OPINION: Is the Game Up for RIM?
4/10/2012 by: Simon Drew
Editor's Note: Starting today, we're introducing opinionated articles from Simon Drew, an executive from Suppose Limited, a mobile company out of UK. Simon will be posting opinionated views and analysis about the mobile industry.
What went wrong?
The popularity of BlackBerry-branded handsets has been waning for a number of years now, and with RIM's top two executives stepping down recently after poor sales, it's left us wondering just how long the company can go on for. BlackBerry handsets were initially marketed almost solely for business and corporate use, but the popularity of the BlackBerry Messenger app spread – particularly among younger audiences – and the brand became a viable competitor in the consumer market. So what's happened since then?
Well, smartphones. The rise of the iPhone and Android handsets have made BlackBerry's swankiness pale in comparison; when it comes to consumers, it's not just communication and e-mail that's important – it's Angry Birds. It's taking photos of your friends on the toilet and uploading them to Facebook. It's apps that make various silly noises at the press of a button. OK, OK – it's not all stupid stuff, but the point is that BlackBerry have been way behind Android and Apple in terms of apps for app-solutely ages now, and it doesn't look like there's going to be any catching up. For one, RIM should have jumped on the touchscreen bandwagon a long time ago, since the vast majority of apps aren't even usable with a fiddly little joystick pad.
Battle Stations: 25% Quarter-on-Quarter Shipment drop
This is at least partially responsible for BlackBerry's huge losses in recent months. RIM reported a fiscal loss in the fourth quarter of 2011 of $125 million, or 24 cents on every share. On top of this, BlackBerry shipments fell nearly 25% in the fourth quarter. Whether it's because of design, usability or technology, something is turning customers away from BlackBerry and towards the other major phone manufacturers. The question is the RIM a victim to a new market share theory, called The Cliff Theory by our reputable mobile analyst Tomi Ahonen.
So, what next? In the last few days and weeks, there have been rumors that RIM are stepping down from the consumer market in order to focus on their enterprise and business customers once again. Supposedly, the company's chief executive made comments implying that Research in Motion would be pulling out of the consumer market; these rumors have been quashed by heads at the company, though it certainly appears that RIM will be refocusing their efforts on the enterprise market.
Thorsten Heins, the company CEO, has re-clarified RIM's position by stating:
"We plan to refocus on the enterprise business and capitalize on our leading position in the segment... we believe that BlackBerry cannot succeed if we try to be everybody's darling and all things to all people. Therefore, we plan to build on our strength."
In all honesty, despite recent losses in the business sector as well as the consumer market, this probably is the best thing RIM can do for BlackBerry right now: to go back to what they're good at, and what they know people like.
Trying to bite off more than they can chew - to get a bigger share of the market than is realistic - is not a good marketing strategy. BlackBerry handsets no longer compete with Android or Apple in terms of performance or technology; so why don't they stick to what they're good at? It may be their only option.
Simon Drew, Suppose Limited, Best Mobile Contracts, BlackBerry, Research In Motion, RIM, iPhone, Android, iOS, smartphone, dumbphone, featurephone, cameraphone, Angry Birds, Thorsten Heins, Apple, Google, AAPL, GOOG
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