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RIM’s future involves less Canada

20 Jun

What do Research In Motion and the Vancouver Canucks have in common? Both are Canadian organizations that jumped out to a huge lead, only to cough up their advantage to rivals and find humiliation. In both cases, rioting ensued.

In the case of BlackBerry maker RIM, the choking hasn’t resulted in looted stores and burning police cars (yet), but the calls for the heads of the company’s co-CEOs have now turned to howls. For Canada, that may be just the beginning of the upheaval to come.

RIM appears to have four potential paths back to relevancy – and all of them will probably make the company decidedly less Canadian. More likely, these options will become parts of the same chain, which could ultimately result in RIM being only tangentially tied to Canada.

1. New bosses. With institutional shareholders abandoning ship, it’s just a matter of time before co-CEOs Mike Lazaridis and/or Jim Balsillie are shown the door. A new leader will have to figure out exactly what’s wrong the company.

The debate over that is hot and heavy right now, with pundits suggesting everything from the engineering to the marketing of products. On Friday, Business Insider published a scathing letter from a former employee who said the CEOs are woefully out of touch with the market. Lazaridis and Balsillie have gotten too comfy with their success in the business segment and “are culturally blind to the gaping holes in their armour regarding consumer. They honestly think they understand consumer product, business, mentality, marketing – but they really don’t.” Whether or not the author is legit is besides the point because he or she sums up the general analyst consensus: RIM just doesn’t get the consumer market.

An anecdotal example of that are the company’s current TV ads for the PlayBook. One ad touts the tablet’s Flash capability while another spotlights its multitasking chops. The average Joe really doesn’t care about or even know what either of those is, so the ads don’t really give them a reason to buy it.

The new boss will have to have an understanding of how to create devices for every-day people, as well as how to sell them. If no one at RIM currently has that capability, as is clearly the case, then surely the list of people in Canada who do is short to non-existent. The smartphone game is global so if RIM is to attempt to solve its problems with new leadership, it’s going to have to look outside the country for someone with experience running a multinational, consumer-oriented company.

2. New location. A new leader will bring a welcome change in direction. I’ve written before about how RIM can’t currently compete with its better-resourced rivals Apple and Google, so while a new boss will help in the short term, it won’t fix that long-term problem. The company will have to expand operations in other parts of the world, particularly Silicon Valley, if it hopes to attract the same quantity and quality of engineers as its two main rivals. That means some of the great work that has been done so far in Waterloo, Ontario is going to be divvied up and diluted.

This will, of course, have huge implications on Canada, where RIM has been the anchor of the high-tech industry.With the company’s recent layoffs, the tremors are already starting to be felt. More RIM jobs elsewhere will mean even fewer jobs in Canada.

3. New partners. One of the more intriguing options being tossed around is the idea that RIM should adopt Android for its BlackBerry devices. Doing so would tie the company to what is clearly going to be the top smartphone operating system for the near future, as well as it give it access to the critical apps that are needed to sell devices. That’s not a bad idea, but getting in bed with Microsoft might make more sense. While Microsoft’s Windows Phone 7 hasn’t exactly set the world on fire, the Seattle software giant still has a number of things going for it. The company has a track record of convincing developers to work with it, a mammoth business customer base (many of whom use BlackBerry) and an inexhaustible pile of cash with the appetite to be a major smartphone player to go with it.

As two companies that make a lion’s share of their money from dealing with businesses, RIM and Microsoft have always had much in common – much more so than RIM has with Google. At this point, RIM and Microsoft are both on the outside looking in, with Google their common enemy. As the cliche goes, the enemy of your enemy is your friend. Uniting with Microsoft would also solidify RIM’s core business base, rather than fragment it as the Seattle company inevitably comes after it.

4. New owners. RIM supporters and patriotic Canadians alike seem oblivious to or completely opposed to the inevitable, which is that the company will eventually be bought by a much larger foreign concern. The fact is, Google and Apple are giant companies that have their fingers in all kinds of businesses – smartphones are only one small albeit important part of their fortunes. RIM has nothing else to fall back on; if its phones and tablets don’t sell, it’s done. Finland’s Nokia has traveled the same path and, as several analysts have pointed out much to the company’s chagrin, it is now all-but-owned by Microsoft.

That’s not a defeatist attitude, it’s merely reality. Canada has plenty of smart people and great entrepreneurs who have created many innovative technology companies – ATI, Cognos, BioWare, Corel, Nortel, just to name a few. In some cases, as with RIM, those companies have created their own markets, thereby attracting much bigger and better-resourced competitors. Some companies, such as Corel and Nortel, simply couldn’t compete and ended up imploding. Others, such as ATI and BioWare, decided that getting acquired and being part of a bigger whole were the better way to go. History simply does not support the idea that relatively tiny RIM can continue to independently compete against the behemoths that are Google, Apple and Microsoft.

That’s nothing to be ashamed of. Canada is a country of small- and medium-sized businesses that can do well – up to a point. Canadians should be proud that they can sell their ideas and talents to the rest of the world, the same way they’ve been doing with their musicians, comedians and even hockey players for decades. There are those who believe otherwise, but they’re probably the same people who cheered for the Canucks as “Canada’s team,” despite the Boston Bruins having just one fewer Canadian player on the roster.

And just who might buy RIM? Well, even though the company and Microsoft have similar customer bases, BlackBerry might make a better fit with Apple. Unlike Google and Microsoft, RIM and Apple both take an integrated approach to their devices by designing both the hardware and software. They could work better together since they share that philosophy. Apple also has a stated desire to make more inroads to the business market, so since Microsoft appears to have its dance card full with Nokia, the iPhone maker may be the best partner available.

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13 Comments

Posted by on June 20, 2011 in apple, Google, microsoft, mobile, RIM

 

13 responses to “RIM’s future involves less Canada

  1. Randy

    June 20, 2011 at 1:44 am

    Consumers don’t understand multi-tasking or Flash??Just because some dark wood desk editor at a business magazine doesn’t get it does not mean the rest of the world doesn’t.

    why else would the new IPhone commercials in the US specifically tout the multi tasking abilities, while Samsung/Verizons new commercial specifically point out the it does Flash?

     
    • akismet-e9216f5a90a2ffed10aaf546d34b0514

      June 20, 2011 at 10:19 am

      For flash or multitasking, the method of presentation is also important. in case of RIM, just naming those terms means nothing, might as well add a few more terms that most people don’t know what it means.

      But aside from that, the first interaction always counts the most, I own a few apple products (and an android) and went a few days after the release of the playbook to try it out. After being unable to go back to the home screen (and the sales rep failed as well) I put the device down after a minute of usage.

      If my attention span was 1 minute considering a previous interest in the playbook, imagine the attention span of an average person looking at the device, I can assure you he will put it back on the stand within a few seconds.

      The article is 100 % correct.. and I wonder if Randy is currently employed by RIM

       
      • Randy

        June 24, 2011 at 2:22 pm

        Do you often balance your lack of a viable argument by adding attempts to discredit those you disagree with?

        First, I don’t work for RIM, never have, and never will.

        Second, Implementation of a UI was NOT an issue above. The article stated that RIM should NOT be using multitasking and Flash as catch words in media ads because the “Average Joe” does not understand them. The truth is however that the average joe is also not the intended client base. The client base is more likely a tech savy business or administrative person who either knows what that means, OR has asked the appropriate tech savy persons in their organization what they should look for. Apple, Motorola, Samsung, and others are running ads on TV in the US constantly preaching those two terms specifically.

        This is not a UI issue, it’s a question of their marketing concept, and the fact that you could not figure the UI out on your own could mean that it has issues… Or it could mean that you do.

         
  2. Alexander Trauzzi

    June 20, 2011 at 9:52 am

    The problem with RIM is that they didn’t realize their products were flawed in the longer term since day one. When they started to get praise as one of our economic drivers, it institutionalized their hubris. It became another one of those things that Canadians got really good at talking lots about, but not realizing was just a flash in the pan.

    We like to do that here in Canada. We can make a flash in the pan last for almost a decade, we’re lazy, uncoordinated and marketing driven.

    Inevitably, we have to assess just what their product is as that’s what they exist to make.
    When it comes to BlackBerries my experience with every one I’ve owned (through work!) or used has been dismal. From a poor interface and a lack of responsiveness, to a very isolated applications experience. These phones crash often and are forever temperamental, hanging during the simplest of operations or rebooting randomly. Let’s also not forget the unforgivably dismal web browser.
    Looking at the PlayBook, things don’t look much better. I tried the demo unit and can safely say there’s no way a seasoned geek like myself could sort out it’s arcane user interface.

    RIM’s only way out is to drop QNX (give that one to the community), finish nailing Palm’s coffin shut and start releasing phones based on Android.

    If they really think they can go toe to toe with Apple and Google best of luck to them. But this is one Canadian company I have always thought undeserving of all the praise they’ve received.

     
    • Simon Cohen

      June 20, 2011 at 10:05 am

      You should try it again Alexander. Every person who has borrowed my PlayBook loaner unit, takes to it instantly once I’ve explained how the touch-sensitive borders work (which takes all of 10 seconds). It’s a much better product than people give it credit for.

       
      • petenowak2000

        June 20, 2011 at 10:16 am

        I too like the PlayBook: http://goo.gl/rMgSu. If it had been released fully baked RIM probably would have had a winner on its hands. As it stands, it’s tarred by the too-soon launch.

         
      • Alexander Trauzzi

        June 20, 2011 at 5:39 pm

        I have no real reason to try the blackberry playbook again. I tried a release model at a Staples and was very disappointed by it. Again, what might seem like pure genius when it comes to interface is really just arcane.

        I’ll give them credit for making a device that actually has enough horsepower to do the job intended. But given my experiences with their interfaces, software and overall future, I’m happy to stick with my iPad 2.

        Not that I’m a very big Apple fan either. But Android still needs to sort out it’s support issues.

        Maybe in 2012 we’ll see some manufacturers actually intent on competing?

         
  3. Simon Cohen

    June 20, 2011 at 10:02 am

    I agree that Microsoft seems the likeliest suitor, but not because RIM needs the engineering talent. They need M$ft’s deep pockets. But as you say, they need help with the consumer market, and I doubt MSFT can give them that – their Xbox team is the only group that really gets consumers. But I also agree with Randy – consumers DO understand what flash is. Everyone who owns an iPad wishes it could handle Flash, and they will tell their friends who don’t own iPads the same thing: “It’s great, except when you go to a site with Flash”. So talking up Flash is smart. Not going to win them the war, but still, one of the best differentiators they have right now.

     
  4. hfiguiere

    June 20, 2011 at 10:49 am

    Options 3 make the wrong assumption that software is a commodity. That would be a definite nail on RIM coffin to do a Windows or Android product.

    Software is not a commodity. Software is the very important part of your device. It is the hardware components that are the commodity.

     
    • russellmcormond

      June 20, 2011 at 12:46 pm

      The part that RIM did well was hardware and business specific applications. The operating system wasn’t that important, so is the part that could swap out without really changing who they are.

      If I were RIM I would as a first step port the entire business suite of applications to Android and make these commercially available for all devices. Then leverage the RIM hardware in both the consumer and business markets with different lines that are bundles or unbundled. Some people really like the pre-packaged bundling of having all the apps they will want to use come with the phone, and never want to touch an app store.

      Microsoft has a hardware dance partner with Nokia, but I don’t think either matters. I don’t think there is room for another Beta in the mobile Beta-vs-VHS OS wars. Microsoft will suffer the same fate as RIM if they tie themselves to a vendor-dependent OS and try to compete against Apple in the closed/integrated marketplace. Why fight for a tiny piece of the smallest part of the industry, rather than leveraging the larger/open part of the industry?

       
  5. Marc Venot

    June 20, 2011 at 1:03 pm

    I wish a comparison with the Nortel fate.

     
  6. Craig Bamford

    June 23, 2011 at 4:19 pm

    I think Peter really doesn’t quite get just how negative his attitude towards Canada is. That section about how “we’re fine for medium-sized businesses but little else” really comes across as exactly the sort of Canadian self-hatred and defeatism that has plagued us throughout our history.

    Why CAN’T we have global players, exactly? Is Peter as comfortable with being a “hewer of wood and drawer of water” as he appears to be in this piece?

     
  7. Craig Bamford

    June 23, 2011 at 4:23 pm

    By the by, it is somewhat amusing reading about how RIM would be best off bought by a larger competitor. The same thing was said about Apple a decade ago. And Nintendo, for that matter.

     
 
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