Non-options For RIM

An article on the CBC site points out some options for RIM to try to ensure their long-term survival. They also try to show some highlights for RIM, in terms of marketshare in particular regions. The marketshare bit, plus one of the “options” described in the article caught my eye, mainly because of how pointless or poor they actually are.

Regional Success Isn’t Global Success

One of the points, made later in the article, is that the Blackberry outsells the iPhone in some markets. However, the article is curiously silent on Android, as if the iPhone is RIM’s only major competitor. My response: so what. Yes, RIM sells well in some emerging markets, some markets in the Middle East and in its home market here in Canada. But in the big markets, with the big volume, the Blackberry is a poor, and often distance, third. When you look at the global picture, RIM has fallen very far behind (dropping to around 6% of the global market, behind second-place iPhone with 23%).

To make matters worse, the numbers for RIM are dropping. Not only is marketshare down in the most recent quarter, but total handsets dropped as well. In past quarters, RIM could at least count on an increase in handset sales, mainly because of the “rising tide floats all boats” principle. Now it appears that even that isn’t helping, and with their new Blackberry 10 devices due sometime later this year, it will make it worse.

Refocus On Enterprise? That Won’t Help

The piece also points out an “option” for RIM: return their focus to enterprise and government, and leave the consumer market to Apple and Google. There is a problem with that. RIM is losing the enterprise as well. iOS devices surpassed Blackberry devices in the enterprise around the middle of last year, and their share of that space is growing. The rise in consumerization of IT and Bring Your Own Device (BYOD) has people brining their own personal devices, and a lot of those are iPhones. Beyond that, though, companies are choosing iPhones as the corporate phone. This isn’t just because more companies are allowing personal iPhones in their infrastructure. They are actively selecting iPhone as part of their enterprise.

To assume that “enterprise” and “consumer” are two, distinct and separate markets ignores the fact that the lines between two have blurred, and will continue to increase in fuzziness. RIM did have a pretty good lock on the enterprise space. They have better and more secure integration than is available with iOS or Android. But RIM got complacent, made a half-hearted stab at the consumer market, and took their eye off of the enterprise ball. They simply assumed that companies wouldn’t want to select a device that RIM seemed to view as a “toy”. That complacency and arrogance cost them.

RIM Needs Real Options

Trying to survive on sales in emerging markets, where margins are razor thin at best, and attempting to recapture the “glory days” of enterprise dominance are not solutions for RIM. Any bet on a resurgence because of Blackberry 10 is a very, very long shot. WebOS was supposedly “better” than either iOS or Android, and it died an ignominious death. Some claim Windows Phone 7 is superior technology, and it hasn’t made a dent in the smartphone market. Sure, it could turn out that BB10 is a huge success. There is certainly a non-zero probability of that happening. But the dearth of apps and content, the main reasons that current Blackberry models continue to decline in sales, applies to BB10.

Technological superiority won’t matter if people can’t (or don’t believe they can) do something useful beyond the basics: phone calls, e-mails, social media, calendars, contacts, notes. Even if BB10 is “better” than iOS or Android at those functions, that isn’t enough. People have extended their phones with apps, and use them to consume content. Would you buy a “better” PVR, but in doing so, you have to give up 90% of the channels you want to get the “better” core functions? Not likely.

RIM’s real options are to sell the company wholesale, or to licence the best parts of what they do: infrastructure, enterprise integration and security. The handsets and operating systems are not their strengths anymore.