Blackberry’s are dead – make no mistake. There is one reason and one reason only why RIM even still has a business and that is the infrastructure investment by large corporations in RIM’s secure email system. Nevertheless, even that is rapidly falling out of favor because of low-cost implementations from Good Technology and Microsoft. RIM will continue to sell Blackberry’s for a foreseeable time but it won’t stop the inevitable demise of the business.
What went wrong?
The iPhone happened and with the iPhone, Android happened and now Windows 7. They say hindsight is 20/20 but the reality is that Blackberry’s ruled the enterprise messaging market and RIM completely lost interest in building out that value chain. It never had a long-term plan in how to spread its infrastructure and services in the corporate space, or at least that's how it would seem. Instead, because it became a consumer device manufactured, it focused on the consumer space – this was initially ok without anyone competing in the messaging arena (T-Mobile’s Danger was an exception and the occasional Symbian smartphone). When Apple finally came around, that strategy was never properly adapted.
Some things RIM could’ve done to avert the disaster after it realized that the iPhone & Android handsets are a threat:
Re-focus on the enterprise segment by extending the secure messaging value chain and vertically integrate more components, for example, its own messaging suite. The reliance on Outlook has not helped RIM to innovate – the Blackberry’s are limited in functionality to whatever Outlook does. There would have been an opportunity to either provide its own messaging system, for example by branching the excellent open source app evolution for companies who are thinking of switching or in need of upgrading or by providing a plug-in for Outlook. In either scenario, RIM would have been able to exert more control over its destiny and provide more functionality. For example, it could have produced a much smarter calendaring workflow (have you tried to setup a meeting on a Blackberry lately?) and a much better email experience between the desktop client and the Blackberry. As an example: Filtering and tagging should be something that works on the Blackberry the same way as it does on the desktop, but Outlook's filters never make it to the Blackberry.
RIM has only one last chance to define a clear strategy and then execute it. First it has to determine what it wants to be: a device company, an enterprise software company or both. The reality is that most of its revenue today is generated by the device business (more than 2/3) and there are tie-ins when a business buys the Blackberrys secure mail gateway service then they will have to buy Blackberrys. In other words, to sell more enterprise Blackberrys, the company has to land more enterprise contracts. However, most of the 'observed' focus on RIM had been in the consumer space as of late.
Here’s my advice (not that it matters – but anyway): re-focus on the enterprise.
- Continue to make Blackberry's but don't try to compete against Apple, instead focus on lower-cost devices (possibly even without a voice component), essentially abandon the consumer market. With this focus, target niche opportunities that require very secure and rugged messaging solutions (Construction, Police, Army, Navy, Government etc. etc.)
- Buy Good Technology (with the help of private equity or other investors) and focus on building smart messaging solutions that are multi-platform, multi-tier for everyone else. These solutions tie into the existing RIM secure messaging platform but can run on different devices to satisfy the needs of companies or customers that only want a single device (the business folks)