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Where does Research in Motion go next?

Where does Research in Motion go next?

RIM LogoMike Lazaridis and Jim Balsillie, founders and co-CEOs of Research in Motion (RIM) resigned from their positions on the board recently, amid investor concerns that the mobile device brand was quickly losing ground to their competitors. Lazaridis was quoted by PC Pro Magazine as saying ”There comes a time in the growth of every successful company when the founders recognise the need to pass the baton to new leadership. Jim and I went to the board and told them that we thought that time was now.”

RIM made a huge splash in the US in 2003, with their BlackBerry device, and maintained their foothold on the mobile device industry until only recently. The BlackBerry was originally designed as a convergent device, with a combination of cellular and internet services, that was created to fill the growing needs of politicians. Interestingly enough, Senator and former Presidential candidate John McCain played a very large role in the development of the device. It was thought that many people would benefit from its use, but it was designed to be comfortably used by older generations of people who weren’t necessarily tech savvy. The name “BlackBerry” became synonymous with the convergent device idea in-and-of itself. Even when other competing products came out, many still called them a BlackBerry so they wouldn’t have to explain what it was. The BlackBerry spurred a revolution that continues to change the face of electronics to this day. It could be argued that all modern smartphones today were inspired by what BlackBerry started.

One of the BlackBerry’s most popular features was its input interface that used a technique called “thumbing”. The device was designed to be held in your hands while you used your thumbs to type on its keyboard, and soon adopted a thumbable mouse-like dongle for navigating the screen. Given the proliferation of multi-touch devices, loyal BlackBerry users to this day still laud the phone’s ability to be used with one hand. That, however, was not enough to persuade the massive arena of electronics buyers to use it.

This news may not have been a complete surprise to those who watch the mobile device industry carefully, and it serves to show how fiercely competitive it is. Their first real competition came from Apple, with the introduction of the iPhone—which boasted a touch-screen and had similar qualities to its predecessor, the iPod. The Apple iPhone has remained popular to this day, setting the landscape for the future of their own product line, as well as their competition’s. More recently, the industry’s attention has turned towards Google’s open Android platform, which runs on devices manufactured by a multitude of electronics companies, and now leads the pack of mobile operating systems in the number of smartphones sold.

Tablets

PlayBook

The RIM PlayBook

Both Apple and Google have also seen great success with the proliferation of tablet devices. Tablets were a very big focus at this year’s CES, but a realm that RIM had utterly failed to breach. Their only attempt at making a tablet was the BlackBerry PlayBook. Its downfall was that the original implementation only ran apps that were created for the Adobe Air platform. Later it would merge with BlackBerry OS as well as gain support for Android apps, and the Android App Market, but none of this was enough to win over customers—a classic case of too little, too late. RIM not only lost a lot of money, but took a huge blow to their reputation through the bungling of the PlayBook tablet product launch.

RIM had recently acquired a company called QNX, and was interested in using their mobile device operating system for the next generation of RIM devices. They have had difficulties making this operating system stable enough for consumers to use, but RIM is still committed to using it, despite delays.

On being third

Much like HP’s WebOS, RIM maintained a small but strong following of loyal users. This presents a very curious outlook for the world of mobile device underdogs. The resignation of their CEOs is a clear sign that RIM has admitted defeat to Apple and Google. In order to become viable again, they are going to have to virtually start over from scratch. Apple and Google are very powerful companies, with a lot of capital and a lot of momentum already behind them. There is a large void in the “third place” slot that is just as open to any other mobile electronics developer as it is to RIM. We may never see the day when even a niche product emerges that can put a dent in Apple and Google’s all-encompassing business model. To do so, it’s likely they would have to offer something that neither company, with all their talent and resources, has thought of yet, that also appeals to a massive group of people. Usually that doesn’t happen when doing so would be considered “Re-inventing the wheel.” Simply “doing it better” would not be enough to catapult a mobile electronics developer into the mainstream. Apple and Google would likely respond quickly.

That being said, they can build off of their current name recognition going forward. The companies that are making bold and often controversial decisions seem to be the ones that are having the most success. The resignation of their founders is a bold move that is definitely a step in the right direction, and sure to to shake things up a bit at RIM, but a hard look at the future of their products is going to be necessary to find a clear vision. In order to move forward, they are going to have to think forward and stop looking back. They have to re-invent the BlackBerry brand and come up with a new idea that they can attach to their brand.

Perhaps this new direction could be to shed the proprietary nature of their devices. This is where both Apple and Google have seen most of their success. Apple products have a level of integration that no other brand can compare. Google relies mostly on open standards to provide integration. Focusing on a product that can integrate with a large number of products, including their competitors’, seems to be a big part of their strategy. I mentioned in my last article that I was surprised to see that companies were more focused on competing individually with popular devices, rather than focusing more on integration. This presents a logical path that RIM should seriously consider taking.

This could be achieved without sacrificing the strategy that pushed RIM to being the company they are today. That is, to focus on doing one thing specifically, and doing it very well. In 2008, RIM made the headlines for working with Secret Service to design a device that would be secure enough for the President to use. This further cemented the foothold they already had in the corporate, enterprise-driven electronics sector. Perhaps they could continue to focus on secure, corporate-ready devices that have a higher level of integration with other enterprise solutions. RIM was never good at marketing to consumers anyways, and they simply don’t have the capital or resources to compete with the marketing arms of Apple and Google. A more B2B approach to marketing may be a good way to build on the success they’ve already had.

While reading back through this article, I realize that it reads more like a eulogy than news analysis. I hate to leave you with the impression that RIM is dead, so I’ll be politically correct and say that the company just isn’t alive enough for long-term viability at this point. Rest assured we will see many more electronics developers come and go. That is the nature of this business, and it is why electronics still remains one of the last true free enterprises we have left. It is clear, however, that mobile device enthusiasts will continue to watch the developments at RIM with a close eye.

Comments

  1. Thrax
    Thrax With the supreme corporate arrogance RIM has demonstrated over the last 5 years, they deserve to go under.
  2. pigflipper
  3. Lincoln
    Lincoln My immediate thought upon reading the title was "Chapter 11 bankruptcy". Someone wrote a compelling case for a Microsoft purchase the other day. The CEOs were several years too late in resigning.
  4. PirateNinja
    PirateNinja This is very accurate, and small portion, of a larger analysis I did on RIM less than 2 years ago:
    http://knol.google.com/k/dan-siebes/the-future-of-rim-blackberry/3hp472l8bqpdu/8#

    At the time their financials were extremely strong and if you actually read that mess you will realize that the reason they blew it in 2009/2010 is because they took their money and dumped it in to acquisitions of patents and small companies instead of new product R&D.

    They didn't lack foresight, they just made that shitty strategic decision because they thought what they offered was unique and could not be reproduced without direct licensing of what they owned. Major screw up on their part.

    I don't see them going bankrupt. I do see them getting bought out or broken up and then bought out.
  5. Annes
    Annes How interested in the stock market are you, PirateNinja? Should we talk?
  6. Evelon277
    Evelon277 BOLD move... I see what you did there.

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