RIM, the maker of the popular (well, historically, anyway; read on) BlackBerry line of products, and one of the firms that essentially defined mobility as we know it today, has been all over the financial news for months. The company’s stock has fallen dramatically (it was around 145 only a little more than a year ago, and it’s around 22 as of this writing, having fallen almost 19% just last Friday), and sales and more importantly market share and earnings are down. The forecast is hardly rosy, and yet the company says all is well and they’re working on it. After all, they have 67 million users worldwide and sales are growing in emerging and developing markets. The situation, though, is no longer as simple as a new product line, adjusting pricing, or any single corrective action. Rather, a fundamental shift in the dynamics of the mobile market could indeed leave RIM in the dust – but I don’t think the outlook is necessarily as dim as many Wall Street analysts posit.
RIM, of course, is synonymous with mobile e-mail and handsets with physical keyboards, and became the corporate standard for messaging over its very long history in mobility. The company was historically innovative (among the very first to build handsets in a PDA package), and the combination of a stylish (for its day) handset, BlackBerry Enterprise Server (crucial to success), and a focus on over-the-air security proved irresistible for organizations across the globe. BlackBerry, in fact, was a verb long before Google was.
But with the company clearly in decline, and few kind words from the financial types, it’s far more likely today to hear comments about the firm being toast than what strategies might in fact serve them best in a market that bears little resemblance to that of the firm’s rapid-growth days only a few years ago. They’re trying, but the Playbook tablet (really, a pretty good product) has seen disappointing sales, mostly due to a rather incomplete initial feature set, and a new BlackBerry OS isn’t exactly setting the world on fire (I’ve written before about why OSes really don’t matter today). Gee, this all looks a lot like Nokia’s current mess, doesn’t it? Being different just to be different isn’t a winning strategy.
Perhaps the biggest challenge is inertia, the narcotic-like embracing of which I see all the time among industry leaders. Analyst briefings here are rather like attending church, where questioning the gospel would be in bad form at the very least. But every time I see strong pushback when analysts ask the tough questions, well, that’s at least a pink flag for me. Failure to face reality (in this case, the iPhone and especially the Android tsunami, but also lots of challengers to BlackBerry Enterprise Server) is the problem – as they say in the investment world, past performance is no indication of future results. RIM just hasn’t been competing for a very long time.
And the latest challenge is the consumerization of IT, AKA personal liability or bring your own device (BYOD). Corporate sales are going the way of RIM as #1, so the company needs to get with the program here. But so far, they’re making, IMHO, the same mistake as Nokia – again, being different just to be different. Apple worries about entire end-to-end ecosystems (content and delivery vehicles), but without much real meat for the enterprise. RIM is the opposite – lots of enterprise features, but little consumer appeal.
But all is, again, not bleak. It’s important to keep in mind that RIM still has a huge installed based with a broad (but certainly not universal) vested interest in maintaining how things are done today. Sure, the iPhone and Android (and even Windows Phone 7) are far more sexy and enticing than BlackBerry, and perhaps even a BlackBerry based on the QNX OS, but corporate handsets, and even personal handsets used in a corporate environment, need to be all about utility and mission-specific function, not cool or sex appeal. And while the consumerization of IT/BYOD trend is clear, there’s no overnight shift going on here. RIM has time to get it right.
The prescription, though? Make needed changes in senior management (overstaying one’s welcome usually leads to this kind of result; new thinking and the jolt this delivers can be quite beneficial), think consumer in handsets, forget custom OSes (I’d suggest RIM drop QNX and lead the charge for a webOS consortium as an alternative to Android, or at least no go with a proprietary OS), enhance marketing (more management changes), open server-side products to all comers, get into mobile device management in a big way, and beef up the perennially-anemic developer program. The key is in providing end-to-end mobile solutions for enterprises (perhaps even in the SaaS domain) that really don’t want to be integrators anymore; they have neither the staffing nor the budgets for this. The trick will be in building these solutions so that they work with a large number of handsets, but just a little bit better with BlackBerry handsets. How about mobile unified communications? Sure, they’re already part of the way there with MVS. RIM has the talents and resources to build great hardware; no problems there – and, yes, physical keyboards will remain popular with many. But it’s time for a shift in focus to counter the new world that Apple and Android have built. And that means building on historical strengths up the value chain to solutions, not just cool handsets. No single firm is pursing this strategy today, and yet that is what organizations want to buy.
So opportunities for RIM do indeed exist – but will they take the bold steps required here? I think they will. In fact, I think BlackBerry will remain #3, after Android and iPhone, and making the right decisions will enable them to maintain that position for quite some time. But the operative word here is in fact time – this is a classic turnaround situation, and it’s now or never.