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.
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