What has RIM been up to?

I have been very skeptical about RIM’s future lately. This is partly because I am an Apple fan, and partly because I could not understand the value proposition of RIM anymore in this fiercely competitive marketplace of smart phone makers. Apple had become a design expert wowing every customer with each update, Nokia – Microsoft alliance is a somewhat smart move to stay relevant, PALM is dead, and Android is increasing its market share by trying to partner with multiple vendors. Now the question is “What has been RIM up to?” I haven’t heard anything that made me interested in this company or its offerings during the last 5 years? I didn’t shock me that they announced layoffs after earnings being down 12 percent compared to the previous quarter.

Let’s face it, Blackberry smart phones have not evolved as far as their hardware goes even close to an Iphone or the latest android devices. Having a full keyboard is great, but the phone itself stayed boring for the last 5-10 years. The article also mentions their slowness in getting new smart phones out the door. If you cannot stay innovative in this industry, you cannot stay relevant anymore. Gone are the days where if you had the smallest cell phone, you would be popular. Now people want a full platform with support for things such as easy integration with social media, HD capability, multiple interface support such as HDMI & USB 3.0, expanded functions through a rich community following and an application store. I feel like RIM has been late in the game in all of these aspects.

I understand the mentality behind their sales approach. They have focused on enterprises and relied on bulk sales, but now even the IT departments of these enterprises are adapting the more popular Exchange active sync, iOS and Android now and are less inclined to handle support for yet another platform to support such as the Blackberry Enterprise Server. I cannot imagine the profitability in this business sector to be too high. The hardware sales margins have been razor thin since the last 10 years. There is no differentiator either. So it feels to me like they are beating a dead horse.

The RIM Playbook also has not really taken off due to the much more hyped Ipad 2 release and their late entry into the market.

In summary, the Blackberry audience has simply moved on!

Now let’s talk about what I think RIM should do;

· I think the Blackberry App World needs to be heavily promoted. Most blackberry owners that I know do not take advantage of the app store. In a world where the money is in value added services such as software now, they have to take better advantage of this opportunity while their market share is still relevant.

· They HAVE TO come up with an exceptionally well designed phone that is actually attractive to the younger crowd. Keyboard is irrelevant to a lot of the users, so they can test out a new design from scratch.

· If they happen to fail on delivering on the above promises during the next couple years, I think a Microsoft – RIM merger might be inevitable. This could create a strong third player after Apple and Android. It is all about a numbers game. They can take advantage of the network effect by delivering value added services to increase their revenue from application sales. Things such as BBM became totally irrelevant in today’s world due to the ever increasing popularity of alternative mobile software applications that are platform independent. (Ex: Whatsapp messenger service, Skype etc.)

Source: http://news.cnet.com/8301-31021_3-20071715-260/rim-misses-on-revenue-announces-layoffs/