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RIM is standing on a burning platform

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30th March 2012

About a year ago, Nokia's then-new CEO Stephen Elop stunned the industry with his "burning platform" memo that indicated just what a dire state Nokia was in, and that in effect it was like standing on a burning oil platform where to stay where you were meant certain doom, and the only chance was to take a leap into the unknown.

One year later, RIM's new CEO, Thorsten Heins, finds himself and his company on a similar burning platform. RIM's recent years of growth have been on the back of buoyant consumer sales, but sales of the profitable high-end high-margin devices have slumped against iPhone and Android rivals. At Mobile Gazette, we spotted the signs of a long-term decline way back in 2009.

RIM have pumped huge sums of money into their largely unsuccessful Playbook tablet and they have struggled to make the BlackBerry OS as usable and as sexy as rivals. And although low-end (and low margin) products are still selling quite well, the entire consumer market has turned into a money pit for RIM.

As-yet-unconfirmed rumours indicate that RIM may be pulling back from the consumer market, allowing it to refocus on their business and corporate customers, in effect returning to their roots in the early 2000s, although sources within RIM are denying this.

RIM's BlackBerry devices are still very popular with corporate customers, and RIM's new Mobile Fusion device management product is exactly the sort of thing that those customers need to look after an increasingly diverse mobile ecosystem.

However, in many respects, BlackBerry devices are pretty unappealing to use compared to iPhones, Android handsets and even Windows Phone 7 smartphones. But if you want to access your corporate email and calendar then there's really nothing better than RIM's enterprise solutions. And to their credit, there is a decent choice of handsets available for users and businesses to choose from.

 BlackBerry 7290 So, it makes sense for RIM to refocus on business customers, as the competition is heating up here too.. especially from devices using ActiveSync to talk to corporate Microsoft Exchange systems. Corporate RIM customers don't care about "sexy", they care about something that works, but RIM still need to prove that they are better than the competition.

As for consumers, perhaps the key selling proposition they have is still BlackBerry Messenger (BBM), something that has a decent share of the youth segment. So, there's still a significant market to exploit here, and it should surely be possible to turn a profit.

It's worth bearing in mind that RIM is a company of two parts - one is the part that provides products such as push email, management and messaging. Another part  BlackBerry 9900 designs and makes smartphones. But it seems that the BlackBerry devices themselves are using a dead-end platform despite all of RIM's efforts, and perhaps this is where they need to change.

In our view, RIM should very much reduce their existing BlackBerry range and sell them as legacy devices to corporate and larger business customers. For consumers and smaller businesses, RIM should look at a software solution using another platform completely. It should surely be possible for all of RIM's services to run on an Android smartphone (for example). Those Android devices could even be branded as "BlackBerry" handsets, either designed and built in house or just bought in as an OEM product, or something in between. RIM should stop pumping vast sums of money into technologies that are not selling, and join one of the rival camps instead.

When Nokia jumped off the burning platform, they chose Windows and Microsoft as their partners, a move that has not been wholly successful. RIM can learn from Nokia and align itself with a more established platform. Alternatively, they can stay where they are and face certain extinction as the flames get ever closer.


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