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1/5/2012
01:56 PM
Eric Zeman
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RIM Might License BlackBerry Platform: Crazy Or Genius?

Research In Motion is talking to Samsung and HTC about licensing its Blackberry 10 smartphone platform, says analyst. All kinds of crazy, or crazy like a fox?

Jefferies & Co. analyst Peter Misek believes that Research In Motion already is exploring the idea of licensing out its forthcoming BlackBerry 10 platform to hardware competitors such as HTC and Samsung.

"We think some of this has already been started with RIM likely agreeing to license Blackberry 10 to Samsung, HTC, and possibly others," said Misek.

"This would help create a critical mass for the ecosystem and maintain RIM's monthly service revenue; however, it puts more pressure on the hardware business in the short term. Longer term, it possibly gets people hooked on the RIM ecosystem and may in fact allow them to sell more BB 10 handsets (if they are able to create compelling handsets)."

I am not sure if the idea is insane or genius. Let's discuss.

[ RIM's miseries are compound. See RIM BlackBerry Outages Day 3: U.S. Hit. ]

As evidenced by years' worth of earnings, we know that the lion's share of RIM's revenue is created by selling hardware. That means BlackBerry smartphones. Its most recent earnings report showed that 79% of its revenue came from hardware sales, 19% from service, and 2% from software.

First, the idea that RIM would give up even a fraction of 79% of its revenue is absolutely bonkers. How could it possibly recoup the loss in hardware sales with licensing fees? RIM's hardware competitors would have to sell hundreds of thousands of devices.

Second, HTC and Samsung both are already immersed in at least two smartphone ecosystems: Android and Windows Phone. Samsung has a third, its own Bada platform. There's no compelling or obvious reason for either company to adopt yet another smartphone platform.

Third, the development times are far too long. The platform itself won't surface until the end of 2012. Surely RIM would give its own hardware a head start before offering to license the platform to other vendors. That means early to mid 2013 before other vendors could bring BB 10 hardware to the market. By early 2013, Apple likely will have released iOS 6, Google will have released Android 5.0, and Microsoft likely will have released a significant update to Windows Phone. Products running these operating systems all will be available long before BB 10 hardware from vendors other than RIM, and their hardware will be two generations further along.

Fourth, Misek's theory assumes that BlackBerry 10 is worth licensing. If there's one thing RIM has failed at with its smartphones, it is to create compelling software. No one will want to license a crummy operating system. We have to look no further than webOS, which Palm and HP considered licensing. WebOS was a decent operating system, and no OEMs licensed it.

Bottom line, this idea seems like a last-ditch effort that would be necessary only if RIM's hardware business collapsed completely. RIM might be losing the game at the moment, but it's certainly not out of the game entirely.

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Chris Spera
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Chris Spera,
User Rank: Apprentice
1/6/2012 | 10:33:00 PM
re: RIM Might License BlackBerry Platform: Crazy Or Genius?
Interesting question... But they gotta finish it first, THEN they can license it.
ANON1237925156805
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ANON1237925156805,
User Rank: Apprentice
1/6/2012 | 8:26:58 PM
re: RIM Might License BlackBerry Platform: Crazy Or Genius?
The analogy between RIM today and Apple in the early to mid 90s is apt. Fast forward a decade and Apple's products had done a 180 thanks to a focus on innovation from the guts to the surface in both the hardware and the OS arenas. Apple now keeps its focus on how to incorporate and commoditize new ideas, delivering them before users knew enough to want them.

At this point iOS is proven to work well and be reasonably secure with a high fun quotient. The products that uses it are "hot" with consumers and increasingly in the enterprise. Even with Android fully established and Windows at least up from the canvas, it's a good bet that if Apple were to choose to license (unlikely but just suppose) there would be takers.

Google has a simliar approach and it's been as important to the success of Android as the "open source" and "free" images out there.

RIM has never had that focus of appealing to the consumer. its areas of innovation had to do with infrastructure, with creating an ecosystem for the enterprise, secure, easy to manage and easy to integrate with corporate email/calendaring. Make no mistake: BES was a very signficant leap forward; an early cloud solution really. That was enough for IT shops to nix Palm and give their imprimatur to RIM. As Blackberries were doled out in a top down fashion of course they became coveted status symbols.

Unfortunately now RIM doesn't have the only solution on that front; in fact the marketplace has forced RIM to make BES a mutli-device tool. BYOD is here to stay. We see that the infamous "crackberry addiction" is not at all the same as having someone lust after an iPad or iPhone or the latest Samsung Galaxy. RIM could have done so much more so much sooner to bring hot new features to its handsets but instead it they coasted, relying on their huge market share and minor design tweaks to keep what they believed was an unshakeable lead.

Their brand is so tarnished now that their only hope is to deliver products that leapfrog everyone else as the got to have it devices. If that happens and if BB is a big part of what makes those products hot then yes, RIM might find a taker or two, folks who want to distinguish themselves from the pack. Thing is how can they hope to leapfrog everyone else when the competition will deliver at least one new generations of product before RIM delivers its your current one? Hey RIM prove us all wrong if you can but in the meantime don't be surprised that no one is holding their breath.

In this reader's opinion the asset is BES and the only way to salvage their shareholders from taking a total bath is to strengthen and leverage it to the max.
melgross
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melgross,
User Rank: Ninja
1/6/2012 | 5:40:59 PM
re: RIM Might License BlackBerry Platform: Crazy Or Genius?
Mobile devices powered by a car battery. Not mobile devices powered by a small battery in a handheld device. If you had gone to their site, you would know this. This is a totally different area for them. It was never intended for this use, and apparently, RIM is having big problems integrating it into their network.
Andre Richards
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Andre Richards,
User Rank: Strategist
1/5/2012 | 11:41:00 PM
re: RIM Might License BlackBerry Platform: Crazy Or Genius?
It is neither crazy nor genius. It's irrelevant. Right now, RIM reminds me of the mid-90s Apple, when the big debate about how to save the Mac revolved around whether or not to license the OS in the same way Microsoft did with Windows. We got to see the results of that, which was Apple having a lot of third-parties eat their lunch and almost kill the company. The real solution came years later when Apple killed the Classic Mac OS and started over with something new and exciting.

The point is, asking what to do with the BB platform is asking the wrong question. The Blackberry platform is dead. The real question is whether or not the current leadership at RIM has any vision and can get out ahead of the next big thing. I don't see any indication that they can do that. RIM is a one-trick pony and its best days are behind it.
Guest
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Guest,
User Rank: Apprentice
1/5/2012 | 11:04:16 PM
re: RIM Might License BlackBerry Platform: Crazy Or Genius?
QNX was around long before Android and it has always been perfect for mobile devices. QNX is very powerful and PlayBook was the first device that could actually support it. QNX could not have been supported on a mobile device pre-2010. While this makes it an incredibly stressful experience for RIM given it wants to get it to market ASAP, it will put RIM ahead of the pack in the long run. The bones of QNX are better than iOS and Android. It probably has a ten-twenty year shelf life.
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