The quarterly earning announcement from Research In Motion has certainly brought some interesting points to attention. The company’s CEO, Thorsten Heins, has told the investors of the company that RIM will no longer make efforts to be “all things to all people”. Instead, the intention is to revert to a business plan which was shelved years ago – build devices for businesses and enterprises.
This proposed and rather extreme alteration to RIM’s existing business plan and marketing angle comes only weeks ahead of BlackBerry OS 10 being released to developers. Read on for more details on RIM’s quarterly report, and what this news may mean for Android.
In the last financial quarter (January through March), Research In Motion shipped only 500,000 of their PlayBook devices. Only 11.1 million Blackberry smartphones were sold in the same time period, which is 21% lower than the quarter sales from October-December.
Altogether, RIM’s quarterly revenue has fallen by 19% on Q4 of last year, to a small $4.2bn (£2.62bn). They have lost $25bn (£15.6bn) of revenue year on year. The Blackberry devices currently hold only 15.2% of the smartphone market and that number is falling, set to pass by Windows Phone 7 which is slowly creeping its way up.
Former co-CEO of RIM, Jim Balsillie has now resigned from the board of directors. However more importantly, the company’s chief operations officer, Jim Rowan, and Chief Technology Officer, David Yach have also announced their plans to leave the company, likely due to its current damaged state.
Overall RIM are in a very desperate and dangerous position. If they don’t release new innovative technology which will redefine their brand, they are likely to continue down a slippery slope of unpopularity, perhaps even going bust. The existing customers of RIM are leaving in droves as smartphone usage statistics show, and with critical executives and team leaders jumping ship, how will RIM come together with anything to sell to anyone?
Perhaps it is best that RIM has plans to go back to the domain where they originally found their success. I think it is pretty fair to say that aside from the initial popularity boom in the consumer market, RIM’s popularity has now dropped exponentially. I expect the CEO and investors are praying organisations will welcome their Blackberry devices back with open arms.
Well it certainly means less competition in the smartphone industry, that’s for sure. I also anticipate that the Blackberry devices will have their prices cut dramatically to aid the sale of remaining stock. If the prices are cut, I am sure there will be a surge in popularity and purchases, the same way things were for the HP Touchpad last year. However this news may be a disappointment to some Android developers, as RIM were working on emulation software which would allow Android applications to run on Blackberry devices, thus boosting an Android developer’s audience.
With RIM ‘surrendering’ as it were, this means that Windows Phone will soon the place of RIM and their Blackberry OS as the third most popular smartphone operating system.
Overall, I suppose I feel sorry for RIM. They have lost their dignity, brand identity, ability to impress, and to most people, status as a Smartphone giant. It would be a pity for the company to bust completely, and I hope that a company such as Microsoft or Nokia swoops in with a good offer for the companies assets if things go that way.
What are your thoughts on RIM’s financial state and announcement? Are they wise in reverting back to designing devices solely for corporate use?
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You are quite clearly forgetting that research in motions assets and intellectual properties are quite significant, soo much so that chances of bankruptcy is at a very minimal. Nokia would never be in the running for even buying said assets as they themselves were a very failing company in the consumer market. Hence being taken by windows phone OS which lets face it hasn’t been a marvellous launch. In an ideal world rim would be seized by say Samsung for is design with RIM security and hardware. Samsung hardware is fairly disappointing from a quality point of view.
(typed on a blackberry PlayBook keyboard)