RIM is in trouble after delays to its core products
and upcoming BlackBerry OS 10 sent investors diving for cover. During the company's last conference call, its co-CEOs promised to investigate every possible option for improving RIM's market position while it works on the upcoming BlackBerry 10 OS and tries to strengthen the appeal
of the BlackBerry Playbook. Even so, news that Microsoft and Nokia considered a joint bid for the company comes as a surprise.
The Wall Street Journal
reports that the three companies discussed such a proposition but notes that the status of the talks "remains unclear." RIM's stock has continued to tank, from $59.10 in January 2011 down to $12.52 on Tuesday, December 20. Co-Chief Executives Jim Balsillie and Mike Lazaridis have remained nearly manically upbeat, but investor rage has mounted as the company's woes deepen.
Research in Motion is said to have also approached handset manufacturers like Samsung and HTC to explore OS licensing options; the Canadian company may also be exploring licensing its network to other carriers. It's unclear, however, if any of these strategies would do much to slow the company's downward spiral.
A deal with Microsoft and Nokia could potentially put Windows Phone 7 on BlackBerry devices, but RIM's core user base sticks with the company because of perceived advantages in device security and messaging. Asking these users to switch operating systems with BlackBerry OS 10 still under development could sow confusion in the ranks, particularly if RIM's corporate customers see the move as evidence that the company is moving away from its traditional focus.
A deal with Samsung, HTC, or Nokia could bring RIM's hardware up to modern standards; the company's current flagship, the BlackBerry Bold 9900, is a single-core device with a 640x480 screen and an underpowered Adreno 205. Again, however, software compatibility is a major question. RIM has utterly failed to demonstrate any ability to update the PlayBook's core functionality or to keep to its own OS release timeline. Any attempt to port BlackBerry OS 7 to a new device would require significant tuning for a new interface, while waiting for BlackBerry OS 10 leaves current problems unresolved.
Network licensing may be RIM's best chance of creating a new income stream for itself, but the company is undoubtedly aware that any move to open its network will inevitably dilute the BlackBerry brand. It also raises the software bugaboo again; any non-BlackBerry OS devices that connect to the BB network would have to be specifically vetted and checked for security flaws that could inadvertently expose user data.
The counter-argument here is that RIM is already hemorrhaging customers and mindshare in North America. The company's vaunted network, while it may appeal to a small core of users, isn't a big enough feature to keep business users happy in a world where iPhones and Android products are available. By this argument, RIM could actually forestall collapse by aggressively licensing its secure network and core products to other manufacturers, even possibly making the transition over to a software company in the next 4-5 years.
What's certain is that the company needs to do something far more radical than the band-aid fixes its CEOs have proposed thus far. Whether or not that happens will likely determine if we're writing RIM's obituary by this time next year.