RIM missed its chance to respond. Saving the company is now top priority.

 

RIM.

We’ve all lost at something before. Sports, love, business – whatever it may be, we’ve each lost something somewhere throughout our lives. It’s not like we didn’t see it coming – there are warning signs all around us and I think our rational side knows the end is near, that the loss is happening. Our emotional side, however, holds a grudge, hangs on too long, ignores the rational and prolongs the pain. We’ve all drunk-dialed our ex’s or feigned success when we know it not to be true. We simply can’t let go. We can’t move on.

As hard as it is to say, it must be said. RIM has lost this game.

The numbers (PDF) speak for themselves: 52% declines in sales quarter over quarter, a quarterly loss of over $500 million, 7000 layoffs – bringing the total to almost half the entire company gone in one year. Staggaring. But as staggering as that may be, the impact this inglorious fall has had on the value of their brand may be more troubling. According to BrandZ’s annual report (PDF) on the most valuable brands on the planet, RIM’s brand value fell 75% in the last 12 months alone, with no sign of improvement.

These days it is easy to dump on RIM and proclaim it dead as everyone else seems to have done – with joy I might add. Whatever its fate may be, the lessons to be learned from RIM’s plight are many and should not be ignored. The largest of these lessons seems to be in what RIM didn’t do while its competition was emerging – RIM simply stopped innovating and started reacting, they stopped pioneering and offered incremental improvements based upon past success. This happens. As whurley so duly noted at UNTETHER.talks in late June, technology is a cycle and companies ride those cycles – up and down. RIM’s competitors – be they Google, Samsung or Microsoft – have responded to the changes in the market place brought on by Apple, instead of reacting. That is the difference. Case in point: QNX.

A failure to respond

BB10, built on the QNX platform, was to be the future of the company. The basis of this new OS has been in the hands of RIM since its acquisition of QNX in April 2010. That is OVER two years and three years after the first iPhone hit the market (and punched everyone in the gut, repeatedly). It will not arrive until 2013.

The inability to move to a QNX-based platform in what could be three years makes me think RIM has missed its chance. Not because the technology isn’t good. Not because what RIM is trying to achieve is strategically flawed. It’s because RIM has squandered its window to transition its technology without destroying brand loyalty. RIM is taking its lumps long after Google, and Microsoft, and Samsung took theirs.

Microsoft provides the best counterpoint to RIM. It takes time to transition technology, to make it right. Microsoft realized this almost three years ago. It looked at the iPhone, looked at its platform, looked back at the iPhone, looked back at its platform and realized what it had could never compete. Perhaps Microsoft realized it could spend the next 10 years running on a treadmill, following Apple’s lead and still never catch up to its competitors – let alone surpass them. Microsoft admitted defeat, went into hiatus, and reinvented its future without baggage (Nokia might disagree about the baggage part, ed.). If, like RIM, Microsoft continued to react rather than choosing to respond, it would be less relevant today across all brands, not just mobile. Now, Microsoft has a (mostly) unified platform across mobile, tablets, and desktops, and licensing agreements with an army of hardware manufacturers.

Compare this to RIM’s last three years: see the success of the iPad and announce a tablet solution in October of 2010, long before it is ready, on a platform incompatible with BlackBerry smartphones currently in development; delay the release of BlackBerry 7 smartphones to dedicate resources to PlayBook development; release the PlayBook six months after initial announcement without core functionality like email; release delayed BlackBerry 7 smartphones four months later in August of 2011; announce new QNX-based mobile platform two months after BlackBerry 7 launch, which will be incompatible with BlackBerry 7 and all other in-market BlackBerry devices; fail to release a QNX-based BlackBerry within a year of announcement, with revised launch time 18 months after last device launch.

Which company would you rather be?

Launch BB10 or save the company – they aren’t the same thing

Timing is everything in business and does the timing for BB10 – early 2013 – make a difference? Is RIM just on the same treadmill it has been on since the smartphone market got competitive? Like that kid that sprints the first 100 meters of a long-distance race but can’t finish, RIM is playing catchup in a race that it can’t win. It is putting so much emphasis on a new platform that won’t have an impact on its bottom line for at least another year. Based on what we are seeing in the industry, will this BB10 be relevant or even wanted a year from now? Is RIM building for today, slightly passed today or 1-2 years down the road? Does RIM know the answer to that question?

There comes a time for reassessment and that time is upon RIM. RIM’s goal needs to be to save the company first – this is an obligation. These decisions will determine the final outcome of a once venerable Canadian bastion of innovation. Whatever RIM does, the path it is on is one that leads to obliteration. The company simply cannot continue “holding on for BB10”. It needs to take a stand, make a statement, innovate in the gut. It needs to get off the path it is meandering down because the cliff is approaching. We see it. The vultures see it.

It’s time for RIM to change. The industry has.


Edited with additional reporting by Douglas Soltys.

About the author

Rob Woodbridge

I'm Rob, the founder of UNTETHER.tv and I've spent 14 years immersed in the mobile and pervasive computing world. During this great time I've helped some of the most innovative companies grow their business through mobile. If you are in need of a mobile business advisor or coach, connect with me here to get things rolling.

  • I agree Rob I really hope RIM finds a way to put them self out of this negative brand they have created in North America. But I don’t think they are dead like everyone keeps saying though. North America represents about 10% of the whole possible market in the world that leaves 90%. That 90% no one else seems to be even thinking of yet other then Android and RIM. Apple cannot even compete in these markets because they don’t have or have not said they have a cheaper device then $700. RIM is opening stores and has huge subscriber base in this 90% that keeps growing every quarter because they thought ahead. So I say let the others fight over the 10% while RIM concentrates on the bigger picture, let them think RIM is going down with 2 billion in the bank and no debt. To be honest I don’t care what RIM is worth per stock I have a phone in my hand that I love and works perfectly for me. But its not an iPhone people say and to that I say “damn right it’s not”. If stock price mattered it would be underneath the price tag of everything we buy. Its not there so I wish people would stop comparing stock price to quality of a product.

    Lets ask an honest question Rob, or anyone else, do you feel like Apple is doing the same thing for the last 4 years? Apple feels like they are the leaders and cannot be touched? Instead of innovating they are just adjusting and tweaking what worked for them in the past. This is exactly what RIM did and I question how long they can ride this wave for also before something like the surface which changes the tablet market comes along and Apple asks “what happened” I like the iPad just as everyone else does but if I can have a tablet that run full applications, screw apps I have a full PC in my hand. Pretty soon these tables are going to flip and spin and it will be interesting to see who lands back on top. I think Apple people love their devices but they want more, people are just looking for the next device in North America..

  • This is a great article and take on RIM’s historical inability to act for the future. I’m not sure it’s as clear cut as that though. As I recently wrote ( http://bacononthego.com/2012/04/16/its-not-easy-giving-up-on-a-multi-billion-dollar-business/ ) there was legitimate hard decisions to make at RIM that were not present at other mobile companies. 

    Microsoft is, IMHO, not a fair comparison.  They did not have a super successful mobile business and platform like RIM did that they had to choose to abandon. They were also not dependent on that mobile business to survive as a company. They could afford to invest billions, yes, billions of dollars in a new mobile platform and that investment has been easily funded by the stable billions of dollars of revenue that the rest of the company generates. For RIM to basically say, at the peak of their market share in the US, that they would suddenly shift billions in resources to a new platform is a very hard decision to make.

    RIM fell down due to a tug-of-war internally between the carrier interests, business interests, and the consumer-ization of mobile. We all know I was firmly on the side of (and in frequent conversations with RIM trying to convince them of) the move towards consumer-ization and the consumer side is where their platform fell down and didn’t hold up to the Android and iPhone platforms.  

    I 100% agree that it’s ridiculous how slowly they have moved from acquiring QNX, and actually releasing a device. There’s no way they can defend that process as anything but slow, badly managed and badly executed. They are in the position they are in now due to how the company was managed internally and how they hamstrung themselves to interests that would end up not aligning with the requirements of success in mobile this decade.

  • First thing, the Surface isn’t going to kill Apple. In fact, it isn’t really innovative at all. It is Microsoft’s way of extending the desktop which is a completely different approach from Apple and Google.

    Technology goes in cycles so, yes, Apple is riding high on this one. In fact, they’ve won this round just like Microsoft did on the desktop in the 90’s. What changed for Microsoft back then was their inability to move into mobile seamlessly even though they owned a monopoly-like hold on the PDA market. Innovation happened. Someone (PALM and RIM) invented a way around the hold MS had on the desktop and gave rise to mobile.

    The next generation of technology leader – the next cycle – will not be an extension of what we are doing today, it won’t be problem we see right now that needs fixing. That’s why I don’t think RIM can succeed by focusing on the device – that’s more of the same: extension not innovation. I don’t care that it can talk to my car, that it can be in my toaster, it is more of the same we are seeing today.

    Someone will unseat Apple and I look forward to that day because it means someone invented a new paradigm and shifted the landscape. It won’t be BB10, it won’t be the Surface – perhaps it could be Google Glasses…

  • I touched on RIM’s biggest disadvantage back in January of 2011 here: http://untether.tv/2011/the-blackberry-disadvantage/ where I completely agree that they are at a significant disadvantage compared to the other players in this space. SURELY they saw that too but it just didn’t seem like they did based on some of their decisions.

    For the most part Jeff I agree with you. We’ve had a pretty good vantage point, you and I, inside of RIM to know the disfunction’s of this company as it grew as quickly as it did. Most of my frustration with this company is at the top level, the co-CEO’s who are to blame for the sorry state they are in right now. That and hubris and the blindness towards competitive threats.

    The one other thing that never gets mentioned is the board of directors. Where in the hell were they during this whole decline? Silent. The failures rest with them as well.

  • I’m never quite sure that a Board of Directors at a company who’s stock is primarily controlled by a few people — and those people are loyal to the founders — really has a huge purpose. When does a board truly stand up to the founders and take control? Since the members are voted on my the shareholders, the controlling shareholders can just vote on loyal board members. In that situation, I think it’s easy to convince the board to support the CEOs.

    We both agreed for years that they needed to make a change (how come they didn’t take us up on our offer to be the co-CEOs?) and year by year they did seem to ratchet up our frustrations =).

  • Jwcorey

    I’m with you on all your points here, especially about Microsoft… who always seemed to be *thinking* about what comes next whereas RIM always crossed their fingers and hoped everything would go back to the way it was. Several companies have made the mistake of waiting too long (will Microsoft be one of them? We’ll see. They come at this with interest in doing new things but they waited too long out of hubris), thinking that you always get another chance up to bat. The reality is, when the road curves to the left you have very little time to curve with it. If you miss the curve, you have limited time to correct your course. Not long after that, however, you’re no longer on the road.

  • Great analogy Corey. A select few companies can get back on that road but they can’t panic and have to think differently…something RIM is not doing right now.

  • No doubt about the potential of QNX but RIM may not be around long enough to be able to build that out. That’s the point. Focus on saving the company – do what needs to be done right now or there may not be an opportunity to let QNX – and it’s potential – to shine. 

    Save the company. Innovate.

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