Can RIM Right the Ship?
It is puzzling to see how companies who have essentially created the smartphone business can stumble so badly as the business matures.
I had been a long time BlackBerry user, but I switched to an iPhone (and a Mac) about a year ago--as the saying goes, I'm not looking back. From the spate of bad news that's hammering RIM, the Waterloo, ON based manufacturer of the iconic BlackBerry device, it appears I am not alone in moving my mobile experience to a new (and for my money) "better" place. It is puzzling to see how companies who have essentially created the smartphone business can stumble so badly as the business matures.
My colleague at UCStrategies Michael Finneran likes to say that the Handspring Treo gave birth to the smartphone business, but RIM raised the child. It was the Handspring founders (who also founded Palm Computing) that hatched the idea of combining a cell phone with a pocket organizer. At the time RIM was making two-way pagers, but shifted their focus (with the addition of enterprise-grade security and push email), and soon dominated the market.
However, like many companies before them, RIM has apparently failed in making the transition to the next phase of their industry. RIM had created and refined the ideal email/text device and service, but Apple came along and showed what else a smartphone could do. I had almost no applications on my BlackBerry, but I quickly got dozens for my iPhone. Some are silly, but a lot of them I’m using on a daily basis. The whole experience was liberating, and my only regret is that I didn't make the change sooner.
It's users like me that have become RIM's big problem. I was amazed when I learned that consumers account for about 75% of RIM’s sales--then I knew they were in trouble. There is simply no comparing the user experience you get from the iPhone with what you have on the BlackBerry. The iPhone is exciting to use right out of the box, and when you master a couple of simple screen functions (that my son showed me), you're running full speed. I'm still trying to figure out those BlackBerry keyboard shortcuts.
As the smartphone market has transitioned from a business to a consumer focus, apps have come to define the experience. RIM claims to have 35,000 available in its online store; that's up from 25,000 in March. In the meantime, there are more than 200,000 apps in the Android Market and more than 425,000 in Apple's App Store.
We've all watched in amazement as RIM's financial problems multiply, and their market cap is down 80% from its peak in June 2008. However, a lead story in Bloomberg Businessweek this morning may be the worst news of all. App developers like Seesmic Inc., Mobile Roadie LLC, and Purple Forge Corp. are abandoning the BlackBerry platform. The basic reason is that it's too difficult a development environment and the payoff just isn't there.
The article quotes Purple Forge CEO Brian Hurley, who said "As soon as RIM brought in a touchscreen and mixed it with a thumbwheel, a keyboard and shortcut keys, it made it really difficult and expensive to develop across devices,...What Apple scored big on is having a touch screen and a button and that’s it." He goes on to say, "When we put an application in the field, there was a 20-to-1 difference between Apple and BlackBerry downloads". If you're looking at where to deploy your development resources, you can’t argue with that logic.
Of course, Apple's single device strategy and closed development environment could come back to bite them as well, and Android has already jumped in front of both them and RIM. UC developers had better keep that image in mind. With the growth of collaboration and social media in the UC space, we are seeing the same type of tilt toward a more consumer-oriented focus coming into play. It's easy to become complacent if you see the world developing only in terms of your own world-view. As RIM's difficulties have come to illustrate, change comes at you quickly and often from unexpected directions, so you had better be ready to refocus your energies (and I mean "all" of your energies) on a moment's notice when those changes happen.