RIM: THE END or Just a Passing Phase?

Research In Motion (RIM), maker of the famous Blackberry, has been going through a troubled phase of late. So what caused this sudden downfall of a company that oversaw the mobile business platform pioneer go from nothing to $10 billion in almost no time at all, to one that is chasing shadows nowadays. Let’s have a look at some of the glaring mistakes that led to this situation.

To begin with, Mike Lazaridis, founder and vice-chairman of RIM, was blissfully oblivious to the change in device trends and product features in the market, arrogantly stating, “BlackBerry smartphones will never have cameras because the No. 1 customer of ours is the U.S. government. There will never be a BlackBerry with an MP3 player or camera.” By the time Lazaridis’ eyes were wrenched open, RIM fell behind in the market to the iPhone and Android. And by the time they could put two and two together, it was already too late – their smartphone market share has plummeted; in the U.S., according to one estimate, it fell from 44 percent in 2009 to just 10 percent last year.

Another reason for failure was the fact that RIM never imagined, even in the wildest of their dreams, that the human race could ever look beyond their, apparently “smart” phones and could never envisage that a few years down the line people might actually want to advance, and start using mobile phones to stream videos and browse the Web. To quote a former executive of RIM, “There was no three-year plan at RIM. RIM would be proud of the fact that someone would only use 1MB of data in a month in 2005, and as a result, there wasn’t ever any extensive R&D done within the browser space”

Now, coming to the failure of the Playbook.

When compared to the iPad, the Playbook just gets blown out of the water. Also, RIM wasn’t exactly making a fortune from the sales, considering that the Playbook was sold at just under $199 – $299. In fact, it has already lost $485m last quarter due to the discounts and another $50m due to the email service outages in October ‘11. Another drawback was that the Playbook does not even have a native email and requires the Bridge app in order to receive emails and provide calendar functions. And the people didn’t exactly embrace this.

However, the Blackberry-bashing needs to take a pause, as there is a bigger picture one needs to look at to understand this failure. RIM knew that smartphones make up the majority of their hardware revenue.  And they want to ensure they sell their future smartphones, which will all be running the BlackBerry 10 operating system. By releasing the PlayBook beforehand, RIM gave BlackBerry 10 smartphones a head start as then they could figure out what went wrong with the Playbook and how to incorporate the improvements in Blackberry 10. In short, the Playbook was an experiment to test the waters and come out with a new and improved smartphone version that would suit the consumer demands.

Focusing on Blackberry 10, from what Vivek Bhardwaj, head of software at RIM’s European division, described, RIM seems to be finally learning from its mistakes of late. A particularly interesting element is that the keyboard learns and adapts to the way you type. But unique doesn’t necessarily spell new, as all Microsoft Windows Phone users will tell you. Other features, like a standard dictionary that predicts the message history and an improved camera feature aside, whether it matches up to already existing smartphones, would become clear once it is launched in the market. However, the future of Blackberry 10 remains quite bleak as in terms of uniqueness and creativity, it indeed has ‘berry’ little to offer over the current lot.

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