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New CEO Won't Stop RIM's Bleeding: Exclusive Research

IT pros are split on whether a bolder move might have helped the BlackBerry maker, but they almost universally agree that elevating Thorsten Heins to CEO won't help.

Investors and pundits have had their say on Research In Motion's recent management shakeup, and they're almost universally negative. The company's stock, which traded at more than $140 per share in 2008, now trades for about one-tenth of that. While worldwide sales of RIM BlackBerrys don't look that bad, the company's share of the U.S. smartphone market is plummeting, from 43% three years ago to about 6.5% today. Now that RIM co-founders Jim Balsillie and Mike Laziridis have given up their co-CEO jobs, handing the reins to former COO Thorsten Heins a couple of weeks ago, we wanted to hear what IT pros think about RIM's prospects.

More than 500 IT pros took our survey on RIM, and not surprisingly, what was once the dominant smartphone for U.S. business users is not-so-slowly being relegated to the IT history pages. When we asked about RIM's position in the smartphone market, just 1% of the respondents to our survey said the company is a leader positioned to grow its influence. Most respondents, 56%, said the company is a former leader, with its best days behind it, while 43% said it's a stronger player that's losing its lead.

More than a quarter of the survey respondents left comments about RIM's plight. Their sentiments wandered from sadness to anger to resignation. Their overarching view: Regardless of how they felt about RIM products, users are simply moving on.

One IT director in an educational institution put it this way: "The system is fantastic from the IT admin perspective but archaic and irritating to the user." Another summed it up this way: "BlackBerry used to be our dominant smartphone. BES integrated perfectly with Exchange, and devices were easy to manage from a central location. Recent outages, slower browser and network speed, and the lack of compatibility with applications have put BlackBerry at the end of the line." Said another commenter about BlackBerrys versus rival devices: "RIM [phones] are like the typewriter compared to the PC."

That's a hard notion to dispute. While the BlackBerry is a fine device for mobile unified messaging, iPhones and Android phones are mobile computing platforms. So it's not surprising that when there's a competition for pocket space, the more capable device wins.

[ See what InformationWeek's Fritz Nelson has to say about what's ailing RIM: For RIM, New CEO Is Not Enough. ]

But that doesn't mean IT managers are happy with this state of affairs. One IT pro offered this lament: "We really never have issues with our BlackBerrys. Now, running ActiveSync on an Android phone is nothing but problems. The built-in application for mail is worthless, and programs like Touchdown for Exchange on the Android are a pain to manage. With the iPhone we have no central management, but at least it usually runs the first time when connecting to Exchange via ActiveSync."

You can hear the echoes of Wang, DEC, and Novell admins who sorely missed the IT-friendly capabilities of their favored platform after it had been rendered obsolete.

Whether IT pros are happy to show RIM products the door or harken back to their heyday, the outlook for RIM in the enterprise is bleak. Currently, 70% of the respondents to our survey report buying BlackBerrys for their users, followed by iPhones at 25%, Android phones at 15%, and Windows Mobile/Phone at 2%. But only 35% of them expect to buy BlackBerrys 24 months from now, while 45% plan to buy iPhones, 25% Android phones, and 6% Windows phones.

Two years is a long time, particularly with new phones rolling out at a consumer market pace, but RIM will have to move quickly and decisively to shore up its brand--something few survey respondents think will happen as a result of the recent management shakeup. Only 5% of respondents think the former co-CEOs were not a factor in RIM's woes, but only 11% think the shakeup is sufficient to help the company. The largest percentage, 47%, think that the shakeup wasn't bold enough and that RIM needs new blood. Another 39% were even less hopeful, saying RIM is in trouble no matter who the CEO is.

The bottom line from our survey is that RIM is losing ground in the enterprise. Only 7% of respondents said their organization's use of RIM products would increase in the future, and just 15% said they'd maintain the status quo. The largest percentage, 45%, said they'll now support an array of phones, including fewer BlackBerrys. Fifteen percent said they're actively looking to replace RIM products, and 12% said they'd already gotten rid of RIM products.

RIM's newest phones address fundamental problems like screen size and touch screen capabilities. But users now expect to choose their own mobile devices for work, and while the Blackberry still has its fans, Android and iPhone continue to dominate mindshare. The Blackberry will have its place, for a while, in highly secure environments. But for just about everyone else, the preference is clear, and it's not for the Blackberry.

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Common Sense Guy
Common Sense Guy,
User Rank: Apprentice
2/3/2012 | 2:50:57 AM
re: New CEO Won't Stop RIM's Bleeding: Exclusive Research
You know what I see here. That as bad as the numbers are for RIM, they're worse for Microsoft. While it's not a phone, I just picked up a Playbook 64gb at the current fire sale. A very nice device, to my pleasant surprise. And yes, I also have an iPod Touch, just for comparison purposes. I use them both. So while the Playbook isn't a phone, it's a very nice tablet that just needs that new OS. After my experience with this device I'm a bit more bullish than I was. I honestly hope they can make a go of it, because the more competitors the better for consumers. Without competition Apple will be charging $1k for an iPad, sooner or later.
User Rank: Strategist
2/2/2012 | 7:07:25 PM
re: New CEO Won't Stop RIM's Bleeding: Exclusive Research
RIM's problem is not a functional phone. While on the surface, people tend to think of apps such as games or yelp, useful or entertaining, what drives corporate sales are in-house corporate apps. To that end, Apple has a corporate solution for buiyng 3rd party apps or creating your own apps and loading via your corporate itunes store - plus there are only two screen sizes. Android is more wild west but easy enough as it's more open for IT to do as they please. RIM cannot hope to compete because a much smaller % of users want their phones now AND they have tried to launch 3-4 DIFFERENT OSes (including Android) on a variety of devices with varying specs. So, even if people wanted to use RIM, it's another 6-24 months before it's robust. The bottom line is why bother spending money on a platform that employees don't really want? Because if you only develop apps for RIM, your employees will be annoyed and most likely carry two phones anyway and add addl expenses so why not just switch to iphones or Android, pretty much covering 99% of your employees?

RIm is done as a force in the mobile market. Sure, they can hang on - just like there are still people using WIN 98 or pagers but their time is done. They missed it - plain and simple. They thought they were gold. They thought they got a calvary with archers, how could ayone defeat a lightning fast horseback rider with arrow? Um, how about a tank?
User Rank: Apprentice
2/2/2012 | 5:21:55 PM
re: New CEO Won't Stop RIM's Bleeding: Exclusive Research
I'm not sure that our research does show that for BB10 devices. For the purposes of this story, I aggregated some numbers that we'll later (next week) break apart in a full report that will detail the data discussed here.

In terms of what IT pros expect they'll be supporting in terms of company provided phones (vs. personally provided phones that IT will support), here's how the data breaks down - we asked users approximately what percent of each they'd be supporting two years - what you see here is the median response:

Blackberry 7 or previous 25%
Apple iPhone 4 or previous 25%
Android 4.0 and beyond 20%
Apple iPhone 5 and beyond 20%
Blackberry 10 and beyond 10%
Android 2.x or previous 5%
Windows Mobile/Windows Phone 7 or previous 4%
Windows Mobile/Windows Phone 8 2%

At this point, the majority of IT pros don't think that their company will buy BB10 phones for their users, and when they do, they think the fraction of users who'll want them will be pretty small.
User Rank: Apprentice
2/2/2012 | 4:27:00 PM
re: New CEO Won't Stop RIM's Bleeding: Exclusive Research
Your research offers some hope for BB10 - if the devices are as good as they are touting, then perhaps the IT folks will be able to support keeping BES
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