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RIM reports Q4 miss; Balsillie resigns as director, CTO out (bgr.com)
89 points by CitiiDB on Mar 29, 2012 | hide | past | web | favorite | 53 comments

RIMM made some major mistakes but was too arrogant as the market leader to take the competition seriously.

1) They Osborne'd their product line by prematurely showing off new products that weren't ready.

2) They tried to meet the iPad head-on in the consumer market by calling their device a Playbook but their strength is in enterprise. Thus the marketing message came out confused and having a pompous "Amateur hour is over" campaign sealed their own fate.

3) Repeated, worldwide BBM network failures that went on for extended periods of time, alienating its most loyal customers when RIMM needed them the most. This was their core competency and they neglected it. Having alternatives on competing phones like iMessage, WhatsApp etc didn't help.

Talking about terrible marketing: they're running an aggressive television campaign in India right now showing a bunch of singing business men in suits chiming "We are the blackberry boys...." http://www.youtube.com/watch?v=LducWACdt88

This is one of the most obnoxious, male-centric ads I've ever seen and would never float in the west. Sure it's India... but it's sad that a western company thinks it's cool to run something that doesn't fly back home in S. Asia.

Oh please. I often see female centric ads on western tv and I dont get offended.

I am not sure about sexist angle but this clearly shows that blackberry have gone berserk.

They are trying to change their business centric image by alienating last remaining business users without having a foothold in consumer market.

In hindi there is an old saying "Vinash Kale Viprit Budhi" which roughly translates to rational brain stops working when end is near. :)

I think their biggest issue isn't any of those things. It's that they don't have modern phone SW and an app ecosystem. If they had adopted Android for the app ecosystem and the modern OS, then made a semi-secure version, they could've survived all those gaffes above.

Witness failure: many people even 2 years ago said the co-CEO's need to either clean up shop or walk out... now that RIM's market is entirely ceded to Android/iOS... NOW they start shaking things up?

Chances are, RIM will never be great again - they lost their edge, then sat on their hands for years living off yesterday's big hits. Question is, do they have anything that a acquiring company might find worth purchasing?

I'd argue their hardware is still better designed than that of most Android vendors, especially for text input speed and accuracy. Where RIM went wrong was underestimating the importance of software and the surrounding ecosystem. Their App store was dreadful.

Incidentally, this is perhaps where Nokia did the smart thing by recognising similar weaknesses in their software strategy, and teamed up with Microsoft.

Imagine a world where RIM had licensed Android 2 years ago as their primary OS for all current BlackBerries. They would probably be the world's number one phone vendor right now.

Reminds me of a line from one of my favourite authors:

"Maturity...is knowing what your limitations are".

> Where RIM went wrong was underestimating the importance of software and the surrounding ecosystem.

RIM is quickly discovering that it is not a software company -- and never has been. They are also discovering that software is hard and is the future of mobile.

I say this as someone who was happily employed there a little as three weeks ago (I left to join a startup -- and yes, I absolutely loved my job at RIM). They have some good people but the majority of upper management is lost without a map.

They opted to create another mobile OS/ecosystem. The talent is certainly there, but the time is quickly running out. Apple has been working on iOS for years. Microsoft has been in the OS business for decades. Android is based on Java which has countless man-years behind the tools. RIM is working from QNX which is nice, but is not a full-blown OS/toolchain. There's a lot of work to do there; they've really only been at it for less than a year.

And let's face it: BBOS was something only its mother could love.

The only thing preventing them from being great again is institutional inertia. They still have a lot of sales, a strong enterprise footprint, brand and sales force. And they have a lot of users hooked on physical keyboards.

If they could just turn on a dime, they could easily own the enterprise market again by co-opting a modern OS with an app ecosystem (Android?)

"The company also said that it will dial back efforts in multiple consumer markets and refocus its efforts on the enterprise market." -- I think this a smart move because they make business-oriented devices, not entertainment devices, but it might be too late.

I don't think it's ever too late in a tech market as long as your company still has enough funds to launch and market one more product. After all, if you'd looked at pre-iEverything Apple a few years ago and claimed they would be the most valuable company in the world today, most people would have laughed.

That said, RIM clearly has an uphill struggle ahead of it. They need a smash hit, which means they need people with vision at the top. They have limited funds for repeated attempts, so unlike the Microsofts and Googles of this world they can't afford to keep throwing stuff at the wall until they find something that sticks. They've had a string of PR and management disasters in recent years, which matters far more to a business-based market than to consumers. And with the likes of Apple, Google, Microsoft and Amazon all now heavily invested in mobile technology and competing for most of the biggest market segments, it's going to be tough to find a niche that is small enough to make a defensible foothold and yet big enough to expand out into a serious player again.

My guess is that they need a new kind of device, some novel form factor or combination of features that creates or brings credibility to a whole new market the way Apple has done more than once. There are pain points with a lot of the current generation mobile devices, and in particular those devices that rely mostly or entirely on a touchscreen are always going to be primarily consumption devices, which means mobile content creation is an area with potential. RIM actually has a very good track record of, for example, combining real keys (albeit mini ones) with great displays (before the turkey that was the Torch, the half-height displays at the top of high-end Blackberry phones were pushing the resolution frontier long before Retina came along).

Another possibility, and one that is not mutually exclusive with the above, is that RIM could aim for a clean, professional, businesslike UI. Not everyone wants Facebook integration and iFart apps. Personally I don't even want those on my personal phone, and I certainly have no interest in having them in my business devices. On the other hand, I would love to have some mobile gear that started with basically nothing preinstalled except for an OS and comms tools, that had tools available to interoperate with whatever grown-up systems I want to in an easy and secure way, and that had an "app store" with professional software that did useful things. If the same organisation supplying that mobile gear also happens to provide useful back office products and native and/or web-based interfaces that let me talk to them from my desktop/laptop/other large-scale devices, so much the better. Again, RIM probably have more talent in-house in this sort of area than a lot of companies, if they can figure out how to harness it.

Oh, and if RIMM shares are at $500 in five years because they've cornered the "in-house cloud" market, someone please let me know so I can tell them where to send the cheque. ;-)

>I don't think it's ever too late in a tech market as long as your company still has enough funds to launch and market one more product.

This is something we see over and over again in this industry. Yet, people still don't believe it.

Remember that their whole consumer push wasn't because of a greedy desire to take Apple's cake, but instead because they saw Apple's success in the consumer market turn into success in the enterprise market. That CEO or CTO loves their iPhone or iPad, and soon and unsurprisingly their corporate policy adapts to embrace it.

patents? i'm sure apple could do with their push email patents.

they make a nice keyboard based phone. a version of android on their hardware might do well. i have heard and seen blackberries take a lot of punishment and keep going.

when they were at their height in the usa i only ever saw one customer with one here in ireland. though i saw them every day on public transport and in use on dublin streets. since they started to decline i've seen a few kids replace iphones with blackberries on prepay. mostly for texting purposes. that's a real market the touchscreen phones aren't addressing.

Maybe I'm not understanding, but there are a variety of options for touchscreen android phones on prepay here in the U.S.

i was thinking more along the lines of keyboard based android devices. rim have shown they can build heavyduty hardware that can take a lot of punishment.

I was a coop student working at RIM in 2007 when the iPhone came out. Their complacency and ignorance ensured I found work elsewhere post-graduation.

RIM's greatest issue has been LEGACY.

RIM's focus on the enterprise ensures that a large number of their staff has to build hacks to ensure their software's backwards compatibility. Forget the entire "Flash as being dated" debacle and think more to the tune of Microsoft's Exchange servers and address databases from the 80s which RIM has to be compatible with.

Naturally, companies must decide whether they want to ditch this side of the business. RIM tried to dip its toes in both. To be fair, they were trapped into supporting legacy services. Legacy isn't something that can spinned off. For RIM, they would have had to cut out a huge portion of their business to try to innovate.

By comparison, Newer players in the mobile phone space (Apple, Google etc.) didn't/don't have to deal with legacy. That's why they have such a small presence in older large enterprise. Microsoft's mobile side had similar issues to deal with but I think that their newer platform has eliminated their legacy components so there is hope.

As a Canadian, I'm very sad to see RIM die off. U Waterloo will also suffer tremendously. With SRED going away, I wonder what the Canadian tech scene will look like overall. I think I'll consolidate my thoughts on this and write a blog post or something.

This may not be a great place to make this request, but can someone write up a detailed blog post on how the new SR&ED changes are going to affect us? I would love some more perspective on this issue.

RIM will become another case study MBA students read about when discussing the Innovator's Dilemma.

It looks like the new RIM CEO has opened his first envelope.

For RIM to come back, just having a new OS (BB 10) and shiny hardware is not going to be enough.

As an aside, Nokia, a company with similar brand recognition - albeit in a different market segment - is trying to claw back into the game is using Windows Phone 7 and Lumia 800, 900 series of phones. If I see this correctly, Nokia isn't betting on just the new hardware and Microsoft's OS (and financial muscle); they are also implicitly optimistic about Windows Marketplace and other content (XBox?) gradually becoming seamlessly available across it's product range. Content and services are the key; a decent piece of hardware and a decent OS should be agiven.

The reason I brought up this is that for RIM to make a comeback, they need to be able to offer something more than Apple is offering at the moment; that's the only way to entice users away from a platform they've invested in. In my opinion, the only company that can provide RIM with an edge in content and services is Amazon.

I wonder if RIM and Amazon can cut some sort of a deal. Amazon already makes a tablet that is fairly successful; the prospect of mobile phones with the Silk browser running on them, seems quite interesting.

Have you used the Silk browser? It performs like a pig. Turning off "Silk" is the only way to use it. Even then, it is substandard, in my opinion. If I have my Kindle Fire in my hands and need to look something up online I will usually put it down and reach for my iPhone on the nightstand. It is better than nothing on a device I use primarily for reading books, but I would steer clear of any phone running it.

I should have clarified; yes indeed, Silk does perform like a pig currently, but I like the idea behind it, and I believe that Amazon has the engineering chops to pull it off.

Immediate access to the mobile phone market along with a huge amount of data that can go Amazon's way if they fix Silk, might make a partnership seem mutually beneficial. (Also, since the mobile phone market is still carrier dependent, Amazon will have a harder time penetrating that market segment on its own)

Silk has the same ideas behind it which Opera has been pushing with Opera Mini/Mobile and Opera Turbo for years. There is no reason why Amazon cannot enjoy the same kind of tremendous marketshare as Opera does.

Serious question: What viable options do they have besides being acquired?

The time for small course corrections has long since passed.

The main option for them is to become smaller, and to do one thing well. Their perceived strengths are mobile messaging (BBM) and "security". If they became a software only company then they would be at the mercy of their (fickle) partners to get it deployed. When they are playing the hardware game then there is ferocious competition and you have to do a full software stack (proprietary or adapting Android/WinMo).

In their position I would do exactly one hardware device that is a best of breed, adapt Android for it and have a layer of BBM/security on top. I'd try to get the BBM/security licensed by as many manufacturers as possible and use the own hardware as a showcase. Eventually the hope would be to get out of the hardware business - it exists purely to ensure there is at least one way to market.

There is so much to be done on the communication side with lots of half assed solutions. On the security side consider running an IT department or being a consumer and a device is stolen. Now list what sensitive information was on the device.

This. Android is posing a serious problem for businesses as people demand to BYO with phones that are a huge melting pot of unknown versions, vulnerabilities, levels of support for exchange, etc. They need to provide their stack as a virtualized system that can work on any Android handset and then have their own analogue of Google "experience" devices where they do the whole thing. They can make some serious hay out of guaranteeing updates, security and support which the Android vendors largely are either ignoring or failing at.

Yes. RIM still has a huge installed base, enterprise sales force, and is still the de-facto "secure" solution. If they could co-opt Android's app ecosystem and build a high-quality, secure Android, they could make a huge dent in the business market.

I proposed this to a RIM BD exec about 2 years ago, but he insisted it would be throwing away way too much of RIM's investment in secure kernels.

But in my mind, the battle was already lost: even most biz users aren't choosing a device based on the nth degree of security. If anything, they love the keyboard.

And for the small niche that truly needs security, RIM could keep one or two BBOS models alive.

Maybe they could still pull off such a strategy?

I see tons of BlackBerries in Mexico, when three years ago there were none. They have become an affordable phone here that works just fine for Facebook, email and chatting.

In a certain sense they are the old reliable Nokias of yesteryear.

I don't pretend to play analyst, but I think there's a huge market in producing affordable and sturdy smartphones for third world countries. To many it's their only way to get online.

I absolutely agree that there's a huge market for smartphones in the third world, but I don't see how RIM can successfully take on Huawei, ZTE and the lesser-known, even lower-cost OEMs that are already there.

Same with kids in the developed world - the uk riots were organized by BBM last summer.

They have $4.2 billion in revenue per quarter, that's huge, and they still have a lot of users. They could easily scale back their ambitions and become very profitable, abandon the playbook, reduce their workforce, move focus to East Asia, and keep milking every cent out of the old-fashioned phones they kept pumping out long after Apple ate their lunch.

Dying a long, painful and drawn-out death.

Im am not sorry about the loss to BB. They totally dropped the ball on the whole company and there brand!

Their crown jewels are its BBM framework. They should simply make a paid BBM app for iphone, android,winmo,etc. I think they will find a substantial userbase of people who would love to pay a monthly subscription to be able to.use BBM on a non-blackberry device.

Hey guys, remember: They make tools, not toys.

Too bad everyone else is busy buying phones that can do both.

"First they ignore you, then they laugh at you, then they fight you, then you win."

I find it incredible that RIM or their customers did do all of these things. In fact, a lot of the major phone companies did this, even Nokia and Microsoft.

This is the most important topic in this discussion and maybe the most topic for any startup or company in general. How do prevent your business from becoming obsolete? Is that even possible in the long run for IT firms? How about staying hungry or at least not becoming arrogant like RIM?

It doesn't matter. Everything dies.

You get hugely successful, defining a new product. You build a very effective business to capitalize on your product. The state you were operating in when you designed/built your product is by necessity baked into your business. Life, for a time, becomes Very Good.

But the world state changes. This is inevitable. You don't care — there's enough money in what you do so that changing your business just isn't rational. So you keep on keeping on, and your culture continues to grow in the direction allowed — fighting to keep the status quo, even as the rest of the world is moving on.

And then at some point, once the world state you built into your company (that has been profitable for you since day one) and the current world state diverge to the point that you can't even understand the change required, and you are going to be staring down obsolescence. There's nothing you can do. Your entire company is predicated on fitting a context that no longer exists. You can't understand what's happened, because to understand what has happened your company would have to be a very different company.

And you die.

> It doesn't matter. Everything dies.

"Why do all companies die, wheras almost all cities survive? You can drop an atom bomb on a city and it will survive".


Excellent TED talk. Thanks for the link.

I think RIM also made the fatal mistake of focusing on their competition rather than their customers. Their response to the iPhone was to build a bunch of rather crappy touch-only devices. They responded to the iPad with the Playbook.

I suspect, if they survive, the playbook will be killed off as well as any phones resembling the iPhone.

In an attempt to alleviate the craptuclar collection of software, RIM gave out free Playbooks to Android Developers.

Having now played with one I don't think it's that bad of a device, and I certainly trust it more than an iPad or Android tablet.

However RIM is missing key software that they should have provided.

1) The PDF reader works, but it's functionality is as bad as the Adobe Reader on Android.

2) The browser experience has thus far been not so bad. Things work for me on the Playbook that crash on Android browsers. A desktop mode for the browser (like Dolphins, but without the crashing) is necessary.

3) A remote desktop client?

4) A VNC client?

5) Busybox!

6) Putty!

7) Python and/or Ruby

Saying the PDF reader on Playbook works is like saying a bucket of cold water works for having a shower.

I actually enjoy reading on a Playbook more than an iPad or a Kindle. But the PDF reader is abysmal software.

3: Citrix receiver supposedly works, Splashtop is available 7: Lua is available (check on blackberry github repo) and I have seen experimental builds of Python at least.

I wonder if they'll spin out QNX.

RIM said it shipped 11.1 million BlackBerry smartphones and more than 500,000 PlayBook tablets last quarter.

I absolutely refuse to believe those numbers. I've seen noone with a Blackberry tablet and I'm surrounded by geeks at home and at work.

Spotting Android-tablets is hard enough (I have one and besides that I know one other guy IRL which does as well), but Playbooks are practically non-existent.

Shipped does not always equal sold. They could be devices sitting on a palette in the back of some warehouse.

Imagine a device with Android as the OS and RIMs amazing, bullet proof, indestructible, long life batteried hardware.

Well blackbberry you were a tech company who refuse to innovate really I only see on of two possibilities become a android OEM or fail and get Google, Apple, or some other company to buy your name and patents. It's sad because they had plenty of time, but scoffed at ever lose the smartphone wars with such a significant lead.

I don't see how becoming an Android OEM can't be a win-win situation. Blackberry keep their brand and don't have an OS to maintain (maybe just a handful of Blackberry Android applications instead).

I'm sure embracing Android would be a win for RIM, but would it be too little, too late?

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