RIMM had a great quarter – a time after which companies usually forget to do the right things. On the contrary this is really the best time for RIMM to react now before it is too late. So here goes my thinking on what they should do and soon…
It is very clear that RIMM’s unique advantage of Blackberry push email is not sufficient for it to retain the market leadership. First Apple’s iPhone, then PALM Pre and now Verizon’s Droid are eating at its market share slowly and RIMM has to respond to stay relevant. One thing is clear that current OS of Blackberry has reached its limit and that is one area RIMM has to find an alternative while retaining its unique advantages. It needs developer community and a great web experience to compete – getting to new customer segments will be a nice bonus.
It has four possible choices
- Build a new OS
- Buy PALM
- Google surrender strategy
- Google enhancement strategy
Build a new OS
Building a new OS will not bring developers easily to Blackberry and so that choice seems impractical. Yes I know Samsung went against the common wisdom and introduced Bada its new OS but got a big yawn from the market so far.
Buy Palm Inc.
Buy PALM which is currently at a market cap of $1.65B and would probably cost close to $2B. What would RIMM gain is WebOS, a great Web experience but not necessarily developers. Yes it will get access to a younger market segment that PALM manage to penetrate but RIMM could put the $2B elsewhere for a better return.
Adopt Google’s Android
RIMM can finally eat its pride and make the right business decision by adopting Google’s Android. There are two ways to adopt this strategy
- Follow Motorola’s Lead or Google surrender strategy wherein the handset vendor just builds the hardware and adopt Android as is – kind of like what Motorola did with Droid for Verizon Wireless ( In all fairness, Motorola did some work on its Cliq for T-Mobile)
- Follow Apple’s Lead or Google enhancement strategy wherein the handset vendor not only builds hardware but adds its unique values and controls the end to end user experience. This is similar to what Apple did with BSD UNIX and created Mac OS X.
Conclusion
RIMM should adopt Google Android and add its unique push email, sync, security and other goodies while continuing to control end to end user experience. This will give RIMM a better OS, developers and continue to maintain its unique advantages.
What do you think RIMM should do? Share your opinions here.
R. Paul Singh
Neither should buy Palm, everyone but Apple should embrace Android, and even Microsoft should adopt Android. Google opened it up a great deal, Microsoft or Yahoo can walk right in and replace the search, mail etc. client, and they should try.
For RIM, I think they should focus on reproducing their mail client as an Android application.
Palm should similarly try to get WebOs running on top of Android.
Nokia is harder, as they may want to do some interesting things under Android, with increased native development support. Heck if they can get Android running on top of Symbian on some super phone I’d buy 2, at virtually any cost.
Thanks for your comments. My only concern is will it create too many splintered versions of Android just like what happened with Linux for a long time.
Similar to Mac fan following there are certainly people out there who boast for RIM. In my opinion in its current avatar RIM is a vanilla enterprise phone serving the needs of enterprise world.
In order to gain market share you need to constantly innovate. It can launch a new series of android phones which should cater to a larger audience. This would reduce its R&D cost in terms of developing a new OS.
Thanks for your comments.
My contention is that their vanilla enterprise phone business is in danger and if they don’t protect it, they may have bigger issues.
I had all but written Palm off until the Ajaxian guys came on board to run their developer program, now I think they have a shot, although with >100k iTunes Apps, it might take them a while to catch up.
I don’t think the Blackberry is all about the enterprise anymore: you can get a basic model for next to nothing with a 2 yr contract with most carriers now. The problem is a lack of apps and RIM isn’t the most developer-friendly place. So I think out of your 4 options, buying Palm would be their best bet.
David Strom
David, thanks for your comments. Buying PALM is an option that would financially look more appealing but it would take them the same amount of time integrating WebOS as it would take to adopt Android but cost may be few $M rather than $2B and integration issues. With PALM, RIMM won’t be getting lot more new customers and so I believe the price point won’t be justifiable.
Another alternative Blackberry has is to focus entirely on delivery of enterprise applications to blackberry. Then they neither have to adopt android nor do they need to buy palm. The enterprise applications like CRM, ERP, Healthcare, Pharma etc have a long way to go in terms of usability on smart phones. If RIM can improve that on blackberry, they will retain a big chunk of revenue share (not device share but revenue share) for mobile.
Thanks for your comments. I agree with the need for enterprise apps on mobile but am not convinced that RIMM is the best player to get that. I think that is a role which will be done better by some startups.
Yes, startups will try to fill that role and then RIMM or Microsoft will pick them up.
I agree that Android is the platform. Rather than thinking platforms, however, RIMM should focus on applications, and I don’t mean all the single-task apps that dominate on the iPhone. They are cute, but how often do you use each one? I mean the apps that everyone uses every day. A word processor, whether Microsoft or another. Ditto for a spreadsheet. A browser. And an email program and a calendar. If data from those can be exchanged easily with a RIMM device, then it will be a winner. It has to be easy to link to the computers people use every day. And most of those are Windows computers. All of that means it has to be a mobile computer itself. Operating system doesn’t matter if data can be exchanged easily (of course, the OS is a big factor in that).
On top of that, it has to be able to do mobile applications linked to an on-board GPS, such as locating services.
In addition, it has to have enough horsepower to run a VoIP application and support two-way mobile video.
Last, it has to have multiple radios because we are in the midst of a transition from 3G to 4G.
If RIMM can do all that, they’ll have a winner.
Thanks for your comments. Interesting thoughts. I agree that of the 150K or so apps on app store, an average person can’t consume more than a dozen and so more apps doesn’t mean better but better apps is as important. Whether office access is utmost dream on my phone – perhaps that role will be left better to laptops for a while. However, if we agree with your vision it would indirectly imply that MS should buy RIMM as they both need each other.
One of the major issues with RIMM is just the lack of fundamental features to supply to the developers. You can see the the ideas started, but there are no rich code features to extend, and just when you find the library that “has it” java, it isn’t supported in RIMM library, even minimally. I agree RIMM should go the route of Android perhaps with highly customized Blackberry controls like Apple did for iPhone. I think if they had concentrated a bit more software usability and design and extensibility (for the developers), they would not be handing their marketshare over to Android like they are now. They are taking a serious beating and I don’t understand why they didn’t adjust earlier.
They are getting better but do have a long way to go.
Thanks for your comments. I don’t see RIM changing as fast as I would have liked to see from a market leader or may be it makes you complacent.
Agreed. Thanks for your comments
RIMM doesn’t need anything. They are growing faster than expected. During the last Q they have added more than 4million new blackberry users. 2010 is also looking great, the company is getting ready for new webkit phones. The app world is aproving more than expected for example more than 1 million score mobil app was downloaded on blackberry,that is amazing.I know the app wold is not as large as iphone but at the end of the day if u make money on iphone you will change the app to fit the blackberry phone at low cost less than 5K.also the profit sharing for an app with rimm is 80 to 20% Vs 70-30% with apple. In the long run both will have an even number of apps. How the thing u have to look at in the long run is who has better phone for managing larg amount of data. At this time no company has better OS than RIMM in managing data. I think buying palm will not any value for Rimm. As for andrioid, I have yet to see anyone use android phone, I am not sure how successful it will be given that it is not better than than the iphone or blackberry. The google phone sold 20,000 units on 1st week Vs over 1mil for iphone 3GS. therefore Android has a lot of work to do before it can attract RIM to change its OS. However I agree with u that it needs to inprove faster on some area to compete with iphone.
Thanks for your comment. I am sorry I disagree with you on many fronts. I am a fan of Blackberry and RIM as a company. I also think the time for making major changes is when companies are doing well and not when they are not. Webkit is a good move for RIM but with the fragmentation of the platform somewhat and an OS that was not really designed for third party applications its limitations are showing up. RIM has advantages as a business phone but now the industry is being driven from consumer end as can be seen from the success of Apple’s iPhone. Regarding Google, I was not referring to Google’s phone but more on the Android OS which is a better development environment than that of RIM or Apple. RIM can adopt Android but add its unique push features and hardware design.
rimm is run by techie founders and they are slow in adopting/accepting competitor’s offering.