Around 1999, RIM pretty much invented the first smartphone. It had a keyboard with tiny buttons, and a small display on which you could easily identify pixels. That didn’t matter though, as it was one of the very first companies that enabled people to do so much more on the go, and, for the first time, businessmen could easily manage their work on the move.
So, why is it that today RIM’s stock rating is in the gutter, and why is this once grand company falling back on their marketing of the last few years? Let’s explore, shall we?
Some thoughts on the company’s decline
RIM’s downfall probably stems from the fact that, a few years ago, companies like Google, Apple, and even Microsoft were throwing billions into the creation of revolutionary technology. RIM stood their ground in the hope that their popular devices would hold firm through this period of booming technological development. I believe it is because RIM failed to adapt to new technologies, stood their ground, and made plenty of bad management decisions, that they sank lower and lower in the mobile market they once had under their control.
But it’s not like RIM got itself into this mess overnight. The process took years and is still unfolding. After years of losing market share and, more importantly, mind share, RIM’s joint CEOs Jim Balsillie and Mike Lazaridis finally resigned at the beginning of the year.
With the ill-fated power couple gone and a new German boss in place, RIM’s share of the smartphone market is nowadays at about 15% and dropping fast. In fact, the share of Windows Phone devices is rising at the same rate RIM’s is falling.
Businessmen and their daughters
Industry leading encryption. Push email. Web browsing. These are all things that came to the masses via Blackberry’s first. But, let’s step back a little and see how a small Canadian firm managed to top the worldwide technology mobile market in the first place. As I see it, there are two big reasons for RIM’s initial success:
The first is Businessmen. Huge corporate deals amounting to hundreds of millions of dollars ensured that every businessman went around with a Blackberry device in his pocket. It was RIM’s golden age, a time when no device could even aspire to beat the indomitable and omnipresent Berry.
Which leads me to the second reason for the company’s success – Daughters. When new Blackberry models were issued in offices across the world, many companies preferred to save the money and time used on recalling old devices, and offer employees the chance to erase them and keep them for themselves. And since Dad had already been given a new phone for work, he gave his Blackberry to his daughter, who was eager to join the text-message revolution her friends were already a part of. What better device than a Blackberry? It’s small, ‘cute’, and, it even has a keyboard to make typing quick and snappy. Perfect.
So, the daughters of businessmen all got lovely new phones, which then led to subliminal peer pressure and general chit-chat that made Blackberries the must-have devices for teenage girls. Soon, RIM noticed their sales were booming in the consumer sector, and began to re-focus its marketing efforts on young adults and away from corporations.
This would have been fine, except RIM stopped working hard on their creations. Every now and then a new device had a better camera or a larger screen, but it was always the same trackball, keyboard, and overall, the same design. As RIM sat on its laurels, Apple and Google were developing their own devices, with impressive hardware and powerful, easily upgradable software.
I’m sure you know the rest.
Android has a rich set of applications available to its users, as does iOS and, now, even Windows Phone. RIM never foresaw that apps are the future, so it never developed a software infrastructure that people could easily develop for. The new ability for Blackberries to run Android apps won’t save RIM either. Why would anybody want to own a device that attempts to use applications aimed for another device? They will buy the Android device first.
Blackberry OS, the Playbook, and all the new devices RIM are/were launching are just attempts at catching up. What RIM should really be doing is funding development of new technologies which they themselves could release as revolutionary. After all, I thought it was in the name – Research. Right?
RIM has realised that it can’t compete against Android and the dozens of manufacturers that support it, nor Apple and their uberpopular iDevices. So they have (I think wisely) fallen back to making bespoke devices for businessmen, which may be the only way to save the company.
How can RIM turn things around? Is it too late for them? Was your first smartphone a Blackberry?