Research In Motion is dead, for now

Posted by Ray Nicolini

Via BGR.com

I saw from the inside and outside how RIM transformed the mobile landscape, and how the company even battled its own inner demons throughout the years. Here are my thoughts on the company’s worst quarter in five years:

RIM grew incredibly fast. It grew faster than the company knew how to manage, and RIM slowly — and then quickly — slipped as a result. This is the company that used to make users choose between a device with Wi-Fi and no GPS, or GPS and no Wi-Fi, just to have two products on the market instead of one. This is the company that refused to take the consumer market seriously for a number of years. This is the company that couldn’t see the future when it was right in front of them.

One of my high-level Research In Motion sources who I’ve known for a number of years wrote an open letter to the company a few months ago that I published on BGR. Looking back at it now, here are some of the most intriguing and timely quotes:

• Let’s obsess about what is best for the end user. We often make product decisions based on strategic alignment, partner requests or even legal advice — the end user doesn’t care.
• We need some heavy hitters at RIM when it comes to software management. Teams still aren’t talking together properly, no one is making or can make critical decisions, all the while everyone is working crazy hours and still far behind.
• The public’s questions about dual-CEOs are warranted. The partnership is not broken, but on the ground level, it is not efficient. Maybe we need our Eric Schmidt reign period.
• Just because someone may have been a loyal RIM employee for 7 years, it doesn’t mean they are the best Manager / Director / VP for that role. It’s time to change the culture to deliver or move on and get out.
• Strategy is often in the things you decide not to do.

What’s so interesting is that RIM has actually started to implement most of what the open letter said the company should do. The company isn’t releasing BlackBerry 10 until it’s happy with it, the end user has been more of a focus, the company has gotten rid of a number of executives, and the dual-CEO structure is gone. Unfortunately, it’s not enough. RIM has a fundamental problem with what the company can offer, and what the company can do best.

RIM CEO Thorsten Heins even stated yesterday during the company’s earnings call that RIM’s best-in-class enterprise integration, security and push email are no longer a huge selling point for the company. Really? It took five years to figure that out?

The enterprise loves the BlackBerry Bold 9900′s keyboard, but most BlackBerry customers want a full-touch smartphone and RIM’s all-touch smartphones are poor excuses for a phone. In fact, an iPhone 3GS or prepaid Android smartphone is a much better option for the majority of people in the market for a low or mid-range smartphone compared to a BlackBerry Torch. RIM’s average selling prices have taken a nosedive since the company’s products can’t compete on features, only price, though competitors like Huawei and others have seized this opportunity to introduce lower-priced Android smartphones.

Something I have been told from another senior source at Research In Motion is that the company is considering ditching their system access fees for all carriers. This amounts to more than $1 billion in revenue each quarter for RIM, but the company thinks it might be a way to drive BlackBerry 7 sales before BlackBerry 10 finally hits the market. It would be a radical move that could help the company sell more units in the short term, but would get them nowhere in the long term. In fact, all it would really do is buy the company time to try and get BlackBerry 10 out of the door, or buy time while it explores other options for the company’s future.

I spoke with the same inside source who wrote the open letter to RIM we published last summer, and here is what this person had to say: “RIM only has one hope. Ditch the QNX bullshit experiment that will be the exact definition of a 1.0 operating system — it can not compete.” The source went on to say, “Take on Windows Phone and negotiate with Microsoft. You need BBM on Windows Phone, get a royalty fee from all the others. Then build out the BES story with Exchange — beef that up, now there’s an interesting and unique value proposition.”

BGR exclusively reported in January that Research In Motion was pushing for a sale of a part (or entire) company to Samsung. Those talks were real. RIM has talked with a bunch of companies about licensing its software and OS, licensing BlackBerry Messenger, licensing the company’s network infrastructure, and even selling different parts of RIM flat out.

The RIM we know, is dead. The company has 12 to 15 months until it’s either acquired, or broken into pieces and sold for parts. I’m not even sure why the company still plans to launch BlackBerry 10 smartphones at this point.