I AM CANADIAN!
For those of you who didn’t know, I am a very proud Canadian (and, incidentally, a Kick Ass Canadian to boot) so it pains me to hear the way some in the mobile and technology community roast our largest technology company, Research In Motion – you know, the guys that pioneered the whole email wherever I go thing.
I’m really not one to defend RIM either – they have had a number of missteps along the way that have caught them on their heels but they are still #2 in active devices and, quarter after quarter, they consistently grow their user base. This industry is different from when they invented the BlackBerry and they are absolutely at a disadvantage when it comes to the competition but not entirely because of their hardware or operating system or the terrible mobile web experience.
The sole provider
RIM sells BlackBerry’s and soon, RIM will sell their tablet, the Playbook. RIM sells their BES platform and CALs for their BES platform. That’s it. Roughly all of their revenue comes from hardware sales, software licenses and premium support agreements (with some gravy from AppWorld). Give or take, that’s it. That is their disadvantage.
Apple was born from PCs, has a line of successful laptops, owns the MP3 market, has sold 50 million iPhones and 17 million iPads. Apple generates $1 billion per quarter from iTunes and $3+ billion in retail revenue from their stores.
Microsoft has multiple billion dollar products from Windows to Office to Servers and databases to games and consoles – just to name a few.
Google is the worlds largest and most successful search engine and advertising company with a reach into every household on the Internet.
The difference is in the difference
The advantage these other companies have is that mobile – hardware and software – is not their sole source of income. They are in a position where the other lines of business can offset their mobile initiatives until they become profitable. In essence they have time and play money.
RIM made the move from enterprise to consumer and it worked for them and, with their move into the tablet space with the QNX operating system, they are starting to diversify and that can only help. Relying on a single product line for all their revenue for so long has been to their disadvantage and they are finally realizing that in order to compete with companies whose revenue is spread across multiple products or businesses they need to do the same.
Netbooks and beyond
There is one rumour that I’ve heard in the past number of days that RIM is looking at building out additional hardware, bolstered by their recent QNX and TAT acquisitions. This makes sense if they are to continue to compete with the likes of Apple, Microsoft and Google – they need to generate revenue with other products by creating additional value to their current install base – this is not rocket science and there are lots of companies where the BlackBerry is embedded. My only wish would be that they innovate and not do what they’ve done so many times since the iPhone was released – duplicate.
I’m not as down on RIM as other analysts. Writing them off seems premature. They just don’t have the years behind them an Apple or Microsoft do – both from a product and organizational standpoint. Think of this stage as RIM’s awkward adolescence and whether they grow out of the blemishes is entirely up to the leadership, vision and execution.
I never said it would be easy…