Slashdot Mirror
RIM Collapse Beginning?
jfruhlinger writes "After the announcement of disappointing BlackBerry sales last quarter, RIM shares started to plummet. Blogger Chris Nerney wonders if this isn't the beginning of the company's death spiral, with the exodus away from RIM's BlackBerry platform too far along to stop and the company too small to compete with huge rivals like Apple and Google."
While most indications seem to point in that direction, considering the playbook was not well received, and blackberry's current flagship devices are out-dated, at best, I feel it's kind of early to make this kind of claim.
I think blackberry has probably two more quarters to get a solid business phone that rivals Android/iPhone devices that runs "OS7" (nobody really knows what that is yet, though I do not believe it's QNX..) If they can pull that off, maybe they'll have a chance..
WOW...I guess that's why I don't read IT World.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
and close them down as symbian before handing the keys over to microsoft
The put option volume on RIM stock is staggering. Just today alone there have been 67 put contracts sold at a $27.50 strike price for January 2013. Even crazier is that even though those contracts are currently $20 out of the money, they still sold in the $1.50 range... Certainly the market is betting that RIM is toast.
As many in the U.S. (and elsewhere?) have probably seen, they've been trying to market the BlackBerry as a social networks platform... quite explicitly at least, for "flirting." You know, the very unrealistic ads featuring hipster boys and girls raving about how BBM lets them connect. (Finally!)
Anyway, it's a huge departure from what people associate with BB and is obviously a bit of a desperation tactic. You can bet they're trying to cash in on the affluent youth, but if it's backfiring, it may alienate the corporate buyers from investing in the newer BB models.
A risky move, and unfortunately for RIM, it doesn't look like it will work.
It's always confirmation bias!
RIM has three options. 1) Continue the course they are on and become a niche player in smartphone market. 2) Transition to Android, port their systems to this new O/S and maintain their viability. 3) Get purchased by third party who transitions RIM's systems to third party's systems. An Apple purchase would be sweet as it would get Apple access to BBM and Enterprises, kill off competing Pad. Purchase by MS would mean port to WP7 (embrace, extend, extinguish). Purchase by Android marker would give similar outcome as an Apple purchase. as I see it (aisi)
RIM's Blackberry platform was years ahead of the game. Since then, Microsoft released ActiveSync which furthered their Exchange dominance and enabled email, calendar and contact syncing on just about every other phone platform available.
Meanwhile, RIM clings to their dying subscription-based revenue model and does nothing to address any of the stability concerns on their phones. We have C-level executives today using brand new Blackberries that lock up or fail to sync on a daily basis - and the best help our Email guys can offer is for them to remove the battery for a few seconds before powering the phone back on.
Seriously RIM, you have the most mature EMail-centric phone platform on the planet, but your phones are lagging behind the much younger competition in critical areas like stability. I guess that's why we're recommending Android or iPhone to all of our business users with phones up for replacement..
I went to eat some animal crackers and the box said, "Do not eat if seal is broken." I opened the box and sure enough..
My impression is that RIM phones are kinda like Jags. You buy them to 'show off' that you're a buisinessy type.
You'd expect a hot-shot businessman to use serious phones like Blackberries. You don't expect him to mingle with the rest of us and our androids or iOSes.
BB had been technologically backwards for ages. They barely have any touchscreen devices (its 2011 people), and the app store is more 'serious'.
So I don't know, I think RIM was dying for ages. Just that its a 'show off' phone, so its aimed at people who want to look 'fessional but don't know jack about technology. So lots of people.
In already uncertain economic times, this is terrible news for RIM employees and their families.
I propose we make some sort of action to make RIM Jobs safe!
Reason is the US government loves Blackberries. Seriously, it is like the one and only smartphone they use. There are a number of reasons for that, not the least of which being BB takes security very seriously and they are all FIPS certified and all that jazz.
So while they might shrink if their consumer market gets gobbled up, unless the government ditches them they should be fine.
The news that RIM suddenly just renamed BlackBerry OS 6.1 as OS 7 strikes me as an additional sign of desperate moves, too; the OS isn't a major change, as it's not the desired/anticipated move to QNX base or anything.
I used BB's for years, and appreciated them for their excellent email support at the time. The truth is, though, once I had a taste of the Android platform, my days with RIM were over. The nearly-perfect Google data sync and number of applications are big advantages but, for my wife and I, it really came down to the fact that the browser didn't lock up the whole damned phone when a website became unresponsive.
Perhaps they can pull themselves together here--it's not an impossibility--and they're still in much better shape than Microsoft in regards to the smartphone market.
The golden boys of Wall St. seem to have a very limited attention span for boring commodity producers who aren't continually heaping up the growth or delivering larger profits every quarter. It is unsurprising that they would turn on RIM rather sharply: RIM has, after all, fallen from being The phone of the Serious Set to being a smart-ish phone that lags behind Android and the successor to the sidekick among impecunious text-messagers. Party is over, dudes. Margins are set to be less exciting from here on in.
However, there is a large difference between having your share price plummet and "collapsing". RIM has consistently had, and will likely continue to have, the ability to deliver phones that squeeze reasonable performance out of hardware that is practically Nokia-esque in its distance from the leading edge. This means that RIM can afford to make their handsets cheap. Unlike other cheap handset makers, however, they have a relatively well regarded platform in terms of security and integration with enterprise email systems. Their aggressive pre-crunching of data before it goes over the airwaves(and the fact that their web browser blows goats through capillary tubing) also means that carriers are often pretty willing to make RIM data plans incrementally cheaper than those for smarter phones whose appetite for data reflects their PC heritage.
Given those two sets of facts, I would very much agree that RIM's ability to command exciting margins in the future is in the tank. Apple, among the mainstream, and high end androids, among the techies, have the premium niche sewn up for now. MS and HP's positions are currently unenviable; but both are fresher and more dynamic than RIM. The cheap seats will, increasingly, be dominated by semi-KIRFs running stock android pumped out by the assorted Pacific rim OEMs who used to be the anonymous servitors of brands you've heard of. However, given those two sets of facts, I would also argue that RIM should be able to embed itself fairly solidly in its niche, and hang on for a fair length of time. The market for boring business email phones is not exactly small, and RIM has by far the most mature offering in that area.
For a company that is still selling 15 million phones every quarter, and are only doing 40% more revenue year over year, they definitely sound like they're collapsing.
So they might not continue to grow at such an incredible rate. They're still making money hand over fist and certainly seem to have plans to fix the issues people talk about. I have a playbook and I'm generally impressed with it - lack of a few apps notwithstanding.
Sooner or later, RIM will have to ditch BlackBerry for DroidBerry.
Several years back I worked on some software for the Blackberry (pre-Pearl). Over the past couple of months I've written software for the Playbook as part of their runup to release. The experience was just as shoddy both times. Just getting started on a project is an exercise in intuition and quite the struggle. Tooling is spread across multiple archives; some of it is/was windows-only; documentation is poor or misleading.
I remember my former CEO standing in my office nearly 7 years ago with myself and a colleague, saying "Hey, I have [some senior RIM guy] on the line... Anything you want to say to him?" Both myself and my colleague looked at each other, then said "Tell him RIM treats developers like crap. We need better tools."
Not the most intelligent thing to say, I guess, but it was a casual conversation and we were both pretty frustrated. Of course, the RIM guy had no response.
RIM's attitude towards developers only works in an environment where they are the only game in town. They aren't anymore, and their enterprise customers' resistance to change is the only reason they haven't already crashed and burned.
Normally when there's an article where the answer is best left, "I don't know." It's usually shit.
However, the author of this article is making a pretty good case that RIM's screwed. Profits are down, marketshare is down, and developers are looking to develop for iOS and Android more than QNX and BB6.
I don't think it's that dire, not yet. The upcoming quarterly results are going to shellack their current stock price even worse and shake off the RIM faithful.
The big question is, what about next quarter? RIM doesn't need to be #1, or #2, or even #5. They just need to be profitable to honestly survive.(This is the maybe.)
The question I have for the BB faithful is whether or not RIM's going to start trimming out it's product tree and offer a more limited lineup of phones and focus on optimizing their OS or if they're going to go do something crazy. I think that the Playbook doesn't need to be a winner in the market, just drive sales for BB6 devices, and BB6 devices aren't bad at any rate. (This is the no.)
OTOH, if they were capable of that, they wouldn't have lost ground share in the corporate world to iOS and Android not to mention share in the consumer market. I've seen friends flee the BB Ecosystem after realizing their device model line of choice isn't getting upgraded. This would be the most likely and really sad big fat yes.
RIM's probably going to take it in the pants, but, they have some outs, let's see if they take them. Even if they pare out some of the more redundant lines, like having 4 or so models of the Curve, other BB devices with modern hardware and an optimized OS with better browser should be enticing enough to bring the BB faithful back to the fold. Just, leave Flash for the Playbook.
Non impediti ratione cogitationus.
They rolled over and gave the keys to everyone's kingdom to whatever whiny monarch or head of state that wanted it. It instantly destroyed their credibility as to the "security" of the data..
Honestly if they told the king of Saudia Arabia to stuff it up his rear the would have had a LOT of instant credibility to the business world. Instead they rolled over and said , "here this is how you read everyones emails, can we do anything else for you?"
Do not look at laser with remaining good eye.
RIM was a "one-trick-pony" company in a world where people needed the functionalities they now get from "ordinary" smartphones but which the telcos and phone manufacturers refused to provide. If iPhone and Android didn't happend when they did, I would probably own a Blackberry now simply because nothing else did Internet and e-mail decently, but they tried to milk that platform without innovating for far too long. They may or may not be in trouble right now but in 2 years - who would want to buy a new Blackberry?
It's easy to be prophetic after the battle but imagine if RIM made the first Android phones instead of HTC - they would be unstoppable now.
-- Sig down
Um, they fixed the browser in OS 6. It doesn't suck anymore.
Sure they might have to cut back a little or at least slow their growth, but they are still blackberry the classiest smart phone out their.
Troll is not a replacement for I disagree.