8 ways to fix RIM with a reality check

Summary:It's almost becoming a daily ritual to see bad news spelling out Research In Motion's doom, whether it be disappointing earnings reports, layoffs, executive departures or just poor BlackBerry product sales in general. Jefferies, a global securities and investment banking group, has eight suggestions that could turn RIM around, but let's give each one a reality check first.

analysis It's almost becoming a daily ritual to see bad news spelling out Research In Motion's doom, whether it be disappointing earnings reports, layoffs, executive departures or just poor BlackBerry product sales in general. Jefferies, a global securities and investment banking group, has eight suggestions that could turn RIM around, but let's give each one a reality check first.

1. Jefferies says: "Fully support iOS and Android in the enterprise by adding BBM and BlackBerry email to those devices. This maintains subscription and BES revenue. This is important as according to our analysis RIM's hardware sales now have negative operating margins."

Reality check: this could work, but really only for a limited base of consumers who might own BlackBerry devices for work and iOS/Android devices for personal use (or even vice versa, although that would be an even smaller pool of customers). It would be better if RIM focused on improving its own mobile operating system to bring it up to par (at least in terms of popularity) with iOS and Android.

2. Jefferies says: "Move software development out of Waterloo and create three new teams with at least one in Silicon Valley. One team to focus solely on the development of the QNX OS, one team working on UI and user experience, and one team devoted to enterprise/cloud applications and services. Third-party apps should be spun off as a separate company or isolated so they can develop for other platforms."

Reality check: RIM definitely needs to branch out, and a Silicon Valley office is a must. RIM is probably finding itself more and more alone these days — to the point where it is reportedly bullying mobile carriers to accept its upcoming mobile devices even if they don't meet quality standards. Thus, RIM could probably use some new partners (even Nokia made friends with Microsoft), and being in Silicon Valley on the ground would certainly help.

3. Jefferies says: "Refresh the management team to raise accountability and increase the benchmark for performance. Current management appears content in bringing to market just one tablet (PlayBook) and one major new handset (Torch) in the past year. Nokia's board's decision to change its management is encouraging and we would like to see RIM follow suit. We believe shareholders would react positively even at just the appearance of change."

Reality check: although both of RIM's co-CEOs, Mike Lazaridis and Jim Balsillie, asserted that they need to remain in power at RIM to weather the storm and the company's "transition" period. While it is a good idea to have experienced veterans around, it's obvious that RIM's current leadership structure isn't working as the company continues to spiral downwards. Jefferies is also right in arguing that RIM needs to be far more aggressive with its releases. Sure, Apple can afford to release one new iPad and one new iPhone model per year, but RIM doesn't have that kind of mass-market consumer popularity anymore.

4. Jefferies says: "Hardware-wise, RIM should focus all efforts on getting six QNX handsets out next year. Three QWERTY handsets and three touch handsets all with LTE capability."

Reality check: LTE is becoming a must, and it will be the standard within a year. Android smartphones are already leading the way, and it is very likely that Apple will introduce a 4G-ready iPhone this year. (It would be shocking if Apple chose to be left behind here.) Thus, RIM cannot let itself fall behind any further as well.

5. Jefferies says: "Learn everything about the developers and then create the best possible development environment."

Reality check: this would certainly foster innovation, but things are already going to be dim around RIM's offices once it commences layoffs soon. RIM will need to work on some strategy of building a happy workplace to keep its employees motivated. Otherwise, they'll all just give up on RIM like many other tech followers have already.

6. Jefferies says: "Pick a major content ecosystem and strike a deal. If possible, partner with Amazon and make them the content player, retail store etc. Execution speed is critical in order to quickly optimise a seamless solution."

Reality check: this goes back to the Silicon Valley move a bit, but this could get things rolling faster with RIM. There could be several ways for RIM to work out a deal, such as just offering an optimised portal to a particular outlet, or developing a smartphone or tablet for another major brand. For example, Samsung is rumoured to be developing Amazon's tablet that is expected to be released some time this year. Additionally, Samsung built the Nexus S for Google after HTC did the same with the Nexus One. Although the latter of those two devices is arguably more popular, it still shows that two companies can work together on a successful product and share some of the credit.

7. Jefferies says: "Create a team whose only job is to focus on the consumer. The team should analyse consumers' wants, needs, trends and feedback in excruciating detail. RIM should only release products that are desired, intuitive and ready for the market."

Reality check: RIM should stick to what it is best at, which is producing highly secure mobile devices for business and enterprise clients. Most of its forays into the consumer sector, namely the BlackBerry Storm and PlayBook, have largely been disappointments.

8. Jefferies says: "Foster innovation by creating a team whose sole job is to find the next tectonic shift in technology and bring it to market. We believe RIM can leap frog the competition, and it is still not too late, but time is running out."

Reality check: it might not be too late for RIM to save itself, but it's hard to imagine it surpassing any of the other major mobile players in the immediate future. Innovation is certainly always a key to finding success again, but it would be better for RIM to hone in at what it is good at and innovate from there rather than starting from scratch.

Via ZDNet US

Topics: BlackBerry, Mobility

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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