Typing RIM into Google News makes for nasty reading. If you are unaware of the current situation for the Canadian phone maker, here are some choice headlines:
- BlackBerry delay darkens RIM’s future
- RIM Nose Dives After Another Disaster Of An Earnings Report
- Apple’s App Store alone worth more than RIM
- RIM’s Absurd Plan To Fix Itself: Do Better Advertising In 2012
- RIM activist renews call for leadership change
And that’s just a snapshot.
If I was Mike Lazaridis or Jim Balsillie, I would be wondering two things, one where did it all go wrong and what can be done about it. The world isn’t interested in the first question and deeply concerned about RIMs’ plan to answer the second.
Of late RIM has been looking at the past glories through rheumy and misted eyes, wondering what happened. It had it all, market dominance, fame, fortune. It was the incumbent, the dynasty the legacy but all it took was some sure footed competitors and the cracks started to form. Terms like App stores, eco systems had been used before but now they were started to hurt as the customer began paying attention. Soon they were no longer the champ but they were still winning, posting big numbers but the punches were slower and the figures smaller. RIM were slowly becoming another in the long list of journeymen, gatekeepers, people who still had marquee value in mobile but were a pale shadow of their past selves.
RIM needed a win, a big one, one to prove that there was still fight left in Waterloo.
So on the 15th of December industry pundits, analysts, tech writers and investors came together for the most important call in the companies history, its Q3 earnings. It started well a sharp one two combo: RIM shipped 14.1 million devices and sold 13 million of them and it has increased its subscriber base to 75 million.
Unfortunately they seemed to have emptied the tank thirty seconds into the first round as reality started to land some heavy blows. Its critically important American operation was massively under performing, with USA market share falling to 10%. RIM responded a flurry of stats about non USA markets, up 56%, East Asia, Africa and Europe were all showing decent performance and it was still king in Latin America.
Perhaps it could win after all, it aint over till its over right?
But a $485 million write down of its failed Playbook tablet left it shaken, a drop in ARPU (average revenue per user) left it gasping and then reality delivered its Sunday punch: devices using the BB10 platform would not arrive until Q4 next year.
Cameras flashed as RIM crumpled to the ground, the roars of the crowd ringing in its ears, the sound of pundits typing RIMs’ eulogy, deafening.
Leaving the boxing analogy aside, if RIMs plan was to allay fears about its future, it failed even though it is still a profitable company. The importance of the BB10 platform and the damage its delay has caused is immeasurable. They have stated, clearly that will not have a competitive platform for the majority of next year.
To analysts, investors and the wide world what they were looking for was a sign that RIM had finally seen that they could no longer command the sea to retreat and that they needed to move fast to stop from drowning.
However, looking deeper, perhaps there are signs of change.
If we look at Blackberries of the past they have not been anything close to cutting edge, more often one of two steps behind the competition. No more so is this obvious when comparing App stores, whilst they have made decent strides in catching up to Google and Apple, there is still a way to go.
The reasons given by RIM are interesting and point to a significant change in the company:
“we are focused on delivering a high-quality, fully featured user experience when these products are launched. This means having a well-developed ecosystem of applications and services, as well as having the hardware specifications, industrial design and application features that will meet the expectations of consumers in the competitive U.S. market.”
If BB10 is to be the saviour of the company, it means that it has a world of expectation upon it. Already, we are hearing from company sources, reports that ‘BlackBerry 10 is a failure that won’t be able to compete‘. Having said that, RIM appears to understand that it cannot afford to launch an ok, good or great product, it needs to be exceptional and world beating. A device, which RIM has never created before, designed to be a market leader because of more than free messaging or corporate culture.
A device that makes users want it.
But it also needs to pursue an alternative strategy and there are plenty of people suggesting some. From seeking a purchaser, to selling its hardware division (as that worked so well for HP), abandoning the Blackberry operating system and adopting Android, to just becoming a software communications company.
My take is that RIM needs to build on its success and attack its products that damage its core values proposition, products like WhatsApp.
The major reason the emerging and youth markets buy into Blackberry is BBM, but they are leaving as soon as they discover free, cross platform messaging solutions. RIM shouldn’t try to stop this in the short term, but they damn sure need to make sure that when the user leaves the Blackberry platform they continue to use BBM.
At the moment, applications like WhatsApp are getting traction but they are still suffering from the issue that ‘my friends aren’t on it’ meaning that it can’t quite get to that tipping point that drives adoption. Users also have to go through the hassle of adding their friends, getting used to a new way of doing things and the fact that is a single server, rather than the multiple sources provided by BBM. It also lacks name recognition, its another in a long list of ‘free’ messaging solutions, the user may struggle to determine which is the best to use.
By providing a multi OS strategy (I would target Android, iOS, Windows Phone and HTML5), it can guarantee that even if the user dumps the operating system and the device, that they can still generate revenue by offering a product that the user recognises and trusts. This could stem the problems RIM faces in the short term, giving it time to create the device it needs to save itself.
RIM has the chance to resurrect itself, but it requires drastic changes in its thinking.
Mike and Jim, the world is watching, time to make your move.
Thomas Curtis is a tech devotee and former web developer in education now running his own marketing company. He’s honest, passionate, hypercritical and expects the best, now.