How RIM found itself on the wrong side of history

Summary:The BlackBerry maker has little hope of a turnaround now — its revenue is dropping and people aren't buying its devices. So what pushed the smartphone once-leader into a corner?

Research In Motion's revenues are down by one-third over last year. People are simply not buying its devices.

Even those who remain committed to its platform will have been holding off making any new purchases while they await BlackBerry 10 — but now that OS won't come until next year. The Canadian company lost more than half-a-billion dollars in the last quarter alone. Its stock price dropped 70 percent in the last year.

In other words, RIM is losing money and it has no way of fixing that, not even by sacking thousands more people. It's not broke, but its current trajectory can only end up taking it to that level. There are options — full sale, partial sale, asset-stripping — but there's not really anything of serious value to a buyer other than the network and maybe the intellectual property. Whatever happens, RIM as we know it is gone.

It feels cruel to do, especially to a company that has made many genuine innovations over the years and still employs almost 12,000 people: but it really is now time for the post-mortem.

Let's remember where the BlackBerry was before Apple's iPhone came along: near-essential as a corporate tool, sturdy as a network and unassailable as a secure smartphone. What went wrong? Everything. These below are the trends that have all but killed RIM.

Touch

It almost goes without saying that Apple's smartphone was the poisoned arrow in RIM's leg. One of the main reasons people liked BlackBerrys was the excellent physical keyboard — it even helped make the handsets a hit among consumers as well as enterprises. Who knew they would turn their back on the concept in droves? But they did, and down went Windows Mobile, Nokia/Symbian and eventually the BlackBerry.

Whereas all those other platforms struggled to adapt to a touch-first world, the iPhone was there from the start. I remember when RIM brought out its first touchscreen phone, the Storm, in 2008. To its credit, the company tried to do something different, by making it a clickable touchscreen that gave tactile feedback that (they must have hoped) would remind the faithful of a physical keyboard.

But it didn't work very well — to make it clickable they introduced a slightly convex screen and, on the unit I was shown, I recall being able to see the innards of the phone through a small gap that existed between the frame and the screen. Not great for dust and moisture. They dropped that idea in the second Storm.

As it turned out, most people were fine with having little to no feedback from their typing, and in the end there was nothing RIM to do to differentiate itself there.

BYOD

When the iPhone launched, it was a pure consumer play. That ceased to be the case long ago. Now both the iPhone and Android are perceived as very secure indeed, and therefore suitable for high-level corporate and governmental use.

That means there is no longer any meaningful distinction (for all but the most security-conscious organisations) between the user's 'home' and 'work' devices. The bring-your-own-device trend — or, as it used to be called, 'consumerisation' — is user-led, but for the most part unstoppable. Why? Because people don't like having to carry around multiple devices that, to their minds, do the same thing.

In the cases of RIM and Nokia, the companies tried to fight back with work-life 'balance' functionality for their handsets. That's a feature that IT departments may love, but it doesn't stop people from bringing in their own devices, which were neither BlackBerry nor Symbian. Again, not enough to turn the tide.

Ecosystems

Yes, the iPhone again. RIM has of course had a developer ecosystem for a long time, but it stayed very enterprise-focused even after most of the BlackBerrys RIM was selling were to consumers. Apple, then Android, encouraged a developer free-for-all. There were winners and there were losers, but the end result was the evolution of services that often have both enterprise and consumer appeal.

The start-ups that come up with these line-blurring services usually have limited resources. Most simply can't address every OS — they struggle to keep up with two main platforms, especially with all the fragmentation that comes with Android. RIM has really enthusiastic developer outreach; but was anyone in that ecosystem not addressing iOS, then Android, then BlackBerry? Or even worse: then Windows Phone and then BlackBerry?

The only RIM-only software that could really impress the enterprise and consumer was BlackBerry Messenger (BBM), due to its security and ease of use. But authorities such as those in India have put pressure on RIM to breach its own walls in the name of national security, and iOS and Android now have several alternatives that are just as easy to use. Again, almost no differentiation remains.

Pride

Mike Lazaridis and (to a lesser extent) Jim Balsillie have a lot to be proud of, both from a technical and business standpoint. But they hung on too long. It was obvious for years before they finally left that the company was fighting a losing battle. RIM needed to change course a long time ago, and the former co-chief executives were incapable of doing that.

The company they led moved too slowly because Lazaridis and Balsillie were arrogant. Again, I recall interviewing Lazaridis in 2009 — a point where RIM's problems were more than obvious — and he would not deviate from the 'RIM is the best' line. RIM was not the best — he knew that, I knew that, and nobody was talking about fixing things.

Great leaders don't have to be leaders forever — they have to know when to pull out, which is usually when the world has changed around them.

Lazaridis and Balsillie didn't just hold off on a needed change of course; they also made several active decisions that turned out to be lousy. None of these calls was more emblematic of the problems at the top than the initial version of the PlayBook software. Only someone sorely lacking humility could possibly think it was a good idea to try to sell enterprises a tablet that couldn't do email without a paired BlackBerry smartphone. Faced with ever simplifying competition, why would anyone push complexity?

And for the sake of my blood pressure and yours, I'll only mention in passing Lazaridis's infuriatingly tardy response to last year's catastrophic BlackBerry outage.

RIP RIM

I feel very sorry for Thorsten Heins. It seems very unlikely that the recently appointed CEO can pull RIM out of this mess. Just look at his assertion in January that RIM needs to focus on consumers rather than the enterprise, and its sequel: the call in March for RIM to focus on the enterprise instead of consumers. He doesn't know which way to go, and how could he? There seems to be no way but down.

As I said above, it feels cruel to be writing about RIM this way. It's a company that has a lot of good people working for it, and that's done a lot for the creation and evolution of the smartphone — really, those who think Apple invented it all need to reappraise the importance of the BlackBerry, Windows Mobile and Palm. But, ultimately, history is not on RIM's side.

Topics: Smartphones, BlackBerry, Tech Industry

About

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't be paying many bills. His early journalistic career was spent in general news, working behind the scenes for BBC radio and on-air as a newsreader for independent stations. David's main focus is on communications, of both... Full Bio

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