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."

Comments

Kind of early to predict that

[iONiUM]

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..

Re:Kind of early to predict that

[Metabolife]

I have a feeling that they'll begin to focus more on software, perhaps taking their BBM service to other platforms first.

They should do what they did initially.. be rock solid on the business end, then phase back into the consumer realm.

Re:Kind of early to predict that

[swb]

My sense is that they jumped the shark by failing to either make BES free or eliminate it and dependence on RIMs network completely.

I can remember the pre-active sync days when it got ugly within organizations when the last BES license got used up. They were expensive and buying another block wasn't always viable.

Just as soon as Activesync became viable and the onslaught of WinMo phones that supported it came out I began to see customers at the mid/small level abandon the expensive and complicated BES for direct SSL communication. No more dedicated BES server, no more expensive licenses.

Had BES become free to use it might have helped prevent the loss of those markets; eliminating it completely would have been even more beneficial.

Re:Kind of early to predict that

[hawguy]

Just as soon as Activesync became viable and the onslaught of WinMo phones that supported it came out I began to see customers at the mid/small level abandon the expensive and complicated BES for direct SSL communication. No more dedicated BES server, no more expensive licenses.

We saw the same thing happen when exec's started clamoring for iPhones. But most of them came back to Blackberry when they realized that they were missing some important functionality, (like the ability to see availability when booking a meeting), had problems with dropped appointments accepted on their iPhone, and have had problems with missing emails -- emails that show up in their inbox on outlook and blackberry, but not on the iPhone.

For me personally, the big thing that's missing on my Android/ActiveSync mail client is a way to configure message filters to decide what to deliver to the device. I get some status messages from some devices that I generally want to read during the day, but don't want to see them on my Blackberry (and don't want to get woken up at 3am by a flurry of unimportant informational status messages, but I do want to be woken up by the ones that say we're out of disk space).

I have about a dozen filters on my blackberry to filter out the noise, and though I can set up Outlook filtering, the kind of filtering I want to do is client-only, not server side, so if Outlook isn't running on my desktop, the messages don't get filtered.

The Blackberry has another nice feature that saved my butt once - I was out of town, and our VPN concentrator failed and didn't failover to the backup device. No one could VPN into the office to fix it or even diagnose. Since my blackberry is essentially on our internal network, I was able to ssh into the backup concentrator, reboot it and get it online. All while 8000 miles from home. Took me 10 minutes to fix it, while it would have taken an hour or two to get someone to the office to fix it. I realize that this also makes the blackberry a potential back door into the network, so most people don't have unrestricted network access on their BB.

I don't think Activesync is going to push out all of the corporate RIM/BES users just yet.

Sensationalize much?

[ArhcAngel]

WOW...I guess that's why I don't read IT World.

Re:Sensationalize much?

[thePowerOfGrayskull]

Indeed. WE'll complete ignore that this is a debt free company with a strong portfolio, significant income, and expanding user base, and go right to the doom and gloom headline.

RIM RIP

[tigqc016]

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)

Stability

[TheNinjaroach]

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..

Bad news for RIM Employees

[Antarius]

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!

Even if not they should be fine

[Sycraft-fu]

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.

Troubling Signs, at the Very Least

[strick1226]

The fact that the Playbook tablet was released without a native RIM Email client--and also did not include the official BlackBerry Messenger app--made me stop and reconsider just where Research in Motion finds itself these days.

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.

Re:Troubling Signs, at the Very Least

[pr0t0]

Your last line reminds me of something I've wondered for a couple of years now. Why doesn't the company whose server and desktop operating systems and software often found in the enterprise, team up with the company whose handsets are often found in the enterprise? I mean in the wake of iOS and Android's success, I don't see the MS/Nokia deal being enough of a defense...at least not in the US anyway.

BUT, I think a MS/RIM partnership would be HUGE. RIM's security and notification system, MS software and network integration; it'd be a big win for enterprise. I could see many businesses feeling comfortable putting their mobile eggs in that basket. I'm not even a real fan of either company, but I would feel like the mobility needs for my enterprise would have a secure road map for development, infrastructure, and support.

Eh..

[fuzzyfuzzyfungus]

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.

Time to trademark the "DroidBerry"

[bogaboga]

Sooner or later, RIM will have to ditch BlackBerry for DroidBerry.

Wouldn't be surprised

[neiras]

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.

It started when...

[Lumpy]

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?"

Re:Recent marketing

[cyber-vandal]

Same here in the UK. Blackberries seem to be in the phones of the young and trendy (i.e. not me ;-)). I see plenty of cool kids with them and very few with iPhones. The iPhones seem to be in the hands of rich students or middle-aged people who wish they were still cool.