Sunday, April 01, 2012

BlackBerry Maker RIM Announces New Device That People Will Actually Buy

Eh, it is April Fool's Day, after all.

...RIM said sales of BlackBerrys fell sharply in the latest quarter, leading to the company's first revenue decline in seven years. Its subscriber growth rate from the previous quarter also hit an all-time low of 3%. And two of RIM's top officers stepped down, leaving RIM's executive bench as shallow as it has ever been.

Meanwhile, morale has flagged amid the unrest, according to executives inside and outside the company.

At a dinner meeting in February between RIM's chief technology officer, David Yach, one of the executives who left Thursday, and chief information officers from companies and government agencies, including the Department of Defense, the mood from the RIM side was somber, according to a person who attended the dinner.

...The company's market capitalization hovers over $7 billion, a big bite for any buyer to swallow. Some bankers said there would be few buyers at that price tag for the whole company.

The exception would be giants like Microsoft Corp. andNokia Corp. The two explored a joint bid for RIM last year, according to people familiar with the situation, but those talks were preliminary and didn't lead to a bid.

Nokia has adopted Microsoft's operating system for its latest smart phones. Given that close partnership, the two could make a coordinated approach, if they decided to bid, according to people familiar with the situation.

If they jointly bid, the two companies would likely scrap RIM's mobile operating system and instead equip BlackBerrys with Microsoft's Windows software, with Microsoft taking over RIM's enterprise network, these people said.

RIM was on top of the world just three short years ago. Now they're gasping for air.

Most tragically, they failed to leverage their primary assets -- a secure, global network and the BlackBerry Enterprise Server (BES) software that manages corporate connectivity -- and instead tried to concentrate on the fast-moving device market. This task was made decidedly more difficult by the entrance of Google's Android operating system, which is distributed free to device makers and supports incredible diversity for handsets.

If RIM had concentrated on building highly secure client software packages for iPhones and Androids using its BES management console to control all of these devices, it would have a huge revenue stream that could have funded its device and OS operations. Instead, it failed to leverage BES on other devices, and thereby created a market for secure clients from companies like Good Technologies and MobileIron.

As it stands today, I don't see how RIM survives as a device maker.

1 comment:

Ten Mile Island said...

Here's how one company dealt with the dilemma: