is where they need to change.
In our view, RIM should very much reduce their existing BlackBerry range and sell them as
legacy devices to corporate and larger business customers. For consumers and smaller businesses,
RIM should look at a software solution using another platform completely. It should surely
be possible for all of RIM's services to run on an Android smartphone (for example). Those
Android devices could even be branded as "BlackBerry" handsets, either designed and built in house
or just bought in as an OEM product, or something in between. RIM should stop pumping vast sums
of money into technologies that are not selling, and join one of the rival camps instead.
When Nokia jumped off the burning platform, they chose Windows and Microsoft as their
partners, a move that has not been wholly successful. RIM can learn from Nokia and align
itself with a more established platform. Alternatively, they can stay where they are and face certain
extinction as the flames get ever closer.