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Is the BlackBerry Dead? A Look at RIM’s Descent

Behold Research in Motion (RIM), the once mobile giant and Canadian prodigy.  Not too long ago, RIM called itself a dominant player in the cutthroat mobile phone industry.  Through secure corporate partnerships, RIM was once a successful and confident smartphone manufacturer.  Headquarted in Waterloo, Ontario, RIM was both a source of pride for oft-ignored Canada and a celebrity of the tech world.

And then came the iPhone.  The iPhone revolutionized the mobile industry by redefining what a smartphone could be.  No longer for the corporate workhorses, a smartphone was now and forever cool.  The iPhone was something to desire.  And the BlackBerry was not.

Rather than adapt and compete like so many other tech behemoths, RIM has floundered.  And in the last two years, critics and consumers alike have increasingly predicted the failure of RIM as a whole.  Recent news has not helped to reinstall confidence.  CEO Thorsten Heins has announced that the BB10 operating system, intended to revolutionize the BlackBerry platform, will be further delayed to an early 2013 launch.  In addition, fiscal reports released on June 28th reveal staggering losses: revenue down 33% from last quarter and 43% from this time last year.  So, is this truly the end of RIM and the BlackBerry?  Read on to see.

A Flawed Business Model

Balsillie (left) & Lazaridis (right) (source: http://bit.ly/MOFwpH)

Ten years ago, RIM’s business model meant great success.  Led by co-CEOs /co-Founders Mike Lazaridis and Jim Balsillie, the pair secured RIM’s initial success through a working knowledge of the corporate environment.  The team’s confidence brought stability, while their products flowed directly to corporate users around the world.  The BlackBerry might not have been cool, and it might not have appealed to all consumers, but it got the job done for millions of business users better than any other product.

This same business model has also led RIM to its current state.  As the iPhone made the smartphone a cool product, RIM effectively shrugged its shoulders and said, “Well, we’ve got corporate on our side.”  In addition, the once confident team leaders became increasingly resistant towards necessary innovation.  The corporate culture at RIM meant inefficiency and a lack of forward-thinking ideas.

And, even more astoundingly, RIM has only recently realized the issue with this model.  Only in January of this year did RIM replace its co-CEOs with now leader Thorsten Heins.  Yet, Heins has been part of the inner-circle of RIM for years and Lazaridis remains on the board.  While many hoped for a regime change that indicated radical thinking, much has remained the same.  RIM had a chance five years ago to stay competitive in the smartphone market by competing with the iPhone from the outset.  But they have only just started.

A Flawed System 

Source: http://bit.ly/MOFzC1

Along with a faulty corporate environment, RIM also marketed an increasingly faulty system in the BlackBerry.   Apple, Google, and Microsoft all have helped change what a phone could be; yet RIM still maintains the same hardware/software model.  RIM did not need to please consumers and developers: their robust email capabilities and hardware keyboards would always attract business users.  So they didn’t.  RIM has been notoriously awful to work with as a developer, their operating system remains relatively unchanged, and their tablet was underwhelming.

At first this plan worked.  But as iOS, Android, and Windows Phone matured and the bring your own device (BYOD) movement took hold, RIM started to lose even in the corporate world.  RIM has recently begun to recognize some of these faults by creating a new operating system: BB10.  Meant to rival iOS, Android, and Windows Phone, it will be optimized for touch and tablets.  However, BB10 has been consistently delayed.  And, it is based upon QNX, a platform not even meant for mobile phones.  Overall, RIM’s most recent attempt to fight back has proven lackluster.

 

RIM Needs to Take Some Risks

Over at Slate, I think Farhad Manjoo gets it right when he writes that to survive, “RIM should try something radical.”  And in the current scheme of things, there are only two real options.  First, RIM can continue pushing BB10.  But, by the time the OS unveils in early 2013, the smartphone market will be even more solidified than it is today.  With three mature operating systems already in play, RIM would need to truly revolutionize the field the way the iPhone did in order to make a dent.

Second, as Manjoo proposes, RIM could go the way of Nokia.  Rather than push its own failing system, RIM could solely focus on producing hardware.  RIM is definitely good with hardware.  RIM has proven to produce durable products, and could build a name for itself once more by bringing design quality to the variable fields of Android and Windows Phone.

The latter choice is indeed radical.  And, while it could prove successful, it is most likely too risky.  Knowing the current atmosphere at RIM—overly-optimistic in a way that is borderline denial—such risks seem adverse to Heins and the board’s plans.  To succeed, RIM needs a game changer.  Come 2013, BB10 better be unworldly good in order to prove competitive.  But I, along with many other watchdogs, am not hopeful.  I fear that RIM will produce yet another lackluster product.  And if that happens, failure will almost certainly ensue.  Although a slim window of success looms, I feel that this time next year RIM will have fallen in spectacular fashion.

Billy Ceskavich

Billy is an Engagement Fellow and Masters candidate in the iSchool's Information Management program. He's an avid fan of consumer technology and the startup space, having worked in the industry both in Syracuse and Silicon Valley. He's active on Twitter (@ceskavich) or can be contacted directly via email (bceskavich@gmail.com).

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