Can RIM be saved?

David
David Lynch
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BlackBerry maker suffering from classic hubris marketing mistake

Research in Motion named a new CEO last month, and there is talk about other key hires as well. This is a great first step, but may fall short of what is needed to save the company.

(Stock image)

Let's face it: RIM fell afoul of that most common of successful company diseases: hubris. And it fell badly.

The company was a tremendous innovator in its time. We take mobile messaging for granted now, but as little as a decade ago it was just a dream. RIM turned it into reality, making mobile messaging and e-mail ubiquitous and rocketing RIM into a leadership position.

But the world, as it frequently does, moved on. RIM, however, did not. Staying locked into a single paradigm, the company ignored anything that didn't fit into its view of the world. RIM made the classic hubris marketing mistake: convinced that because it invented it, the company's way was the right way.

RIM officials dismissed the iPhone in 2007, and continued to do so despite BlackBerry users jumping ship, to the point that BlackBerry has slipped to No. 3 in the U.S. smartphone market.

More importantly, RIM not only dismissed the competition, but also failed to recognize the underlying market trends that were eating away at its competitive strength:

1. The increasing power of the end user to decide on technology

IT is no longer calling the shots when it comes to smartphones in the workplace. Some of this is due to recession-based cost cutting, but mostly it's due to the increased flexibility of IT infrastructures to deal with hybrid models and products and the wide variety of productivity tools available to the different classes of users.

2. The diminishing value of mobile security

Corporate IT traditionally liked the BlackBerry because of its strong security. But in reality, a lot of IT groups have come to accept the level of security in iOS, and what is slowly emerging for Android phones, as "good enough." There are, of course, still large pockets of the market that still feel they need the extensive security and control provided by the BlackBerry Enterprise Server, but these are being continually eroded into "good enough" environments.

3. The increasing value of personal applications

The introduction of inexpensive smartphone apps for business and personal use is a market wave that changed - and is continuing to change - everything. The combination of thousands of dedicated application developers and highly centralized app marketplaces truly means that there is an affordable "app for that"... as long as your phone is supported.

The smart phone guys (pun intended) made sure those app developers had everything they needed to provide apps for their phones. And increased their market share.

These market forces have made BlackBerry's traditional unique strengths less relevant to today's users. There is still a subset of the market that needs the security strengths of a BlackBerry, and duplicating those in iOS, Android, or even Windows Phone won't be easy. That gives RIM a window in which to play.

To be fair, I suspect that at least some elements within RIM belatedly came to the same conclusion more than a year ago, when the firm announced it would drop its legacy BlackBerry platform in favour of the QNX operating system it had purchased. But given the length of time it's taken to actually do anything with it, I doubt it had complete support within the company.

I talk about hubris as a corporate disease, because that's what it effectively is. It's very insidious, and usually starts with a level of confidence following successful growth. This "we can do no wrong" attitude at the top very quickly spreads throughout the organization.

It frequently takes a shock to the system to even diagnose it; sometimes it's a new leader with a different point of view, and sometimes, as with RIM, it's slipping market share. It can be cured, but the treatment requires a change in organizational culture. It requires a new vision, a lot of effort ... and time.

The QNX-based BlackBerry 10 OS is going to be critical. It has been delayed until late 2012, which hopefully gives the company time to get it right. Too many of their recent products have been rushed to market and suffered for it.

I wouldn't write RIM off just yet. If the new management team can truly get the organization refocused on the market - and not just products - and if the investors give them the runway to do it, then the company has a chance.

If not, we can expect to see RIM sold for parts.

 

David Lynch is founder of The Fios Group and former vice-president of marketing at Embotics Corp.

Organizations: BlackBerry Enterprise Server, The Fios Group, Embotics

Geographic location: U.S.

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Recent comments

  • denny cranium
    February 13, 2012 - 12:21

    It's articles like this that just kick Rim when they are down. It's now popular for the media to say RIP RIM. Its writing like this that just feeds the media frenzy at predicting (and even calling for) the death of Rim. Rim has lost market share in the US due to the explosion of cheap low end Android phones that the teenagers have picked up to basically Facebook and play Angry Birds. A lot of these Android phones are on MVNOs on prepaid plans. People who buy Apple are only going to buy Apple. It's interesting that Apple's issues barely get a mention in the tech media. (Apple got hacked, reception issues with the iphone etc.) You also failed to mention that Rim is enjoying growth in the UK, India, the Middle East etc. The BlackBerry is the number one smartphone in the UK. BlackBerry has the lowest failure rate of the 3 platforms available. Rim's security is second to none in the smart phone business. The best hackers can't defeat it. Yes Rim needs to come out with phones that cater to the consumer market and I feel that they are doing that. The devices with the latest 7.0/7.1 software are being well received. The CEO of At&t in the US wants "to see Rim succeed" As Rim is still the crown jewel of the Canadian tech industry all Canadians should do what we can to support them. Please show some journalistic leadership and tell the whole story regarding Rim.

  • Bill G
    February 11, 2012 - 11:46

    I thought the article would offer some insight as to possible solutions for saving RIM. But instead, it was all about the current problems of RIM which everyone knows already.

  • MArtinJdub
    February 11, 2012 - 11:41

    People keep saying RIP RIM but what they forget or don't knpw due to poor media coverage is that RIM is making profit every quarter, their user base is growning despite losing ground in the US and have zero debt. People oftem forget that "the market" was only 200,000 million people strong 4 years ago of which RIM had 70%. The market now is 2 billion people of which RIM has (depending who you believe) 10-20%. Now tell me, what is the bigger and better market share? Yes, their stocks have flopped but this is not due to "market share" but poor forecasting my Co-CEO and a poor tablet launch (which is now a solid product)and a medi that has turned on them. It bothers me to see other Canadian wish poorly on RIM. Sure, I hate the Maple Leafs but I don't want them to be baught, dismantled and moved to Talahassey. Long live the RIMpire.

  • Philippe Marion
    February 08, 2012 - 21:16

    Thank you for this very well detailed analysis of the situation behind the eyes the market positionist expert :-) It might just help me hanging on to my BB for a few months...... Keep us informed David! Cheers

    • michael di rienzo
      October 11, 2012 - 15:45

      Before embracing uneducating opinions or predictions about Rim's imminenet death, ready this interview and then re-evaluate the opinions of the shorts......http://rapidberry.net/thorsten-heins-blackberry-10-main-priority-will-shift-focus-to-mobile-computing-later/

  • Bud Lawrence
    February 08, 2012 - 16:59

    Hi Dave, you captured and articulated the key issue's RIM is facing. RIM is now in a "fight for their life", and RIM's odds of surviving are "slim and none, and slim is boarding a bus to leave town". The new RIM CEO has a very short runway to make RIM a relevant and preferred technology provider, a good choice for investors, and a place where top talent wants to work. The stampede to leave RIM is gainig speed, everyone I know, including myself, have left RIM for other providers. I would not be surprised to read RIM's obit in Clayton Christensen's next book on failed companies. Take good care, and keep writing great articles.