How Should RIM Right Its Ship? - InformationWeek
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6/17/2011
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Ed Hansberry
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How Should RIM Right Its Ship?

After dismal quarterly results, can it reverse the perception by many that the BlackBerry is old school and manage to rekindle buzz about the platform and company?

RIM has long been the darling of Wall Street for its dominance of the corporate smartphone market, but those days are over. Its share price has fallen from a high in the $140 range in 2008 to $35 after its earnings announcement on Thursday. For a while, it was trendy to carry a BlackBerry and many consumers knew the BlackBerry models, had their best friends set up on BlackBerry Messenger, and would spend too much time playing Brick Breaker. Those days are gone as well.

In an age where push email takes a back seat to navigating by swiping on the screen, streaming rich video on a phone, and perusing application stores with tens of thousands, and even hundreds of thousands, of apps, RIM finds its device has been knocked clear of the limelight. How does RIM reverse that trend?

The first thing RIM has to do is recognize there is a problem. Internally, RIM sees a picture quite different from what the stock price shows. Their revenue is nearly triple where it was in early 2008 and profits are up 250% from the same time period. They are gaining distribution as they move into new markets as well. This looks like a company on the rise with a bright future.

The conference call tells a different story though. Market share is down, the Playbook launch hasn't been noteworthy, and the company is planning layoffs. RIM may finally be seeing the truth of its position.

The BlackBerry platform itself is being put out to pasture. QNX, currently on the Playbook, will power RIM's smartphones in the future, but will that be enough?

One possible way to kick start the BlackBerry platform is to embrace Android. VentureBeat thinks RIM may use Android as its plan B if QNX doesn't do the trick. I am not sure there is enough time for that though. The transition to QNX will take a year or two at a minimum and another year or two to catch on and reverse the trend. By then, you are well into 2015. That will be too far out to go to a plan B.

Do you think RIM can turn things around? While it still has good sales today, it finds itself more closely identified with HP's webOS, Windows Phone 7, and Nokia, in that the world passed it by and now it's trying to catch up. It may have stuck with the current platform too long though, thinking that rising revenues and profits meant it was on right path. Recently announced measures may be too little, too late.

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