RIM’s Nosedive

The story of RIM and its iconic BlackBerry devices reads like a fairytale – complete with a dramatic twist that leaves the hero in a sticky situation. It all started out so great. RIM essentially created the smartphone market, cornered government and business customers with its innovative network and technologies, and then finally began releasing phones for the masses. Then the competition woke up and started breathing fire.

Unfortunately, the co-CEO’s (yes, they share the CEO moniker – just about the only company in the world that has this arrangement) have not been up to the battle. That is most likely because the battle is not with one specific dragon or evil maniac – it has almost become an inward battle, with the company unable to get out of its own way to bounce back and be competitive.

Once the king in the government and business sector, RIM’s share has declined and the iPhone now commands the lion’s share of business users.

Apps

Things got worse when apps became the new hotness. Apple revolutionized the smartphone market with its App Store, and Android, Windows, and BlackBerry followed suit to try to capitalize on the trend. Due to RIM’s poor setup for coding and releasing apps, companies creating apps – the lifeblood of any smartphone, especially the iPhone, and an excellent source of revenue for their app makers and Apple – are shying away from making them for BlackBerry devices.

Julia Rivard from Sheepdog Inc., in a Chronicle Herald article:

“We’re working with a lot of large enterprises and we’re talking to them about what devices they’re using. Android and iPhone tend to be the ones industry is shifting to.”

Rivard, a former sprint canoer Olympian, said working with BlackBerry maker Research In Motion Ltd. is “a huge investment and not an easy process.”

“Businesses like ours have to decide whether an investment is going to be worth it and where to place our bets.”

Stock Plunge

More and more people are betting against RIM. Their market share is crumbling, along with their stock price. RIMM’s all-time high was 144.56 in 2008. It is now selling at 17.36. Comparatively, Apple’s stock was around 188.75 during the same time period in 2008, and is now sitting at 369.01.

So what happened to the Canadian darlings of the tech industry? There are many things that have contributed to the cracks in the foundation, but it all starts at the top with the leadership of its co-CEO’s. They were innovative – ten years ago. A lot has changed since then, and it seems RIM has missed every single major technological leap in those years.

Innovation?

RIM once said BlackBerry’s would never play music and would never have a built-in camera. They mocked the iPhone and its touch screen counterparts, saying that physical qwerty keyboards were the coolest thing since sliced bread.

“Try typing a web key on a touchscreen on an Apple iPhone, that’s a real challenge. You cannot see what you type”
(Mike Lazardis on the touch screen)

They played catch-up and quickly ate their words and released the BlackBerry Storm. The Storm was a massive failure, mostly due to its SurePress technology. It had a touchscreen, but you had to physically move the screen inwards to type or tap. RIM loves their market research, and it told them that people wanted to feel the same sensation they feel when typing on a physical keyboard. SurePress was born. The Storm 2 was the same phone, only faster. It, too, failed.

When they finally released a touch screen phone, they again relied on their market research. The result was the Torch, a fairly thick and heavy phone that sported a touch screen and slid to reveal a physical keyboard. It under-performed in the marketplace. It was also oversold, especially the operating system. OS 6 was supposed to be a giant leap forward for the company. It added a few features and fixed some issues, but somehow RIM had created a cutting-edge OS that looked dated when compared to iOS, Android, and even Windows Phone 7.

Again, app makers had a tough time with RIM’s development platform. To read how abysmal the process was (and still is), read developer Jamie Murai’s piece entitled “You Win, RIM! – An Open Letter to RIM’s Developer Relations.” It’s just sad. And since that letter, RIM has released another iteration of their OS, version 7, as well as their tablet platform, and they have also stated that soon Android apps will run on their tablet. Speaking of said tablet…

PlayBook

“Amateur hour is over.” This may go down as the biggest case of foot-in-mouth in the tech industry. The PlayBook was a flop. It was universally panned. Software updates failed to make it any more desirable. It shipped without e-mail, contacts, calendars, and BBM. If you had a BlackBerry, you could tether it and access those things, but you could not use the tethered internet access to access any other apps, except for the Bridge Browser, which was slow and clunky. All of this after RIM initially denounced the iPad as a fad, and then came out swinging saying the 7″ format was the way to go and that the PlayBook would be an iPad-killer.

Several people held on to the fact that, on paper, the PlayBook seemed to out-spec the iPad and similar tablets. Things always look different on paper. In real-world usage, the PlayBook limped along due to poor underlying software. Somehow, RIM took a great piece of software engineering in QNX and sucked the life out of it. The PlayBook was DOA and they are now selling for $199CDN – a fire sale if ever there was one.

An entire book could be written on the failure of the PlayBook and how wrong RIM got it. It is enough to say that the company’s internal issues resulted in the most public display of failure they’ve produced yet. And its name was the PlayBook.

Pricing

Interestingly, most consumers believe the iPhone is the most expensive phone on the market. Most of the time, there is an Android device that is priced higher. More surprisingly, there is also usually a BlackBerry selling at a higher price. There has yet to be a BlackBerry phone released that was the fastest phone on the market at the time, and yet RIM has consistently priced their higher-end devices at points above more powerful and desirable phones. This was something they used to get away with when dealing with businesses and government because they were the only game in town. Nowadays, it’s just baffling. The Curve and Pearl and other consumer models are usually quite cheap, but their Bold and Torch models are always pricey.

As of the writing of this post, the Bold 9900 is selling at $169.99CDN. The iPhone 4S is $159.99, and top Android phones like the HTC Amaze and the Samsung Galaxy S II X are selling for around $100.

RIM isn’t competing on performance, software, apps, media integration… or price.

Naming and Marketing

As a little aside, RIM’s naming scheme is baffling. Maybe a four-number-based system worked when their devices were only used by governments and CEO’s, but now that they are catering to the consumer market, names like the Curve 9380 don’t really roll off the tongue of teenagers, soccer moms, or retirees.

Add to this the fact that they have multiple models of the same phone and it just gets worse. For instance, the Torch 9810 is a revamped version of the first torch, but the Torch 9860 is a completely different form factor that forgoes the slider concept and the physical keyboard. Similarly, the upcoming Curve 9380 will be all-touch, but the current 9360 model is the familiar QWERTY format. Confused yet? How about the new Bold 9790 vs the fairly new 9900? Read CrackBerry for the breakdown, because I can’t keep them all straight.

While I do think the naming of some Android devices is getting out of hand (Samsung Galaxy II S X, anyone?), most of the Android and Win7 devices have decent names that set them apart. The main issue with Android is the sheer number of manufacturers and models – the fragmentation is a real issue and while it helps market share, it dilutes the Android experience and thus the brand.

Let’s look at iOS devices since Apple’s introduction of the iPhone:

iPhone, iPhone 3G, iPhone 3GS, iPhone 4, iPhone 4S

Five phones, three form factors, four OS updates that were major overhauls or added significant new features and that could usually run on models that were one to two generations removed.

This article breaks the issue down nicely – “If I Ran RIM: I’d Focus!” And here’s a partial list of phones released in the same timeframe:

P-9981, Bold 9930, Bold 9900, Torch 9860, Torch 9850, Torch 9810, Torch 9800, Bold 9790, Bold 9788, Bold 9780, Bold 9780, Bold 9700, Bold 9000, Style 9670, Bold 9650, Tour 9630, Storm2 9550, Storm2 9520, Storm 9530, Storm 9500, Curve 9380, Curve 9370, Curve 9360, Curve 9350, Curve 9330, Curve 9300, Pearl 9105, Pearl 9100, Curve 8900, Curve 8530, Curve 8520, Curve 8350i, Pearl Flip 8230, Pearl Flip 8220

Yikes. 30+ phones, 12+ form factors, and most OS updates added little of any consequence and would often not be available at all on anything but the latest phones.

Outages

RIM’s network has been their key selling point since its inception. It is a massive, complicated, innovative bit of technology that powers their push e-mail, data-saving website minimization, and their piece de resistance – BBM. It’s also secure. Their network, and their network alone, is responsible for the dedication to RIM by huge companies and governments. It has nothing to do with the devices, the keyboards, the apps, or the UI. Let’s not forget that most computers in the world are still running Windows XP – IT departments like to stick with what works and they couldn’t care less what the user experience is like. Thus, RIM has been able to sit back and enjoy massive profits while churning out boring phones and lackluster software.

But what happens when the network goes down? When the reason anyone anywhere owns a BlackBerry fails? Bad things. E-mails don’t go through. BBMs sit in your outbox. The web grinds to a halt. People get angry – and they can’t play Angry Birds to allay their frustration because it’s not available on BB OS.

For several days last month, millions of people had a useless brick in their hands. The BlackBerry network died, possibly due to a switch or router in the UK, and people were not happy. Once it was restored, RIM offered a slap in the face – a credit for apps. You know, the apps that most regard as inferior to the Android and iOS counterparts? The ones developers don’t want to make and users don’t want to buy? Yeah, those ones.

Apple recently released the iPhone 4S with its voice command service, Siri. Siri is in beta, and a few times since its release, the server has gone down. Some people are comparing Siri to the BB Network and saying outages can happen to anyone, even the mighty Apple. But let’s be clear about this: when the BB Network fails, most communications on the BlackBerry are caput. When Siri fails, you can’t ask her if you need an umbrella. Not quite the same ballpark, folks.

So…

So what needs to happen for RIM to be successful? They need to take a serious look at the number of products they sell and focus. They need to put their energies into making BBX (the new OS that’s a cross between QNX and BB OS) truly innovative. They need to consider all the things their CEO’s immediately pass off as fads. They need to focus on the user experience. They need to rename their devices. They need to split up their co-CEO’s.

There was a so-called “Open Letter to RIM Senior Management” that was floating around the net earlier this year. The writer complains that it is all about the culture and that every decision is mired in politics and the personal meanderings of its co-CEOs. That working for RIM is depressing and that it is going to take a major sea change if RIM is ever going to get out of their rut and be a market leader again.

RIM’s response was sad. It pulls out numbers (“3b in cash and no debt”), and instead of taking the time to be humble and admit RIM needs to make changes and that it understands its issues and is working to solve them, they decide to take a defensive approach (as they have a million times), and spout claims that international sales are up, and really says nothing at all.

RIM: Over-promising, Under-delivering, and Hiding Its Head in the Sand Since Apple and Android Had the Audacity to Compete.

Here’s hoping they wake up and make some major changes for 2012.

Author: Matt

My name is Matt. I live in Nova Scotia, Canada. I am an educator, a photographer, and a lover of all things technology. Check out the About page for more information.

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