The two men eventually stepped aside and allowed Thorsten Heins to take the reins at the beginning of the year. The damage, however, was already done. Close to three months into Heins' tenure as chief, it appears RIM is ready to make those changes. But the backstory just got real interesting.
According to sources cited by Reuters, Jim Balsillie pitched a radical idea to the board. He wanted RIM to let North American and European network operators use its proprietary network to offer messaging and social networking services to low-end smartphones, including RIM's popular BlackBerry Messenger. Balsillie's vision was that this would allow carriers to offer smartphones with less expensive data packages attached to them. Volume would make up for the lower cost of the service. The board rejected the idea, and Balsillie resigned as a director as a result.
[ What will the new Blackberry look like? See RIM BlackBerry 10 Image Leaks. ]
Balsillie's idea had merit, but was not without fault.
RIM's hardware business generates the lion's share of the company's revenue. Sales of BlackBerry smartphones are a core part of RIM's business. At last check, about 70% of RIM's revenue came from its smartphone business. Services, on the other hand, accounted for closer to 20% of RIM's revenue, with software sales making up the rest.
BlackBerry Messenger is RIM's defining product. It's a combo text messaging / instant messaging client that lets BlackBerries send messages back and forth without counting against monthly text message limits. RIM has staked a lot of money on the draw this feature has for its smartphone. Earlier this week, in fact, RIM released new versions of Twitter and Facebook for BlackBerries that are directly integrated with its BBM service.
Licensing out the company's one ace in the hole might have added to its services revenue, but damaging BlackBerry sales could offset any gains made in the licensing terms.
RIM's board, instead, decided to pursue the idea of targeting emerging markets with low-end gear for the remainder of 2012 while it scrambles to reboot its BlackBerry business. The company hopes to launch new platform software and new hardware late in the year to better compete with Apple and Google, but by then it might be too late.
RIM already has taken some steps toward playing nice with equipment from other hardware makers. Earlier this month, it made its Mobile Fusion product available to businesses running its BlackBerry Enterprise Server software. Mobile Fusion gives BlackBerry admins within the enterprise limited control over select features of Android smartphones and the iPhone. The free product from RIM means IT can manage a slew of different platforms from the same console.
Even more interesting, Reuters reports that RIM had already packaged up the inexpensive messaging software for Android and iOS. It's ready to go, but RIM is sitting on it for the moment.
Perhaps the most bizarre aspect of this entire saga is that RIM has decided to pursue "dramatic change" after all. In late March, CEO Heins laid bare his plans to bring the company back from the brink of the abyss. Heins said that "all options are on the table." That includes potentially licensing out its BlackBerry 10 platform, divesting portions of the business, and possibly selling off some of its patents. Heins wasn't clear about whether RIM would put itself up for sale. But wouldn't licensing out BlackBerry 10 include licensing out its messaging services?
It would seem not.
Either way, RIM has its work cut out for itself. It has a lot of ground to make up, and the only way it can do so is if BlackBerry 10 is a smash hit.
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