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RIM's Loyal Following May Have Doomed It

RIM's Loyal Following May Have Doomed It

Could it be that RIM's fatal flaw was listening to its customers? Possibly -- considering how entrenched it was among corporate and government types who cared much more about security than style. Looking to that particular customer base for guidance "proved to be unpardonably myopic," said James Brehm of Compass Intelligence. "Ten years ago, their customer base was the bleeding edge -- but that hasn't been true for a long time. ... Today [RIM] is just a one-trick pony."

By Erika Morphy E-Commerce Times ECT News Network
05/04/12 5:00 AM PT

Research In Motion's investors did not seem pleased with the company's latest endeavor, BlackBerry 10, which CEO Thorsten Heins unveiled at its BlackBerry World 2012 conference in Orlando, Fla., earlier this week.

As the new operating system made its debut, the device maker's stock dropped on the Toronto Stock Exchange approximately 15 percent -- a decline the company could ill afford, as its share value has been steadily falling for the last year.

The drop is somewhat puzzling, because the new BlackBerry software appears to hold promise.

"The presentation impressed me," James Brehm, senior strategist and consultant with Compass Intelligence, told the E-Commerce Times.

In fact, after the demo, Brehm tweeted "RIM is not dead yet," along with a link to the presentation.

Among other attributes, he liked the focus on touch and the flashier interface, which should be able to compete better with Apple.

The OS will not be available to consumers any time soon, though. The BlackBerry 10 software is now being made available to developers. New handsets sporting the software are expected on the market later this year.

Too Much Uncertainty

For many company watchers that hazy timeline, coupled with lack of hardware, may have been the last straw, Azita Arvani of the Arvani Group said.

"I am no market expert, but I know that markets don't like uncertainty," she told the E-Commerce Times. "RIM didn't offer a lot of certainty with respect to its future platform BlackBerry 10."

A number of prototype devices that were given out to developers looked like small PlayBooks, Arvani noted, but RIM said that was not the final design.

Essentially, "RIM is introducing a brand new OS for their future smartphones, with no clear timing of when the product will be available," she concluded. "There is no guidance on what the device would look like."

More Than Opaque Timing

RIM's troubles go beyond an opaque product road map. The company has been foundering for years for various reasons -- all of which analysts have thoroughly dissected, trying to pinpoint when and why this once-top device maker went off course and what it can do to get back on track.

It has seemingly been unable to recover from the heavy competition presented by Apple and Android. Also, for a long time, RIM's products were designed for one constituency and one constituency only: the business and government user who placed security over sleek design.

"For a long time RIM looked to its own customer base for guidance and that proved to be unpardonably myopic," Brehm said. "Ten years ago, their customer base was the bleeding edge -- but that hasn't been true for a long time."

RIM's problem is that the company stopped innovating, Brehm concluded. "Today it is just a one-trick pony."

The Switzerland of Smartphones

RIM is well aware of its decline; the company has acknowledged as much. Indeed, its recently appointed CEO, Thorsten Heins, has been leading a charge to shake up the company, complete with reductions to management and overall headcount. Shareholders -- and customers -- are keeping their fingers crossed that these changes will turn the company around.

RIM also may be about to get a lucky break in that Android appears headed for a rocky period, John Jackson, an analyst with CCS Insight, told the E-Commerce Times.

With Oracle's suit against Google for unauthorized use of Java, Google's pending acquisition of Motorola Mobility, and Samsung's likely aspiration to develop a smartphone platform of its own, Android will be more fragmented and its direction less focused, he said.

Also, Microsoft's smartphone efforts are sputtering, added Jackson.

"I think the BlackBerry 10 can be a competitive platform -- both on its own merits and due to this upheaval in the smartphone market," he said.

RIM may position itself as the Switzerland of the smartphone universe -- that is, a neutral country, Johnson said. Keeping its system open "would put it in favorable standing with developers and service providers that are not happy with Apple's terms or the Wild West that is the Android market."

A RIM spokesperson was not immediately available to comment for this story.


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