As RIM continues to falter, it once again looks to the next generation of phones for deliverance, but it seems highly unlikely that the company can recover from more than two years of smartphone marketshare free-fall.
For some reason, rather than showing off this pivotal next-generation Blackberry phones to any journalist who wants to see them, RIM has chosen to be coy, an odd strategy given their dire straits. What does the company honestly have to lose at this point by sharing the phones? Whatever the reason, it’s just another strange decision from a company that can’t seem to reverse the horrible course they’ve been on since Google and Apple entered the smartphone market.
We all know the story by now. According to comScore U.S. market share numbers when 2010 began Blackberry was on top of the smartphone world, but very soon that was about to end. In February of that year, Blackberry controlled 42.1 percent of the market followed by Apple with 25.4 percent, Microsoft with 15 percent and Google was in fourth place with just 9 percent.
By May of this year RIM’s numbers had tanked to just 11.4 percent, while Google had rocketed to 50.9 percent with Apple sitting pretty at 31.9 percent. If you’re wondering, Microsoft was in fourth with just 4.0 percent. And with each passing quarter, it just gets worse.
Yet after all this time, RIM seems to think that Blackberry 10 phones can turn it around. The company has little choice at this point, but to be positive, but they seem to be foolishly optimistic about these phones’ chances. A recent New York Times article about changes at Motorola Mobility, put the challenge in perspective.
The article quoted Charlie Kindel, a mobile industry blogger as saying, “Ninety percent of the profits in the smartphone space are going to Apple and Samsung, and everyone else from Motorola to RIM to LG to Nokia are picking up the scraps of that 10 percent.” If he’s right, then not much is going to change that equation for RIM or Motorola at this point. RIM is especially vulnerable since most of those other smaller players are running Android and there doesn’t seem to be much demand for Blackberry anymore.
It doesn’t leave RIM with a heck of a lot of room to operate and the future is looking grim. That’s why it was hardly surprising when a rumor popped up last week in a Reuter’s report about a possible suitor for RIM’s secure server network. What was surprising was that supposed admirer was none other than IBM, according to Reuters.
Whether the rumor is true or not, the fact is that unless the Blackberry 10 series surprises everyone, and I doubt very much that it will, it’s not very likely anyone is going to want RIM’s phone division with its plunging market share (although it still has more than Microsoft to this point).
The only real value left in the company is that network. There is always going to be a market for a secure phone system, and somebody could take those assets and exploit them. The Reuters article pointed out that IBM wouldn’t comment on the rumor, but it would certainly make sense for them.
Let’s face it, there’s very little RIM can do to recover short of selling off any valuable patents it may have a la AOL and selling its most valuable asset, the server division. Beyond that, we can only watch, as a once great company fades away before our eyes.
Photo by miggslives on Flickr. Used under Creative Commons License.]]>
As we all know, technology continues to evolve and there’s just no stopping it. It moves relentlessly into the future and you know what? That’s OK, but it means we might be seeing the effective end of once mighty companies. And RIM is a good example of that.
It reminds me in a lot of ways of sports (which is a great metaphor for everything, isn’t it?). For the past month or so we have been watching drama play out in Boston as the old, steady third baseman, Kevin Youkilis, was being replaced by the new young gun, Will Middlebrooks.
Youklis was strong and reliable for a long time. He was a fan favorite, but his production has been dropping and it’s out with the old and in with the new. He was traded to the Chicago White Sox Sunday night, unceremoniously dumped, like yesterday’s Blackberry.
Much like Youkilis, the Blackberry was a good soldier for many years. It served the market well, but newer models came along and RIM simply couldn’t keep up. Now comes word from Uber Gizmo that RIM is considering breaking into two divisions, one that sells handsets and one that sells secure messaging services (because there are still plenty of places that need that kind of service). It’s clear as Uber Gizmo points out that the handset division is doomed to die a quick death, but it’s not clear if the messaging service can survive without a handset partner.
Yet just as injuries have cut into the effectiveness of Youkilis these past few seasons forcing the Red Sox to trade him for a couple low-rate players, an increasingly grim sales picture has driven down RIM’s value, making it a buyer’s market for the once popular service. InformationWeek reported that Morgan Stanley added insult to injury this past weekend when it sent out an investment memo stating that basically, RIM was irrevocably broken.
“We believe the only way RIM remains a viable entity is at a fraction of its current size, a transformation that erases much of its earnings power,” said Morgan Stanley. “The next nine months will likely see rapidly deteriorating fundamentals on the one hand offset by stories of potential strategic options on the other,” InformationWeek quoted the Morgan Stanley memo.
This is a company caught between a rock and hard place, feeling like a rider on a downbound train. They’re on a highway to hell. You get the idea.
But like Youk, that’s OK by me. Why? As much as I liked him as a player, there is a natural rhythm to baseball. The new guys come up and replaces the old ones, and while it’s never easy watching an aging player get forced out, it’s the natural order of things. And it’s the same in business. RIM’s time came and went. The mobile market passed it by and now it’s time to move on.
Kevin Youkilis learned that this week and it’s a harsh lesson that RIM is learning too.
Photo of Kevin Youkilis and Will Middlebrooks by Keith Allison. Used under Creative Commons License.]]>
It’s easy to just dismiss RIM as another company that missed the mark when the market changed. That’s because if you judge RIM by its US market share numbers, the situation is pretty dire indeed, but RIM is more than the US market, a fact RIM’s CEO made clear at a press conference this week at RIM’s Blackberry World Conference.
And as we wrote here earlier this week, the market share numbers in the US are seriously ugly. RIM has plunged from 42.1 percent as recently as February 2010 down to just 12.3 percent according to comScore’s most recent numbers. It’s hard to put a smiley face on numbers like that, but CEO Thorsten Heins gave it all he had (as well he should given the condition of his company).
Heins as you would expect, chose to accentuate the positive. As Wayne Rash reported on FierceMobileIT, he made it clear that RIM is doing well in Latin America, Asia and the Middle East selling feature phones, it wouldn’t think of marketing in North America and Western Europe.
That’s all well and good, but as Rash wrote in another piece, Blackberry needs a home run and it needs it badly.
But as Jason Perlow pointed out on ZDNet, it won’t matter how good Blackberry 10 is — because nobody is going to pay attention if the device doesn’t have apps. “Without the developers, you have no apps. With no apps, you can have the sexiest device in existence but nobody is going to buy the thing,” Perlow wrote.
Perlow says that the reason Apple is so successful is that it has come up with the perfect combination of sex appeal on the device side combined with what he calls the Superheroes, the developers who feed the app ecosystem.
And Perlow’s right, if there are no developers, the device will fail. When my wife was looking at a new smart phone recently, she flirted briefly with the Nokia Lumia 900, but in the end she went with an iPhone, partly because she owns other Apple devices, but partly because Microsoft’s app marketplace seemed a little barren.
That’s why apps matter a lot, so it was with some surprise that when I read an exclusive interview on FierceMobileIT with Andrew Bocking, RIM’s senior vice president of software product management, he was practically boasting about the apps for the upcoming release of Blackberry 10. You may recall that there were a dearth of apps for the Blackberry Playbook tablet when it came out and that was one of the main reasons it has done so poorly.
Yet in this particularly interview, Bocking claimed QNX apps (the OS on the Playbook and upcoming Blackberry 10) had grown 240 percent this year, which certainly sounds impressive, but it’s hard to know, compared to what. But Bocking didn’t stop there, he predicted that when Blackberry 10 launches, it would have a “substantial” number of apps. He wouldn’t put a figure on that, but he did say it would be more than what Windows had when it launched Windows Phone 7.
Not exactly the best comparison given what I said earlier about Windows Phone 7 apparent lack of apps, but if it’s more, it’s certainly a good start, especially if they are geared toward business users and not the Angry Birds variety.
One of the big issues with the Playbook was that it lacked a native email client, a strategic error so huge, it’s mind-boggling that RIM allowed the product to go to market without it.
That’s why I remain skeptical about RIM’s claims. They need to build buzz at any cost of course, and it would be silly to make claims then not be able to back them up, but RIM has been stumbling and bumbling for so long now, you’ll excuse me if I’m a bit cynical about its ability to deliver.
So I’ll file this one under I believe it when I see it. The rest is up to RIM to prove it’s more than those fading US sales.
Photo of the Blackberry 9380 Curve, courtesy of RIM.]]>
As this infographic on the Ness Blog points out, you can trace a direct line to the decline of RIM to the release of the iPhone in 2007. As the infographic illustrated, as 2007 dawned, RIM was hey number one, king of the hill, top of the heap with more than 10 million subscribers, then there was the moment everything changed in June of that year. The iPhone was released and so began the long, slow and steady decline of RIM and its iconic Blackberry phone.
Like many established players RIM didn’t realize it had been disrupted by the newer iPhone — and then one year later by the upstart Android. RIM’s answer was too slow in coming and the Blackberry Storm disappointed loyal Blackberry users and didn’t do anything to attract the growing legions of iPhone and Android phone users.
As market share declined steadily, so did the company’s stock price. Today, RIM is a company on the edge of oblivion. That’s why this week’s announcement was so important. As Rash pointed out, RIM seems to have put a lot of thought into this phone — even if on first glance it looks an awful lot like Microsoft’s Window Phone 7 tiled interface.
And it’s done away with the hard keyboard, the one differentiator that Blackberry fanatics seemed to love the most. But Rash writes that the new keyboard is not your typical touch-screen variety. It has been designed to be as Blackberry-like as possible and to do a better job of auto-correcting than the competition (which wouldn’t take much).
Whatever Blackberry does, it better be dramatic because the numbers just keep getting worse and worse. A year ago I wrote a post called Can RIM Come Back. If you click through, you can see a chart which traces the steady decline of Blackberry market share from February 2010 when RIM still commanded over 40 percent of the smartphone market until last February when it had dropped to 28.9 percent.
And the numbers kept on dropping from that point forward. When comScore came out with its latest US mobile phone market share numbers recently, once again RIM had declined from 16 percent in December, 2011 to 12.3 percent in March of this year, a loss of 3.7 percent. Meanwhile Microsoft, which is supposed to be finally becoming a serious player in this game, declined once again as well, dropping from 4.7 percent to 3.9 percent in that same time period.
As for the winners, Google lead the pack with 51.7 percent (up 3.7 percent for those keeping score at home) and Apple was in second place with 30.7 percent (up 1.1 percent).
Numbers like those are a bit mind-numbing for the competition. Yet Blackberry is faced with a pivotal corporate moment here. This is literally make or break time. And much like Microsoft and Nokia who will live or die together, RIM and Blackberry 10 will do the same.
The one thing Blackberry has in its favor at this point that Microsoft lacks is there is still a core group that loves Blackberry, even if consumers seemed to have fallen out of love with the hand sets. For governments and companies that must have secure phone systems, RIM is still the company they turn to. In July of last year, I wrote a post called Security Could Be RIM’s Ace in the Hole. And I still believe that.
There is little doubt that at this point RIM is in dire straits, and it’s hard to imagine it picking up the pieces and coming back, but stranger things have happened, and at least they can play the security card, and hope for the best.
Photo by istolethetv on Flickr. Used under Creative Commons License.]]>
Now hold on a second, before you dismiss the idea out of hand, let’s consider a few data points.
Earlier this week I wrote a post about the battle for the smart phone market share lead and cited a couple of different studies. Buried in the piece, which focused on market leaders Apple and Android, I cited figures from IDC about RIM and Nokia and I left it that, but the numbers stuck in my head.
Let me quote that line for you:
“In case you’re wondering Nokia came in third with 12.4 percent, followed by RIM with 8.2 percent.”
If you want me to do the math for you if you combined the two companies, that’s 20.6 percent, which would put it right behind Apple’s 23.5 percent and Samsung’s 22.8 percent and into very respectable territory.
Now if you believe–and it’s by no means a given–that Nokia will improve its market share position as Symbian phones fall away and people start buying Nokia phones equipped with Windows Phone 7, those numbers could be even better.
And in fact, All Things Digital cites figures from Morgan Stanley predicting that Nokia could sell 37 million Windows phones this year.
Now, I hear you asking, “What about RIM?” Well, it’s true their market share has been plunging since 2009 and there is little reason to believe it can stop the bleeding now, but perhaps with a new team in place and a new mission, it could at least stay even.
But even if a combined RIM-Nokia Finnish-Canadian, business-consumer, one-two punch were to hold its ground at that 20.6 percent figure, that’s pretty significant market share.
And it would be a unique company, one which offers phones and services for businesses, as well as consumers letting the combined NoRIM (RIMKia?) cover all aspects of a competitive market.
One thing is certain, Apple and Android are going to continue to dominate the top of the market. As separate companies, Nokia and RIM can hope to fight for a mediocre third and a worse fourth, or they can join forces and suddenly have a serious presence in the market share game.
It’s at least worth considering don’t you think?
What do you think? Is a RIM-Nokia combined company a good idea for both of them or a disaster in the making? Leave a comment and let me know.
comScore looked at the period from September 11th to December 11th and found that Microsoft dropped 0.9 percent from 5.6 percent to 4.7 percent of US smart phone market share for the period. I’m guessing this is not the trend Microsoft was hoping for.
Windows Phone 7 has had time to mature and find a market, yet it has completely failed to do so to this point. Let’s repeat. It didn’t gain a bit or break even. It actually lost market share. Meanwhile, the guys at the top Google and Apple gained 2.5 percent and 2.2 percent respectively.
Microsoft is still hoping for some lift from Nokia as it releases its Windows phones, but so far it has yet to materialize. If we don’t see some positive movement in the next set of numbers, you have to wonder if Microsoft is ever going to gain any significant market share in the US.
This can’t be making CEO Steve Ballmer and his team very happy as they continue to throw large sums of money at the problem with little to show for it, except continuing to lose ground.
As I mentioned last week in my post, Rim Could Do Worse Than Microsoft, Microsoft may want to rethink its consumer-oriented phone strategy and shoot for the enterprise, which in many instances still screams for a more secure smart phone alternative to iOS and Android.
As badly as Microsoft did in this report, RIM did worse dropping yet another 2 percent of US market share. It’s just plain ugly for that company and it doesn’t seem to be getting better. Yet RIM still has the strength it’s always had — it’s secure server business.
As I wrote before, by bringing RIM’s struggling enterprise business together with Microsoft and its overall strong enterprise business, it could shift the focus from consumer to business and give business and government customers a secure, relatively reliable alternative– and I’m willing to bet there would be a market for that kind of service if it were done well.
Microsoft and RIM haven’t been able to get out of their own way in the US mobile market for some time. Maybe by bringing the two companies together, it would play to each one’s core strengths and give Microsoft a decent market share through its enterprise business.
For now, these latest numbers show how badly these two companies are floundering in the lucrative US smart phone space. Maybe bringing them together would produce something productive. It couldn’t be much worse than how they’ve been doing apart, that’s for sure.]]>
Never mind Nokia, Microsoft, especially its enterprise business, and RIM, could each gain a lot from a partnership.
Even as Blackberry has lost market share in disturbingly large chunks in the US (and increasingly Europe), dropping from a market leader to an also ran in just a couple of years, one thing has remained constant. People see RIM as a secure alternative.
They may not love Blackberry phones compared to iPhones and Android offerings, but if you ask anyone who is serious about security, there’s a good chance they are still using Blackberries whether their users like it or not. It might not be sexy, but the outage last year not withstanding, it has for the most part been a reliable enterprise offering.
That’s why connecting with enterprise service providers who have a solid footing in the enterprise as Microsoft does is a good bet for RIM. For the most part to this point, even though Microsoft is offering its own phone OS–Windows Phone 7–it seems to be aimed squarely at the consumer market.
Microsoft and RIM together create a secure, enterprise mobile powerhouse. Microsoft could even buy RIM and just fold its mobile server technology directly into the Microsoft family. Given the partnership like the one the two companies have now it makes so much sense. And it could continue to sell handsets for as long as the market demanded it, while offering the same services on Windows phones, making them all the more enterprise friendly.
I wrote a post last summer, how my sister-in-law who works for the Australian government carries two phones. She has an iPhone for personal use, but all work correspondence gets done on the Blackberry. When I asked her why, she said it was because it was so much more secure and people were trying to hack the government servers on a regular basis (much as they are likely trying to hack your company’s servers).
As we’ve learned, no system is fool-proof, and RIM is no exception, but in a world where users are increasingly bringing their own devices, if you have a facility that requires more secure access, RIM is still a great bet.
RIM has a new CEO, which is a step in the right direction, but it still needs to pull off a dramatic turn-around to come back and be a player in the market. Perhaps its servers are the key to its survival, much more than the phones and tablets it has produced in recent years, and maybe it needs more enterprise partnerships like the one it just announced with Microsoft — or even better, become Redmond’s Canadian mobile enterprise affiliate and be done with it.]]>
It’s clearly been a dismal year for both companies as they saw their market shares erode badly and their stock values plummet.
For Nokia new CEO Stephen Elop came on board, announced the end of Symbian and a new deal with Microsoft to create a new generation of phones running the Windows Phone OS. Sounded great except it would be almost a year before those Windows phones hit the market and all Elop and company could do was talk, taking a shot at chief rivals Google and Apple whenever he had the stage, such as the World Mobile Congress in June, and wait for those phones to arrive.
Nokia finally revealed the first phones last Fall, the Lumia 710 and 800 phones While they got mostly decent reviews, recent numbers suggest sales are lagging in England, far below initial estimates The phones won’t appear in the US until early 2012 starting with the Lumia 710 on Sprint.
The question is can Nokia begin to rally in 2012. It probably has a better shot than RIM, which has stumbled and bumbled its way through 2011.
It screwed up the PlayBook launch by not being able to decide if wanted to be a consumer device or a business one, an anonymous executive published a letter about inner-turmoil at the company, it had a horrible outage and oh yes, it continued to bleed market share like nobody’s business.
RIM’s value went down even more than Nokia’s, leading to speculation of a sale. Heck, there was even a rumor Amazon, Microsoft and Nokia had kicked the tires on them. Everyone was giving the company advice on how to proceed, usually starting with showing the co-CEOs the door.
If you want to get a true sense of how far RIM has fallen, consider that as recently as 2009 it had 44 percent of US smart phone market share. By this year it dropped down all the way to just a mere 10 percent. That’s a monumental fall and it’s hard to see how the company will ever turn it around.
Nothing is impossible, but it seems the market has moved on without these companies. To think, either could ever catch Apple or Google is probably no more than a pipe dream right now, but there is a clear race for third place and one of these companies could get it.
Whether either company can get it together enough to grab that market share remains to be seen. Nokia could find a consumer market hungry for an alternative, but right now Google and Apple look awfully strong and there doesn’t appear to be a huge interest in the Windows Phone OS.
RIM still has a shot at the secure phone business. As I wrote in July, Security Could Be RIM’s Ace in the Hole, and I still believe that, if they can build a clear, coherent message and a set of products to go with it.
As we head into a new year, these two companies are at a cross roads. If they don’t pull it together this year and begin to show some signs of life, it’s hard to imagine either ever will.]]>
As though that weren’t bad enough, ZDNet reports that the same problems affecting other regions had spread to the US and Canada.
These haven’t been really great times for RIM of late. What was once the worldwide leader in business smart phones has seen its market share slashed and burned by Apple and Android phones. Once the darling of IT, RIM is now a victim of the consumerization movement. People don’t want stodgy Blackberries when they can have sexier models from the competition.
As a result RIM has been bleeding marketshare in the US for years. It tried to get into the tablet market with the Playbook and botched the launch leaving it to play catch-up ever since in a market that demands perfection out of the gate. RIM had a chance to market itself as the enterprise-friendly tablet, but it failed to take advantage of the opportunity.
But RIM’s one saving grace was the fact it was still very popular in Europe, Middle East and Africa, and in spite of its tumbling market share in the US, whenever I travel on business, I still see plenty of Blackberries in the airport lounges.
Now they have damaged their last growth market with an outage for the ages. Writing on twitter, analyst Michael Gartenberg tweeted, “RIM outages tarnishing a company with ethos for reliability. 10 years of uptime reputation is damaged with three days of outages.”
Meanwhile, Guardian technology writer Charles Arthur wrote that RIM has lost 4.3 million users in the US last year. This is surely not going to help its reputation any. One of the things RIM has always had going for it was that it was the secure choice.
While it’s not a security breach per se, it is very much a reliability one and for RIM which faces a tremendous challenge moving forward, this has to hurt even more. It seems everywhere this company turns, it’s a bad move
Perhaps Market Watch summed it up best when it wrote that RIM Outage May Threaten Remaining Value. Gee, you think?! Maybe you could buy RIM for a bag of balls.
All kidding aside, in spite of this horrible stretch, there’s probably some life left in the company. It’s just a matter of getting out of its own way and showing the market why people turned to RIM in the first place. But this is no small matter, and it’s going to take some work to put this outage behind it, and return the company to anywhere close to its former status.
Photo by MattHurst on Flickr. Used under Creative Commons License.]]>
As the consumerization trend has swept the enterprise, IT has been reduced to overseers, rather than dictators of technology choices. And users don’t want Blackberries. They want Apple and Android phones, But in highly secure environments, total freedom to choose your cell phone just isn’t practical and IT must maintain control.
Take the government for instance. My sister-in-law works for the Australian government and she has been issued a Blackberry for government business. When I asked her why, she indicated because communication was forced through a secure server helping ensure that the messages she exchanged with politicians and colleagues remained confidential.
The implication was clear, the other choices while more fun to use were not nearly as secure and that could be the focus of RIM’s strategy moving forward.
I also noticed that when I was in Germany last year for the CeBIT conference, the organizers were also issued Blackberries. Security was tightly controlled and German users were not even allowed to download Blackberry-approved apps. Perhaps RIM can use this conservative approach to IT to its advantage in overseas markets.
At one time, as recently as Fall, 2009, RIM was the most dominant cell phone maker in North America with 40 percent of market share. Today that’s all changed and with each passing quarter, RIM loses more and more of this market. In fact, the April Comscore market share statistics have RIM in third place with 25.7 percent down 4.7 points from the previous quarter.
What’s worse, it feels like a company in disarray. As its market share numbers slip, the strategy has been to release a the Blackberry PlayBook tablet, which by all reports was an admirable try, but one which was clearly released too soon — and RIM is not a company that can afford at this point to make many missteps. Meanwhile, its two-headed CEO approach seems like a strange idea at best, and one that shows a clear lack of leadership at worst.
But RIM has always been the enterprise choice for cell phones. As Apple and Android have developed far more sexy choices, and users have grown tired of carrying two phones–one for work and one for themselves, Blackberry’s domination has disappeared. Yet RIM remains a secure choice in environments whose work demands it, as my sister-in-law’s case clearly shows.
What’s not clear, however, is if in most enterprises, IT has lost control of these choices. And if that’s the case, RIM’s road is going to continue to be rough. Unless the upcoming series of phones provides both the sex appeal users want and the security IT requires (at least in some cases), as we’ve written here before, RIM could be in serious trouble.
If, however, it can use its security to its advantage, especially in overseas markets, it could continue to do reasonably well outside of North America, and that might be enough to keep it going, or at least make it a reasonable take-over target for another company. ]]>