Is it too late for Nokia or RIM? Before you answer, consider this quote from The Economist back in 1995.
Apple could hang on for years, gamely trying to slow the decline, but few expect it to make such a mistake. Instead it seems to have two options. The first is to break itself up, selling the hardware side. The second is to sell the company outright.
If you think that was an isolated point of view then check out this roundup of doom predictions for Apple on the New York Times blog. We all know how that turned out.
Now, I’m not predicting Apple style success for RIM or Nokia, but let’s just remember that it’s never over until it’s really over. With the right moves, any company can make a comeback and the fast-paced world of tech is a great place to do it.
Before we get into strategies for success let’s take a look at how bad things have gotten.
RIM is seriously in a hole. The high point for their share price was 2008 when it hit $149.90. As I write this, the share price is $7.52. Take a look on Google Finance and hit the 5 year tab on that chart and you’ll see the steady decline. The BlackBerry once dominated the smartphone market. How was it allowed to fall so far?
The news this week, from Reuters, is that RIM is looking to sell assets to stay afloat, including its cloud services provider NewBay. Selling recent acquisitions is never a good sign, although in this case it’s probably because RIM is gearing up for one final throw of the dice with BB10 and it needs cash to push out the new line-up of devices.
The high point for Nokia was way back in 2000 when its share price hit $58.50. Today as I write this it is $2.64. Take a look on Google Finance and hit the “All” tab and you’ll see a sharp decline building towards a pretty respectable 2007. The reason it nosedives after that is Android, which was first released in 2008 and has been greedily eating Nokia’s share of the market ever since.
This week the Washington Post is reporting that Nokia is making a big loss and has been downgraded further into “junk status” by rating agency Standard and Poor’s. This follows the news in June that Nokia would be cutting 10,000 jobs and closing down some research and development facilities.
How did things go wrong for RIM and Nokia? Well you can argue about mismanagement in both cases. Lazaridis and Balsillie as co-chairmen and chief executives at RIM were widely criticized before they resigned. Nokia’s chief executive Olli-Pekka Kallasvuo was fired in 2010 and replaced by Stephen Elop. He came to Nokia from Microsoft and the fact that a Nokia and Microsoft partnership followed soon after has raised suspicions about his motives. Was it really a good idea to ditch MeeGo and go with Windows Phone?
We could also attribute the disastrous performance of both companies to the rise of the Android platform. Android has clearly established a leading position in the smartphone market but it didn’t do that by beating Apple. The rise of Android correlates quite closely with the decline of BlackBerry and Symbian.
Current RIM CEO Thorsten Heins already admitted that RIM considered adopting Android, but in the end they didn’t fancy their chances of competing with Android manufacturers like Samsung. There are so many devices being released that support the Android platform that he was concerned about how to differentiate BlackBerrys.
The gamble on BB10 has now been taken, and RIM can’t easily go back on it. The fact that Android apps could easily be ported to BB10 could bring the BlackBerry brand the key advantage that adopting the Android platform would have done. However, RIM still needs to persuade developers that it’s worth the trouble and it needs to persuade existing customers to buy a new BB10 device because it won’t be rolled out to existing BlackBerrys. The idea that other manufacturers might license BB10 sounds like wishful thinking.
We don’t know if Nokia considered adopting Android. They had already put a lot of work into MeeGo, and the Nokia N9 got favorable reviews, so it was a surprise when Elop unveiled the Windows Phone plan. Microsoft definitely enticed Nokia to adopt Windows Phone with platform support payments and probably a lower than normal licensing fee. However, the release of Windows Phone 8, and the news that old Windows Phone devices can’t be upgraded to run it, is a real kick in the teeth for Nokia.
You would imagine even if Nokia decides to ditch Windows Phone that a return to MeeGo and Meltemi would be the most likely move.
A better title for this article might be “How Android could have saved RIM and Nokia”. If Nokia had adopted Android instead of Windows Phone and RIM had adopted Android instead of working on BB10, then both companies could be in much better shape right now. The Android platform has improved so much since its first release. It has a thriving app store.
A line-up of high quality devices running Android from RIM or Nokia would have been a major hit with consumers. Both companies are known for their ability to deliver high quality handsets at reasonable prices. I think the brand recognition and lingering loyalty could have been enough to wrestle away some customers from Samsung, HTC and the gang. If people weren’t forced to choose between a dated platform and Android, with all of its momentum, then they might have stuck with Nokia and RIM.
Randy Khoo, here at Android Authority, already argued not even Android can save Nokia now, but I disagree. Seriously, it’s never too late. It’s not too late for RIM to adopt Android either. Provided they have the cash to get a range of Android smartphones to market, then the points above still stand. Both brands do still have some love with consumers and they could differentiate themselves on the Android platform with quality handsets and branded apps and services. Imagine BlackBerry enterprise know-how focused on the Android platform or Nokia’s camera technology in an Android phone.
Sadly I don’t think either company will adopt Android. I think they’ve made their decisions and they’ll wait to see how things pan out. What do you think? Post a comment and tell us.