BlackBerry 10 Delay Could Spell RIM's Doom

Research In Motion has postponed the release of its next-generation smartphone platform to 2013 and plans to lay off 5,000 employees. Is there any hope left?

Eric Zeman, Contributor

June 28, 2012

3 Min Read

How IT Views RIM's Future: Exclusive Research

How IT Views RIM's Future: Exclusive Research

How IT Views RIM's Future: Exclusive Research (click image for larger view and for slideshow)

Research In Motion delivered dismal financial results late Thursday. The company reported a loss of $518 million on revenues of $2.8 billion. That reflects a 33% drop in revenue compared to the previous quarter and leaves the company with about $2.2 billion in cash on hand. RIM sold 7.8 million BlackBerry smartphones, down 30% from the previous quarter, and about 260,000 PlayBooks.

In order to combat its financial woes, the company is looking at massive job cuts in order to save cash. It is eying a workforce reduction of 5,000 positions--about 35% of its remaining employee base. RIM believes this will help it save $1 billion by next year.

"Our first quarter results reflect the market challenges I have outlined since my appointment as CEO at the end of January. I am not satisfied with these results and continue to work aggressively ... to implement meaningful changes to address the challenges," said Thorsten Heins, president and CEO of RIM. I'm pretty sure RIM's shareholders aren't satisfied with RIM's results, either.

Of course, the worst part of RIM's results is news that its BlackBerry 10 platform is delayed ... again.

[ Wall Street has a dim view of RIM also. Read RIM Is Broken, Morgan Stanley Says. ]

BlackBerry 10 was originally supposed to launch during the first half of 2012. Earlier this year, RIM updated that to the end of 2012--nearly a six month delay. Now, BlackBerry 10 won't arrive until the first quarter of 2013, long after iOS 6, Windows Phone 8, and Android 4.1 Jelly Bean arrive en masse. By then, BB10's arrival may be too little, too late.

If Microsoft is smart, it will pull out all the stops for the Windows Phone 8 launch planned for the fall. Paired with the release of Windows 8, Microsoft has a real opportunity to deliver a deathblow to RIM. How? Not by convincing consumers to buy Windows Phone devices, but to convince the wireless network operators that Windows Phone is ready to be the third ecosystem in competition with Android and iOS. Microsoft should spare no expense to tout Windows Phone 8. It has the chance to put a nail in RIM's coffin.

Of course, RIM still offered a glimmer of hope in its results. It says that development of BlackBerry 10 is going smoothly and that its carrier partners are excited. But is RIM deluding itself with such talk?

"RIM's development teams are relentlessly focused on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready," said Heins. "I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience."

I'm not so sure. RIM has showed off very little of BB10 so far. Sure, it has a developer alpha out in the wild, which it says is exciting developers. But we need only look at the BlackBerry App World to see which platforms developers are supporting. RIM announced that App World has reached 89,000 applications. It launch in April 2009, and has been around for a little more than three years. Microsoft's Marketplace for Mobile launched in October 2010, and reached the 100,000 app milestone earlier this month.

For too long RIM dismissed one of the most important lessons taught by evolution: adapt or die. It didn't adapt to the iPhone and Android threat soon enough, and now it is at risk of dying.

At this year's InformationWeek 500 Conference, C-level execs will gather to discuss how they're rewriting the old IT rulebook and accelerating business execution. At the St. Regis Monarch Beach, Dana Point, Calif., Sept. 9-11.

About the Author(s)

Eric Zeman


Eric is a freelance writer for InformationWeek specializing in mobile technologies.

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