More bad news from RIM. Sales dropped last week 33%. As if that weren’t bad enough, the company’s self-acknowledged life preserver, BlackBerry 10, now won’t be available until early 2013. That is after the Holiday shopping season. It will be after the expected October release of the iPhone 5. It will likely be well after the release of Microsoft’s Windows Phone 8. Where does RIM fit in the new mobile ecosystem? Everyone has moved on.
RIM’s BlackBerry used to dominate the enterprise. It was the first messaging communicator and did a nice job of adding voice and layering on enterprise class security. However, in 1997 Apple introduced the iPhone marking the onset of the smartphone era. Phones were no longer about messaging and voice. Data, content, interactivity and visual display became the new dominant features while RIM clung to text communication.
When RIM Sales Fall does Anyone Hear It?
At this point, RIM is a forrest whose inhabitants are fleeing. Even those that were walking away have had plenty of time to emerge in another smartphone manufacturer’s meadow. EdgeLens has written recently that RIM’s $2 billion cash hoard may give it a chance to survive. However, that assumed some traction on the new BB 10 devices later this year. Two billion in cash can disappear quickly when sales are falling 33% and severance costs of $350 million are on the horizon for 5,000 employees. Making matters worse, RIM CEO Thorsten Heins, said today, “there’s nothing wrong with the company…” according to Reuters.
The Market Wants a Third Player: Microsoft
You can see that the mobile market wants a third player. Given their consumer first focus, enterprises are wary of Apple and Google being the only options. This helps explain in part the great reception of Microsoft’s newly announced Surface Tablet. It is a device that looks to accommodate consumer preferences, but with its standard keyboard and pre-installed MS Office also looks like a business first device.
BlackBerry was the enterprise mobile communicator of choice. Microsoft is the enterprise personal productivity suite of choice. Microsoft is also moving to unify the entire computing stack from PC to tablet to smartphone in a common interface and operating system (OS). While the OS may matter less than it used to, many people believe this unified environment will be a big benefit.
The enterprise is looking at a competitive Microsoft, a Google more focused than ever on business and an Apple app ecosystem dedicated to making iOS devices business friendly. Three choices is enough. It is not clear that RIM provides any distinct benefit to keep it afloat.
Does RIM have relevance
Enterprises have already dismantled the BlackBerry wall. Apple and Android based devices have invaded the enterprise and approaches have been adopted to manage and secure them to support bring your own device (BYOD) programs. The app ecosystems have developed numerous tools to make these devices productivity marvels. Microsoft has a place because of the dominance of its OS, productivity software and large business sales force. RIM no longer has an asset to leverage and will soon be evicted from many enterprises altogether. As a result, it will no longer be playing an insiders game which will make it’s pitch even harder.
The other potential avenue would be for RIM to become a hot consumer device. The consumerization of IT will continue to be a big driver of enterprise adoption and consumer sales would drive volume which can reduce supply chain costs and fund R&D. However, there is no longer a robust BlackBerry app ecosystem and the features it is considering may be interesting today, but are likely to be common when the devices finally hit the market. Even if there is $2 billion in cash – it is likely it will be much less – it pales in comparison to the type of investment that Apple, Google, Microsoft and Samsung can put behind new device features.
A rescue by a hardware manufacturer such as Lenovo would seem like the best fit. Lenovo has an enterprise focus and has access to China. It is just the type of company that could really harvest RIM assets and start building a big user base again. Without this type of union, it is hard to see RIM being relevant a year from now despite protests by the current CEO.
What do you think? Is the BlackBerry 10 delay the final nail in RIM’s coffin? Comment below.
