RIM Pays Off Nokia; Patent Dispute Settled

Today Nokia announced an agreement with Research In Motion to resolve all patent legislation between the two. The companies have been fighting over patents for almost a decade, most recently over devices with wireless LAN capabilities. The terms of today's agreement were not disclosed but it involved a one-time payment from RIM as well as ongoing payments. This agreement comes shortly after RIM's announcement that it pulled in $9 million in profit last quarter, down 97% from the $265 million they earned in the same quarter the year before. The company has pinned its hopes on BlackBerry 10, scheduled to launch next month: "So this is RIM at the end of 2012: losing subscribers and revenue, facing significant opponents, but with more cash on hand and at least one long-running lawsuit settled. If nothing else, it means the way is clear for RIM to launch its Hail Mary pass: BlackBerry 10."

Comments

Re:I wish them luck

[afidel]

Big business with security requirements, government entities, anyone that creates lots of emails (we have two large groups of mobile users, one primarily consumes data and they've all switched to iphone, the other group primarily uses their phones to communicate and so they've stayed on Blackberry, we told both groups we don't care which way you decide to go, we'll support either) and anyone still on Lotus Notes or who have developed large numbers of inhouse apps for Blackberry (many companies have dispatch apps that are gateways to their greenscreens where the cost to develop a new application far outweighs any potential benefit of going to another platform).

Re:Smart

[narcc]

Scrambling would mean they'd have released BB10 phones early this year instead of early next year (as was suspected). However, while it clearly hurt them in the short term, they took their time with the move from the old BBOS to the new shiny QNX / BB10 OS. This is a good thing.

I honestly don't think that they were "resting on their laurals" -- they've always produced new and interesting form-factors, some successful (Pearl) and some not (Style) even when they were the clear market leader. They didn't just keep pushing out the same iconic phone with incremental updates year over year. It was their bread and butter, no doubt, but even that didn't stay static. Compare, for example, the 7290, 8800, and 9900 to see how much risk they took with that iconic form-factor over the years.

They weren't ready for the shift in the market post-iPhone and they made some stupid mistakes. Rather than continue to stumble around, they took some time made some great acquisitions (Torch Mobile, QNX, The Astonishing Tribe, etc.) and built a great new platform, focused on the future. From what we've seen so far, the results are fantastic; well worth the wait, even if the long transition period was painful. (They haven't released a new flagship model in more than a year now -- I'm astonished that they've only shown two quarterly losses (the most recent less than the previous) and that they've continued to increase their cash reserves. This is also the first quarter that they didn't gain users. Things could have been a lot worse for them had they not focused so heavily on emerging markets over the past two years.)

It'll be interesting to see what happens to Apple if they continue the annual incremental upgrade route that is oft cited as the cause of RIM's difficulties over the past few years. Will they be forced to make a similar transition to stay relevant?

Re:I wish them luck

[ArhcAngel]

RIM designed their platform end to end with security in mind. Every phone they make has security baked in at the hardware level. Then they provide enterprise/government customers with their own BlackBerry Enterprise Server (BES) which when properly configured encrypts all traffic going over the network. The security is so good the Indian government almost banned BlackBerries entirely because they were unable to eavesdrop on them. But even if RIM gave them full access to their network it wouldn't help them since the encryption keys are held by the BES admin of the enterprise or government that runs them.

Re:Hail Mary

[ArhcAngel]

Just because you haven't seen what they're up to doesn't mean they aren't innovating.