Does RIM's "Huge Loss" Signal Wider Handset Market Deterioration?
zacharye writes "RIM was expected to deliver a nightmarish, -30% year-on-year revenue decline into the May quarter — the company issued its latest profit warning just four weeks ago. Yet it ended up missing the lowered consensus estimate by 10%, generating just $2.8 billion in sales. The reasons for RIM's decline are well-known and will be rehashed again over the next 24 hours. But the size of the F1Q13 sales miss raises another question: apart from Apple and Samsung, is the handset industry drifting into serious trouble?"
Look at apple's profits.
And please stop the sensationalist question mark titles.
I'll venture a guess that in 10 years, RIM's fall from grace will probably be a great case study in business schools around the world.
How a successful company managed, through horrible fore-sight, atrocious product management and lousy business management, to squander an insurmountable lead in the enterprise market is amazing.
On to the story at hand: there is no doubt that the wider handset market is in all kinds of trouble. Apple clearly makes most of the profit, and Samsung picks off what is left. What does this leave the other players? Nothing. Clearly there is no competition in the iOS market, and Samsung has a huge lead (and massive fab capabilities). Unless one of the other players steps up and makes a handset that, you know, you'd actually want, then they're dead.
End of story - this isn't that complex. Make a product people want. The competition has showed you the way....
Cemil.
No, it's not the end of the handset industry, nor are they in trouble. It's an industry that 80+% of the users toss their perfectly good handset every 18-24 months because their contracts generally make it worthwhile to do so. Just try to get a decent contract with a reasonable monthly fee that's lower than getting the same contract with a brand new shiny phone attached. However, just because you make a handset doesn't mean people will buy it, especially if that handset comes at virtually the same price or within easy disposable income range of the top of the line handsets. Why would you buy a Yugo if for $10 more you can own a Lexus?
The cesspool just got a check and balance.
Just bring out a decent product. Nokia's N9 with zero marketing, blocked in all major markets and Nokia's own CEO briefing against it still managed to sell millions of units.
Because it's a superb smartphone with a superb OS.
RIM will bounce back if BB10 is as good as it's supposed to be, on decent hardware, in multiple form-factors.
Plus, they parterned with Microsoft.
They are not the first to fail this way.
Sad to see a great Canadian tech company fail, but they just didn't keep up with changing market demands. Everyone now wants the latest games and movie s on their smartphones. It's not all about text and email anymore.
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This is a RIM problem, not an industry problem. RIM's sales are way down because their technology is outdated and they can't get their shit together. If it were an industry problem we'd be seeing reduced volumes and purchase prices across the board. By that measure Huawei's success is a more accurate harbinger of what's to come.
Can't help but think that RIM's current situation is a lot like what Apple faced with Copland back in the mid-90s. After several years of trying to build their own next-gen system they gave up and purchased NeXT, which we now know as OS X. After numerous OS delays and corporate near-death experiences they finally launched OS X Public Beta in 2000. Given that 90% of current Mac users never touched Classic, there is little shared memory for the bloated, buggy mess that was Mac OS 6-9.
RIM was in the same place two years ago, with a nasty software stack and no ecosystem. They responded by buying QNX. Even with the latest delays they are still going to from purchase to market faster than Apple did with OS X. Same fundamental problem, same solution, dramatically different outcomes.
When you have nothing left to burn you must set yourself on fire
Inelastic demand ...like milk and eggs at your local grocery store...if you're out of handsets your customer goes over to the competition shopping. No handsets, you're out of business. RIMM handset delay puts their customers infront of the competition...if ever they come back to RIM - HELL will freeze over.
Who can make a phone with all the patent traps?
Handset industry apart from Apple and Samsung? Which handset industry?
nope, nothing to worry about - unless you happen to like/work for/own stock in RIM. this is just the handset market maturing
two examples of market consolidation: /.s remember multiple computer manufacturers from the 1990's that aren't around
once upon a time there were a lot of car companies in the United States
I'm sure a lot of
RIM might be in a death spiral but I wouldn't write them off yet. As far as I can tell they have the "corporate email" market cornered - which is a nice thing to have, but tiny compared to Apple's iPhone dominance.
I'd like an iPhone 4s myself (and when upgrade time rolls around I'll probably get one - but I'll wait for the prices to drop when Apple releases iPhone 5). Unless my employer requires it I'm not going to get anything from RIM ...
competition is usually good for consumers (drives innovation, lowers prices) but that it also means there will be "winning" and "losing" companies in the marketplace
So once again the "/. question in the subject header == False" - Apple and Samsung are simply making superior products and/or out competing RIM (and/or using the patent system better)
It ain't what they call you. It's what you answer to. http://mylyceum.us/
I'm getting really tired of these lame Slashdot "articles" about some schmoe guessing what industry tends will be and who will own what market share. Who cares? I sincerely doubt that anybody reading Slashdot has any real, vested interest in what any particular electronic gadget industry is going to do.
I don't respond to AC's.
Microsoft expanding their ActiveSync license program as well I would contribute to helping the iPhone succeed. Suddenly you didn't need to invest in expensive BES licensing costs, windows licensing and hardware costs just to connect a phone to a mailbox. When that happened I wondered just exactly how Blackberry would react to the market, and well they didn't.
Why would you buy a Yugo if for $10 more you can own a Lexus?
Because one may no longer drive a Lexus?
Or, just as a statement, Yugos may become fashionable again? (those bastards with disposable income... one can't predict what they'll have in mind next).
Questions raise, answers kill. Raise questions to stay alive.
I still don't know how Lexus became popular. Is it just the US that holds that opinion? I'm pretty sure everywhere else they're viewed as somewhat crappy cars.
Given that smartphones are the most widelydeployed and used general purpose computers in hands of individuals, I guess they do care. It's the future of computing.
They were in the market of cheap buffet style email for corp users and managed to get there by being convincing carriers to not price by kb with their platform.
The best chance of survival for them is to buy a T-mobile or Sprint (with the iPhone deal RIM is screwed now) and offer corp. plans for $30 a month, and then building an enterprise app ecosystem around a solid platform as QNX. No sane company will pay $100 per employee/mo if they could pay $30 and have a platform that can run apps just as good as the alternatives.
They though they where a premium brand with a premium product and now even if the products excel, they are irrelevant. If given a choice, most will prefer widely used platforms w/hundreds thousand apps and solid development tools.
Buying a carrier and being the low cost provider for corps is one of the few things that could save them - but may be too late.
unfinished: (adj.)
Stephen Elop decides to kick back, relax - loads up Slashdot for the first time in years and sees...
But the size of the F1Q13 sales miss raises another question: apart from Apple and Samsung, is the handset industry drifting into serious trouble?
"Hey, that was uncalled for!"
#DeleteChrome
soon everybody is getting a RIMjob.
is that RIM made lousy management decisions, has a bad product, and is now paying the price for that. That's a good thing.
HP/Compaq, Lenovo, Acer, Asus, Dell, Samsung, Sony, Fujitsu... who among these would you call small players? A small player in my mind is a store chain that sells rebranded or white label computers, not an asian mega giant.
Just because YOU don't shop around, doesn't mean nobody else does.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
The beauty of MeeGo is that it is Linux, you already got a ton of software, real software not fart apps and they are FREE! Developed by developers who have a heart for their application, not a desire to charge big bucks for inferior software people have gotten for free for decades. Reall, 1,59 for for a video player that doesn't even support basic formats? No thanks.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
We only have a handful of large players in the handset industry right now.
If it's like the PC industry, we'll get exactly what we want for dirt cheap from any one of a 1,000 different manufacturers operating on razor-thin margins.
If it's like the PC industry, we geeks who build our own rig want to build our own handsets
When can we do that?
Muchas Gracias, Señor Edward Snowden !
If BB wants to survive, they should dump BB10 and take the Android OS, with an BES e-mail app and intergration to try and reclaim the market. Mabye even rebrand handsets instead of building their own. Although i will say my old BB8530 was a rugged and trusty handset, and traveld many thousands of miles with me, needing only a charge every few days. We'll see how its replacement (an iphone) will do.
I still don't know how Lexus became popular. Is it just the US that holds that opinion? I'm pretty sure everywhere else they're viewed as somewhat crappy cars.
I'm pretty sure everywhere else they're viewed as Toyotas.
Maybe the novelty of new phones has worn off, especially now that almost all smart phones look the same. People call and text each other and once in a while they need to pull up an email or look at a map. Everything else is just toys. 5 years ago this was nerdy fun for Joe Consumer, but now he's playing with his tablet and doesn't care so much about his phone.
RIMs fall isn't indicative of the rest of the handheld market, it's more a result of the market's success to leave competition behind. It's seductive to take a collapsatarian view of things tho
Pretty sure they're viewed mostly as "Toyotas with a higher price tag" in the US as well, except for the people that buy 'em of course. Not that there's anything wrong with Toyotas, though. They're certainly doing better than our nationalized automakers.
Can you be Even More Awesome?!
I'm not sure you understand what T-Mobile or Sprint would cost....
I chose Lexus (Toyota) because it was something other than the usual Mercedes/BMW statement, and I didn't feel the need to go to extremes. On the statement about "crappy", I think I'd rather have a "crappy" Lexus (since that's a small subset of Toyota's vehicles, and Toyota does have some truly crappy cars) than a "good" US car. Less maintenance, less trouble, and a longer good driving life.
The cesspool just got a check and balance.
At the least, you deserve a funny mod. I'll wager that Yugo's will become fashionable again probably about the same time as parachute pants return as the hot fad item. But that doesn't detract from the current situation that they need to market the equivalent of Yugo's at a Lexus price to make a decent profit. (Sorry, that car analogy is now dead) The supply/demand curve just doesn't favor their desired pricing model and won't as long as those highly subsidized desirable phones are available for pennies more.
The cesspool just got a check and balance.
First, RIM is in this pickle because they got complacent when they were dominating the mobile market with one of the most popular devices on the market. Instead of innovating all they did was tweak their designs a little and create designer models of the same thing. The story of RIM is often repeated where a market leader is suddenly playing catch-up when a distruptor enters the market with something dramatically different. RIM is a story of how everything is being done wrong by a mobile device company, even the announcement of a delayed BB10 devices is hurting the company because the remaining Blackberry fan boys are not going to buy a BB today that is going to be replaced tomorrow.
Secondly, the market will not tolerate ONE maker of all their mobile devices. Apple will not become the ONLY player in the mobile device market, where everyone owns an iPhone or iPad or iSomething. Clearly it is obviously that as popular as iThings are, Android devices are growing quickly and outnumbering iOS devices. Sure, maybe Android devices are not as good or flashy or refined, but there are significantly more people out there unwilling to pay the Apple tax for a product. In any market there are fanboys and the fanboys are NEVER going to agree on ONE thing, that is an absolute guarantee.
The question is then how many players in the mobile market will consumers tolerate? So far it looks like its only 2. RIM lost their market position through complacency and Microsoft is trying to claw their way in, but it seems consumers are only interested in having 2 options, iOS or Android devices.
I think RIM is done, period. Any speculation for the company to rebound belies a repetitive habit for failure that began when the iPhone and Android devices were released. RIM would have to shift modus operandi dramatically before it could even be considered a competitor, and I don't think they have it in them. What RIM should do now is try to position themselves as an attractive company to buy, I am sure the patent portfolio for RIM is a goldmine for Apple, Google, or Microsoft and would significantly boost any company looking to compete in the mobile market. But ultimately RIM technology needs to be directed by an innovator and there is nobody at RIM that can claim that position.
I haven't thought of anything clever to put here, but then again most of you haven't either.
For me RIM has always reeked of arrogance. The people who use it, the people who sell it, the complicated plans, the whole dominating of companies, right down to the set up of their servers; all arrogant. There was nothing happy about their phones. iPhone users definitely have a "look at me, look at me" thing going but with apps like angry birds there is a more fun vibe with the iPhone. Nokia (I know it's Finnish) always had a Tutonic, "My phone is better engineered than your phone." thing going.
I don't know if RIM encouraged it but so many companies handed BBs to their managers and crap flip phones to their grunts. There often would be this huge cut off where some arbitrary level of employee would not be allowed to get a BB. To make it worse RIM gave the IT people the ability to select and block various features as they would choose. IT people are famous for pissing people off with their arbitrary policies so more Apple fodder. This sort of elitism just fed the Apple monster giving the joe employee the desire to buy a better phone for themselves. Then it got nasty for RIM when the top top management would break out from the RIM stranglehold and force the IT people to get them an Apple.
In the end all these companies ended up handing out BBs to employees who used their own money to get an iPhone/iPad for their own use. Pretty bad when your product is free and still can't win the hearts and minds of all but a few hard core MBA types.
Their phones stink. The only phone they can sell now is a waterproof one, one the PTB can shove up your ass and spy on you with while you pay for it
This country is going to shit. There is a distinctive shit smell coming from the Supreme Court and the IRS, from the POTUS and the house, from the senate to the DHS, from TSA, to DEA, from Syria to Libya, from Iraq to AfPac, from your local city council to the UN, from ABC CBS FOX PBS NBC. This is their new party. The SHIT party. Members present little D's and R's for democrat and republican, but their TRUE PARTY is SHIT. Half you dumb motherfuckers don't even know what agenda 21 is. The other half don't even know what CAFR is, that the "budget" they say is shit is actually fixable 6 times over.
Shit belongs in the sewer, and that's where the United States of America is going deeper into the sewer. Some acclimate to the smell, but eventually the depth will be too much shit, some say the shit will hit the fans, all I know is there are more fans of shit (like some kind of shit leech) than people who don't want this unconstitutional shit anymore.
Politicians now are opening up their First Chackra's and letting spew out their party of shit. (I KNOW this because I fucking channeled it from the Galactic Federation of Light psyop) Voters now have to figure out if they have globalist ties, what the buzzwords and keywords for the latest way to hide their shit in plain sight, just remember that distinctive smell, it's globalist NWO shit. It's in your banks, it's in your government and it's in your PHONE.
At the least, you deserve a funny mod.
Funny or not, what I suggested doesn't contradict your line.
What I said amounts to: for them to survive, they'll need to find a niche; either dirt-cheap to make (e.g. the "senior/elder mobile phone" is so basic most probably it costs pennies to make, but is still sold in the $40-80 range) or to sell it as a fashion item at truly ballooned prices. Being "smart" or "enterprise targeted" won't do it any more: too many other brands are already smart enough and "Bring your own device" + "cloudification" move is in full swing
Questions raise, answers kill. Raise questions to stay alive.
we geeks who build our own rig want to build our own handsets
When can we do that?
Hams do it all the time. And you don't need Morse code anymore to get a ham license.
the difference to pc industry is obvious though, you can't as easily just buy the parts and throw them together
You can't with a laptop either.
also - bb only ever had a lead in very few countries. they were never a truly global contender
And for a long time, Nokia was without a hit in the United States market. Even people who wanted an N900 couldn't walk into the store and get one.
Soooo..
RIM is finally taking it up the ass. 5000 layoffs today. That's not the shocker. The shocker is they have 15,000 employees! DOING WHAT?
Here's a Canadian Engineer's perspective that you won't hear on the news.
First off; I have to use one of these flaming pieces of crap for work. Specifically, a Torch 9810 and a Playbook. They're so bad as to be borderline un-useable. Apple bias aside. Everyone I work with now carries two phones. One for secure network access and one for everything else. This is a bad f--king sign.
But that's an aside.
Back when I was in University, Nortel used to be a bad-ass R&D wing of the telcos here. If you make a phone call, you use tech they invented. Bell's original work, and Marconi's first tower transmissions were here. There was a great, long-standing communications industry tradition.
Then in the late 90's, I noticed something. All the idiots I couldn't stand in school started doing their co-op terms at Nortel. Then they went on to full employment. These aren't stupid people, they're just the unmotivated f--kheads looking for a job, not doing it for the love of the art or any particular aptitude.
There's a place for them, and a place for me, never the two shall meet. Shortly after the f--kheads moved in, they went the MBA route, and the f--khead MBA culture took over, the good engineers left, and a decades-long institution collapsed in bankruptcy. The demise of Nortel was well publicized here and in the general media.
Guess where all those fuckheads got jobs after?
Yes, the very same f--kheads bloated and tanked RIM with the very same mistakes. They hired the same unmotivated, mediocre people who do what mediocre people do best. Run s--t in to the ground and hire useless, ineffective management on management.
I'm thinking about following where these idiots go so I can short the next company to go.
People are stupid. On the upside, maybe I can get rid of the @#@$!ing pos work phone sooner rather than later.
No mercy. They deserve that they get. The markets will salt the earth in Waterloo before they're done.
I wonder if there's time to short RIM on the way down to $1.00.
Since the tax penalty or getting health insurance now costs right around the same or more per year as a smartphone with a data plan, I'm thinking they'll be declining in the near future whether they are currently or not. And don't pretend while you're driving through a poor neighborhood that you don't see people with a smartphone in one hand and a cigarette and 2 dog leashes in the other. Guess which one of the three they'll be eliminating.
For the record, my company dropped all our blackberries 3 months ago in favor of Android because their awful memory leak of an enterprise software suite was a nightmare, not because we decided we don't need smartphones.
I understood what you said and largely agree with you, my apologies, I wasn't clear. My opinion is that for an entity like RIM to survive at anything approaching their current size, they need a whole lot more than a niche - they need something profitable with some scale to it. Granted, your "elderly" concept has a large potential market, but generally their income level is lower, so you need to make seriously inexpensive product to make any money off of it.
The cesspool just got a check and balance.
The open, Linux-based Freerunner... I still have one, with its nice, large, colorscreen (that broke in 2 weeks). When it worked, I ran all sorts if things on it, like TangoGPS on what was then --and probably still is the only open-source GPS in the world.
All in all, this probably means their economic model was wrong... they died.
Herve S.
This is the way all markets work all the time. There is a period of diversification and ginormous profit to be made and then the bottom falls out and all hell breaks loose. The doomsayers gather in force and post sensationalist remarks on /. and then a few months or even a year later after all the big boys buy up the small companies, boom! The whole mess starts all over again. This is why they showed you the economy as a wave in school. We are on a part of the upswing or downswing all the time. We never know for certain whether or not we are on the crest or trough until we look back. Welcome to economics 101.
NO. Take your FUD and go to Stormfront or Alex Jones.
Nokia is the only person sweating...
That's true of iOS, but how is it true of applications on Android?
It's not true of iOS. Anyone can jailbreak if they desire flexibility and alternate app sources.
Also iOS is not free of those things either, many people have to root devices for flexibility in installing updates to the OS. Also the apps are in theory almost as locked down.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Not "end up with", we're already there. We already have 2 or 3 large players, but if you're thinking in terms of "competitors" you need to look at originators of the products, not the manufacturers.
We have: apple, google, microsoft.
There really isn't anyone else in the handset competitor category right now. Google entails: every major manufacturer. Apple entails: apple (via every manufacturer). Microsoft entails: every major manufacturer (eventually). So really it's everyone developing new things using the same subset of tools and trying to differentiate, but behind the scenes almost nothing in manufacturing has changed in more than probably 20 years.
RIM's loss is simply another symptom that we are accelerating toward the singularity. Nothing to see here, as everything is obsolete the moment you see it, so move along...
Authority questions you. Return the favor. -- d474
I know that no numbers exist in a vaccuum, but am I the only person who thinks that it is weird that a corporation can make billions in sales and yet be virtually dead?
Anyone can jailbreak
Provided the DMCA exemption allowing jailbreaking is renewed. That's not guaranteed, and if it isn't renewed, Apple could use the precedent in Sony v. Hotz to shut down U.S. jailbreaking.
Also the apps are in theory almost as locked down.
The differences I'm referring to are the following: 1. All major Android phones and tablets support adb install; in fact, Google requires this as a condition of licensing the Market application. 2. Android has an IDE on the Market, unlike Apple which has historically been reluctant to approve tools for programming on the device. Or what has changed in the three years since this story?
That is exactly why I left AT&T and got a prepaid plan with Straight Talk. I bought an unlocked iPhone and now I'm not stuck in a two year contract. My old contract expired 18 months ago and I was tired of paying "extra" and didn't want to sell my soul for another two years.
I will NEVER go back to contracts again. It's a sucker situation. You either lock yourself to a carrier or you overpay for your service. Often it's both.
I think you've got it backwards, the retail strategy isn't the problem -- BB still has healthy sales, particularly outside the US and in the lesser-developed markets, but their sale price per handset and their profit margins have been declining for years.
Handsets is a design and supply chain business. Samsung owns it own chip foundries, self-sources most of its own components and does a lot of its own manufacturing; Apple makes big capital plays and corners the markets in high-end materials, components and inputs, and funnels them through one of the deepest and most efficiently managed manufacturing supply chain in the business.
There are still plenty of BB customers out there but BB never made the transition from being a singular prestige brand to being in a competitive environment. Samsung was always in that position and Apple has learned so many lessons over years of screwing up they were ready when competitors came looking for them.
Don't blame me, I voted for Baltar.
Provided the DMCA exemption allowing jailbreaking is renewed.
People were jailbreaking before that, and they would be after. What you can DO is not modulated by anything so stupid as a permission slip.
SHAME on a Slashdot reader for not understanding that intrinsic fact of life.
1. All major Android phones and tablets support adb install;
Jailbreak, so does iOS.
2. Android has an IDE on the Market, unlike Apple
Try Again. Or don''t, if you can't get it right to begin with.
Perhaps you forgot that you can use gcc (or llvm) on a jailbroken iPhone to compile also...
The simple fact remains that for technical hackers iOS is the superior platform, because there are no limits and it's much easier to hack (by that I mean the traditional sense of mod) any app on the system, even third party apps.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
RIM's wider handsets are suffering from huge signal loss?
I've come to the conclusion that mature markets seem to gravitate towards 3 major players [...] and a bunch of also-rans
What are these mature markets with few players?
Other than Microsoft, Nintendo, and Sony, what makers of set-top gaming devices are left? PC makers tend not to market their products for set-top use.
Is the handset industry drifting into serious trouble? Yes, yes it is. One problem is profitability for the companies who make the devices. Another problem I believe is that the consumer (at least from what I see) is tired of cheap crap.
I for one won't buy anything other than an iPhone, because the quality of almost all the other devices is so poor in comparison, it makes no sense to waste my money on the junk they offer. Samsung seems to have the next best quality, but I won't buy from them because they're the new rip-off company, and I don't support that kind of behavior (I vote by wallet).
I think the market is basically tired of 100's of junk products to choose from, and therefore they are quickly being weeded out.
Flat touch screen devices like the iOS, Android, and winmobile devices are multifunction, highly customizable tools. The Blackberry remains a mobile enterprise email delivery system. Yes it can web surf, yes it can be customized with apps, but this functionality tacked on to an email device framework. Touchscreens are by their very natures omni-functional devices. RIM's adherence to a failing model is what's killing them.
it's the difference between having weak legs and weak arms. Google has weak legs, it can not stand.
Do you really need legs though?
I think he means you can't run software you want if it conflicts with the wishes of Apple or the Carriers. [...] MS has never done that
Windows Phone 7 has the same lockdown as iOS and even the same $99 per year to unlock your own hardware. In fact, Apple got the idea for this $99 per year from Microsoft, which charges $99 per year to run your own XNA games on your own Xbox 360. The original Xbox was even more selective about who was allowed to develop, as is the Xbox 360 in countries without the Indie Games store.
People were jailbreaking before that, and they would be after.
Would you continue to recommend jailbreaking even if Apple were to succeed in a string of lawsuits analogous to Sony v. Hotz? If you get caught providing jailbreak tools, good luck breaking out of real jail.
It just signals that open source stuff beats proprietary crap
Now we just need someone to make become the Apple of telecom and get us out of 6 strikes and rediculous data caps.