RIM CEO Interview Sparks Hope That Company May Yet Survive

It's been quite awhile since anyone had much good to say to say about RIM's chances of surviving the next 12 months as an independent company, but a new interview with CEO Thorsten Heins has me hopeful. Unlike Heins' widely-publicized op/ed in the Globe and Mail a week ago, in which he sounded like a beleagured ship captain reasurring everyone that no, we haven't struck an iceberg, here he comes off as well-grounded. More importantly, he offers the best, most-concise explanation for RIM's current situation that anyone in the company has had to date.

Where RIM Went Wrong

The problem is actually quite simple. Back in 2007-2009, RIM was busy selling like gangbusters in the US and had focused most of its attention in growing its global business. The company's products, as Heins notes, were built on four pillars -- "battery life; typing; security; and compression." In emerging markets like India and China, the first and last items were hugely important. Remember that in 2007 - 2009, the news was filled with coverage on how AT&T's 3G service was being crushed by the weight of the iPhone's popularity. The problem with the cell phone industry is that it takes two minutes to sign up a new customer and at least six months to plan and construct new buildouts -- and that's in the US.


Original image courtesy of Crackberry

San Francisco was notorious for poor iPhone 3G service, and it's only home to ~7.15 million people. Imagine trying to build out your network in Shanghai (25.5M), Jakarta (25.4M) or Delhi (23.2M) and you get an idea for why RIM's bandwidth-saving technology was such a good fit for these markets. What the company missed, according to Heins, was the way network use was transitioning in the US.
With LTE it was important actually not to save network resources, it was important to load the networks, to sell data plans and sell data volume. We didn't miss on innovation. I think we missed on understanding, specifically in the U.S., that this trend was shifting, and that our positioning and our value proposition in the U.S. market was not following that trend shift.
According to Heins, he could have kept the original BlackBerry 10 OS release schedule, but opted not to due to the importance of quality and platform stability. The company's declining market share, the CEO believes, is the result of touchscreen popularity. The QWERTY market is growing very slowly (if at all), which leaves RIM with a declining piece of the overall pie, even if it increases sales in a number of overseas markets.

The biggest reason I'm more hopeful about the company is the tenor of the interview. Heins doesn't dodge questions, he doesn't argue ceaselessly with less-than-beaming characterizations, and he doesn't lash out at the press for the dismal picture we've collectively painted of the company. By all appearances, he Gets It.

This leaves one enormous question -- will it be enough? Delaying BlackBerry OS 10 to perfect it may be the right move, but the critical issue is whether or not the company can create a self-sustaining application market. When BB10 eventually launches, Research In Motion needs to have a huge list of supported/compatible applications to ensure buyers that they'll get the same experience on a new BlackBerry as they will on an Android or iOS device.

I still think talking about BB10 would do the company a world of good -- Microsoft's Building Windows 8 blog is a great example of how to engage and communicate with your user base -- but app compatibility will trump OS communication. The company may still be headed in the wrong direction, but for the first time it feels like someone up in front is actually carrying a flash light.
Via:  CIO.com
Comments
dejasoul100 2 years ago

The problem is, the financial analysts think they won't get to release OS 10 in time to save them. A cursory glance at their financial statements shows that they are burning through cash at an alarming rate. They need to stop the bleeding, AND OS 10, which is years behind schedule has to be current,next-gen and be a bestseller. I think it may just be too much to do in one release.

shadizzle 2 years ago

Agreed,

I really do hope they pull through long enough to release their BB 10 OS. Ive only seen small pieces of it on the web, and so far I am pretty impressed with it. Sadly, IMO I feel they mainly underestimated what happens when a consumer based smartphone(full of content consuming apps) hits the market over a business oriented phone. Hopefully, assuming it does make it out to release, they will have that open option to deliver what the "standard" consumer wants, along with their business clients. As long as they keep support on it for the future, it may have a good chance. All this mess aside, it would be nice to have another option again, and WP7.x isnt it..

3vi1 2 years ago

Captains of Industry seldom acknowledge icebergs.

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