This has been a very bad week for RIM. The company does not have its troubles to seek. On the back of an ever-decreasing market share and the announcement last month of a sharp reduction in profit and sales, RIM was probably hoping that the bad news ended there. They obviously havent heard the old adage that bad luck comes in threes, fours and now fives, and 2011 is fast turning into a “lost or let’s completely forget” year for the RIM senior management team of Jim Balsillie and Mike Lazaridis. Both of these individuals unsurprisingly remain upbeat – thats what you would expect from the senior execs after all – but events in 2011 paint a very different picture as to the future health of RIM.
At the turn of the year, there was confidence of a sales upturn and the positive impact that the introduction of RIMs first tablet, The PlayBook would have on RIMs fortunes. Unsold PlayBooks are piling up in RIMs warehouses, and the company has admitted that it will have to slash prices to shift them. The dilemma that RIM faces is that, unlike HP with the TouchPad, it cannot simply pull the plug on the PlayBook, as the PlayBook operating system, QNX, is being developed as the replacement of the current Operating System on its handheld devices, and is seen by RIM as the only effective way that it can close the gap on Android and iOS.
The new Bold has received good reviews, but is this going to be enough to stem the flow away from BlackBerry to other smartphone manufacturers, and buy the company time to fully develop the QNX software on its handheld devices, in order to compete with iOS and Android?
One area of definite RIM success, certainly amongst the younger generation, was BlackBerry Instant Messenger (BBM). Even this, however, went from success story to PR disaster after it was implicated and highlighted as a significant factor in the organisation of the riots in London over the summer.
And now, just to top it all, we have had the server outages at BlackBerry that stopped millions across the globe from accessing their emails, internet and the much loved BBM. Not only did RIM suffer one outage on Monday, and more significantly, having told the world it was sorted, the second outage continued through Tuesday and into Wednesday – enough to turn even the most fervent “CrackBerry” addict running towards the open arms of the other smartphone manufacturers.
It can be argued that RIM was complacent, in that their traditional market stronghold within Banking and Governmental sectors remained strong even until very recently, until the iPad took centre stage, and suddenly banking executives joined the rest of the consumer world and wanted their own tablet. With these execs now being exposed to iOS and liking it, we have seen an initially slow, but nonetheless significant, move away from BlackBerry within RIM’s traditional strongholds. With the advent of Mobility Device Management solutions, this migration will only speed up, as IT departments bow to employee pressure to introduce more appealing smartphones, offered by Apple and other manufacturers utilising Android.
If I was Mike Lazaridis or Jim Balsillie, this is the trend that would worry me most: the increasing move away from BlackBerry within RIM’s market heartland. Could 2012 see a greater BlackBerry outage, or at even a terminal one?
David Coleman is CEO of STS Digital