RIM or Nokia: Which has the better turnaround prospects?

Summary:Both companies have suffered extensive market cap losses and share drops, and both are struggling for market share. Which company will fall first?

Zack Whittaker

Zack Whittaker

RIM

or

Nokia

Matthew Miller

Matthew Miller

Best Argument: RIM

The moderator has delivered a final verdict.

Opening Statements

At least RIM has a paddle

Zack Whittaker: RIM and Nokia are both up the creek, though RIM has a paddle. The BlackBerry brand still commands respect in mobile circles, despite its name suffering thanks to the mismanagement of its corporate parent. When people think of Nokia, they think of 1990's aged brick-sized phones that when dropped would do more damage to the sidewalk than the phone would.

From a financial point of view, the two companies have lost more than 80 percent of their respective market caps in the past five years. RIM has a secure enterprise infrastructure alongside phone-making hardware unit, while Nokia has only the latter. RIM, despite its share price slump, is still an attractive sell. Nokia just has phones and patents. While patents are today's gold dust weaponry, once the litigation wars are over, Nokia will have nothing left.

Nokia's exciting new devices

Matthew Miller: While Apple and Google enjoy the spotlight, Nokia and RIM are trying to stop the bleeding. RIM has primarily focused on the enterprise and this can sustain them for a while, but consumers are bringing more of their own devices to the workplace and RIM's devices are not nearly as desirable as today's modern touchscreen devices.

Nokia made a significant choice to go with Windows Phone and their first two devices in the U.S. are reportedly doing very well. The public has been slow to adopt Windows Phone, but there has been a steady trend upward in sales since launch and the U.S. public is finally getting reacquainted with Nokia.

Nokia's Windows Phones are exciting devices, the applications blow away what is found on BlackBerrys, and they license technology to the other players, while RIM showed off an updated keyboard and some camera software that is coming to BB 10.

The Rebuttal

  • Great Debate Moderator

    Thanks for joining us

    Zack and Matt will post their closing arguments tomorrow and I will declare a winner on Thursday. Between now and then, don't forget to cast your vote and jump into the discussion below to post your thoughts on this topic.

    Posted by Jason Hiner

    Thanks Jason and Zack

    It was a pleasure debating as Zack and I both support the underdogs :)

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    Who's making the better devices?

    When we put all of the history and perception problems aside, which of the two companies is producing better smartphone products in 2012 and why?

    Posted by Jason Hiner

    Shock, horror: Nokia is.

    I know; I should be arguing for RIM. But besides its Porsche Design model aimed at only the rich and the downright stupid, RIM hasn't made a new smartphone in years. All it has done is piggybacked off the successes of its previous devices and mildly improved them incrementally. (I wonder if I still get points for honesty?) But what RIM has to offer next, we don't know, and we await the company's offerings. There's a good chance RIM could take that third place by the horns and offer its smartphones as the "alternative" in the smartphone market. One thing for sure though, Nokia doesn't have a chance.

    Zack Whittaker

    I am for RIM

    Does RIM have any new smartphone products in 2012?

    Given that RIM isn't really producing any new products right now, it is easy to say that Nokia is winning here. Then again, the Lumia 900 is not without its issues and Nokia has made better products in the past. I honestly think the 2011 RIM BB 7 devices were great, but RIM needs to get BB 10 devices out before the end of the year before they lose all mindshare. Companies have a difficult time getting back into the forefront when they take time off. Microsoft's Windows Mobile platform was doing quite well before the iPhone and then they took a year off during the transition to Windows Phone and lost a lot of mindshare. They are now slowly coming back, but RIM really cannot afford to take a year off as they don't have the same financial food bank that Microsoft has.

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    Why are some users still sticking with RIM and Nokia?

    For the users who are still choosing to buy or stay with RIM or Nokia devices, why are they sticking around?

    Posted by Jason Hiner

    Sometimes the third choice is the best choice

    I don't think loyalty necessarily fits into the equation here. I think particularly for enterprise customers, a specific niche has been forged out of RIM's product line. BlackBerry's are one of the few still yet to fully embrace the touch-screen evolution. Physical keyboards are ideal for sending those slightly longer emails, and the devices are not bogged down with unnecessary features. And, above all else, most BlackBerry smartphones have better battery life than any other Android device or iPhone going. For Nokia, I believe its line-up of low-cost cellphones keeps the company in play with emerging markets. Even with today's announcement of the Nokia 110 and 112 phones, these devices will make less than 1 percent -- if that -- impact in Europe. I'd happily bet money on it.

    Zack Whittaker

    I am for RIM

    Work issue and nostalgia come to mind

    I think RIM enterprise users were likely issued their phones and it is company policy to use it. Consumers may be heavily invested with BBM and resistant to leave because their BlackBerry is familiar. However, when they see their friends and family using the latest iPhone or Android device this loyalty starts to fade. Nokia has been around for a long time in the mobile space and I think nostalgia and a desire to see them succeed is keeping many consumers around. I know I am a bit guilty of that, although the only modern Nokia device I have at the moment is the MeeGo-powered N9. I may get an Apollo Nokia WP, but Microsoft and Nokia need to start that conversation and storytelling very soon to keep people interested as a new iPhone launches and fantastic Android devices just keep getting better.

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    Will investors have patience with Nokia?

    Nokia's stock price reached new lows this week. Its revenue is plummeting. Will investors have enough patience with the company to allow it to ride out its Windows Phone strategy?

    Posted by Jason Hiner

    Microsoft's nail, Nokia's coffin.

    Nokia announced the Windows Phone partnership in October. Take one look at Nokia's stock price -- yes, this week it has seen record lows -- but ever since the initial spike in October, its price has steadily fallen. The preceding few months remained low but steady, and started to drop just after the announcement. I don't believe in coincidences; I am certain the Microsoft deal banged in the final nail to Nokia's coffin. Investors will have a tough call to make: stick out the investment knowing Microsoft shells out $1 billion per year to promote and develop Windows Phone-based handsets -- or it can bail on that valuable income and all but guarantee a revival with Android under its belt. The former holds a steady income with a high chance of failure, while the latter is a risky bet but with a high chance of success.

    Zack Whittaker

    I am for RIM

    Nokia will be in the game as long as Microsoft is

    If Windows Phone was doing better with other manufacturers then I think investors would have more patience. Nokia's decline, combined with the slow adoption of Windows Phone, is not comforting and I know I would be a nervous investor. Then again, Microsoft appears to be in it for the long haul and has the funding to stick it out. With Samsung, HTC, and others doing very well with Android, Nokia is a prominent part of the Windows Phone strategy and should be around as long as Microsoft is willing to continue with WP. Nokia has succeeded in the past with multiple operating systems in devices at the same time and I really wish they would have continued with MeeGo. A MeeGo-powered PureView camera device could have been a pure joy to use.

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    Are the percentages pretty bleak?

    When you look at the smartphone market, it's clear that it is consolidating around two platforms -- iOS and Android. Realistically, how much market share are RIM and Nokia battling for in trying to take third place? Is it greater than 5%-10%?

    Posted by Jason Hiner

    Frankly, yes. But Nokia will fare worse.

    RIM had just shy of 20 percent of the global market in 2009, according to Gartner. It might be a push to suggest RIM can claw back or exceed what it lost in the next few years. It would have been better had the company remained competitive in the face of Android and iPhones. But I whole-heartedly believe that the third place remains with the Research in Motion. It still offers a viable alternative to the mainstream brands. Simply put: if one doesn't want an Android smartphone or an iPhone, the vast majority will still consider a BlackBerry. It maintained its brand power in the face of corporate difficulties unlike Nokia. In fact, what may have helped Research in Motion is branding its smartphone away from its corporate parent. The more negative headlines Nokia make, the more it will find its phone brand suffering. People make simple associations. Ask a group of average consumers "which company makes the BlackBerry smartphone?" and most will not know.

    Zack Whittaker

    I am for RIM

    5-10% would be great for either platform

    I think 5%-10% is about right and given the trend I have seen over the past year I would say this market share would be a booming success. I don't see how either can achieve more than this anytime soon unless iOS and Android completely shut down. While WP is great and I like using it and the BB PlayBook OS (similar to what we will see in BB 10) is fantastic, I can't offer many legitimate reasons why someone should not go with iOS or Android at this time. Back when the iPhone was first announced Steve Jobs said the iPhone would be successful with 1% of the market so gaining 5%-10% is great. If we look at these two companies, RIM's market share is down below 6% and the trend shows continued loss while WP has been on a steady, but slow rise since launch, and is at about 2% right now. At least WP is rising so that trend is good.

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    What if RIM only sold software and services?

    If RIM got out of the device business and became an enterprise services company that could secure any BYOD devices that connect to a company network, could it still be successful?

    Posted by Jason Hiner

    Absolutely

    And some have argued it should do exactly that. Outside of its smartphone-making arm, it still has one of the largest -- and despite its crippling four-day global outage last fall -- the most reliable data networks in the world. Its messaging infrastructure which could prove useful to Microsoft with its hosted Exchange and Office 365 services. Even Apple could take a shot at buying it for its burgeoning iMessage user base. With rumours that Apple may start its own cellular network, it wouldn't surprise me to see the company eyeing up RIM's data network for its own. RIM of course also has a smartphone making business. While its smartphones need its data infrastructure to continue operating, if the BlackBerry brand goes under, most companies could probably make a bid for RIM and come away with a robust data network.

    Zack Whittaker

    I am for RIM

    Depends on the definition of success

    I think it could help, but if companies still needed a BES then that is an additional cost that small and medium businesses don't have now with Windows Phone and Microsoft Exchange. IMO, the security of RIM is something that keeps government organizations and large companies as customers, and rolling that out to more manufacturers may help people accept other platforms. If success is defined as RIM still being a company that stands on its own, then becoming a services company only may not be enough. If success means continuing their back end services (even under another company name) then that could be viable.

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    Nokia's software problem

    For Nokia, isn't the problem a software problem? Nokia continues to produce impressive hardware, but they have replaced a Symbian OS that very few people still wanted to use with a Windows Phone OS that very few are excited about. As one European telco executive recently put it, wouldn't the new Lumia smartphone line have been a lot more successful if it had been running Android?

    Posted by Jason Hiner

    You mean Microsoft, right?

    Nokia certainly has a software problem at least if we're talking about the Lumia line-up. But outside this select group of new smartphones, its hardware is hardly anything to shout about. It wasn't so long ago I suggested Nokia should ditch Windows Phone in favour of Android. The trouble with Android's ecosystem is that the smartphones are not guaranteed to be successful. Android as an operating system undoubtedly is, but as I said earlier, some smartphones don't make it while others do. I strongly suspect the deal was more for Microsoft than it was Nokia. In April, I described the partnership between the two companies as Microsoft holding Nokia "technologically hostage". Either that, or the two thought a joint venture in the smartphone space would somehow revive their place in the market share rankings.

    Zack Whittaker

    I am for RIM

    I think software is great, hardware could be better

    Honestly, I don't think the hardware is up to the level that I am used to on older Nokia Symbian devices. The Lumia 800 and N9 are solid devices, but the Lumia 710 and 900 are not as good as I have seen from Nokia and could be improved. I know they have a PureView camera WP device coming and that should help in the hardware department and honestly they have only been making WP devices for a year. People need to use Windows Phone to appreciate it and this is going to take some time, but I think the software is fantastic and offers people a fresh UI that lets them get things done quickly and easily. I previously was against Nokia using Android, but after using the HTC One X and Galaxy Nexus, I think Android may have been a good choice since Nokia could have had more flexibility to offer fantastic hardware with advanced optics. It seems the Windows Phone OS hampers Nokia a bit with limited camera software support, no NFC, and other limitations not seen in Android, MeeGo, or even Symbian.

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    RIM's device problem

    For RIM, isn't the problem mainly a device problem? The company hasn't released a hit device in a long, long time. Does this company still have the ability to produce a hit device?

    Posted by Jason Hiner

    Nail on the head.

    It's true: the company hasn't released a new, competitive phone in the best part of two years. But it's not all about hardware. Because RIM's ecosystem includes both the operating system and smartphone hardware, it has a doubly hard task. Google can take a backseat on Android because if one device doesn't sell, there are a dozen more than probably will. With RIM, it offers the same old reliable but kind-of boring operating system, and hasn't deviated from its design or feature set in years. BlackBerry 10 will (hopefully) change that. RIM's concept touch-screen device shown at BlackBerry World shows some promise. But don't worry: RIM is committed to physical keyboards, so the company will cater for all its customers, old and new.

    Zack Whittaker

    I am for RIM

    RIM makes better hardware than Nokia's latest devices

    RIM's BB 7 hardware, across the line, was actually quite good and if my small business had a BES I would have kept my Bold 9900. They have always made good hardware, but lately there hasn't been a BB that everyone HAD to go out and buy. The mockups of a possible BB London look fantastic and something that could generate excitement for RIM. I think they have the experience and ability to make a hit device, but they need to move faster in this space and make RIM "cool" again.

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    The enterprise angle

    As platforms, BlackBerry and Windows Phone both have long-time partners and fans in the enterprise. How can they translate that into success in a world where the enterprise is procuring a lot fewer devices?

    Posted by Jason Hiner

    Forget smartphones. Think tablets.

    RIM needs to hold it steady and carry on with what it's already doing. BlackBerry already has an edge in government-grade security and has received certification from both the U.S. and U.K. governments. Nokia doesn't, and neither does Windows Phone. The enterprise is also looking for the middle ground between PCs and smartphones: tablets. Forget smartphones. RIM already has a (granted) failed tablet, and Nokia's design chief said earlier this year that it will likely bring out a Windows 8-powered ARM tablet. RIM is all but out of the enterprise tablet race; the PlayBook bombed and the company will likely scrap the tablet altogether. Depending on the success of Windows 8 -- considering Nokia's already failed venture with Microsoft in Windows Phone -- a tablet could fall to the same fate.

    Zack Whittaker

    I am for RIM

    Embrace BYOD, but still sell security and control

    I understand that BYOD is becoming they method by which many people get the latest and greatest smartphones in the office. These two platforms have always had high security standards and I think they need to keep stressing that in the enterprise. More companies are OK with letting people bring in their phone, but an understanding of the security risks is essential here. Companies and government agencies still do issue devices to employees and Microsoft/Nokia need to "sell" the security functions and support while also making devices that appeal to the advanced features that consumers want.

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    The opportunities for challengers?

    With Apple and Google increasingly controlling the smartphone market, where are the opportunities for challengers to hone in and do something better?

    Posted by Jason Hiner

    Stick with what you know, RIM.

    That's the thing. Apple and Google don't control the market: the people control the market. RIM has lost out to Apple and Google because the two companies kept ahead of the game, while RIM stumbled and brought out Nokia-esque updates to its existing line of smartphones. It was late to using touch-technology, and only incrementally improved its Bold, Curve, and Touch line-up of smartphones with camera upgrades, memory increases, and minor operating system additions. Nokia makes more phones than any other manufacturer because it takes one model, adds a camera with more megapixels, and unfairly brands it a "new" device. People got bored; it's as simple as that. I would argue that the shift away from BlackBerry's was mostly in part to RIM's failure to keep its faithful flock interested -- as much as Apple and Google's exploiting RIM and Nokia's weakening market share position.

    Zack Whittaker

    I am for RIM

    Ecosystem alternatives and enhanced services

    It's a tough market at this time and even though I enjoy using Windows Phone I can't tell you there are extremely compelling reasons for someone to switch if they are satisfied with iOS or Android. I think challengers can create good products through enhanced ecosystems and services. It is a bit late to compete in the application offerings, but they can get on par with current smartphone platforms. I agree with Zack that people get bored and the fact is that some are getting that way with iOS so there are opportunities available.

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    What are Nokia and RIM doing right?

    When we look at Nokia and RIM, it's easy to see a lot of the things that the two of them are doing wrong. What are the things that the two of them are doing right that could eventually help them get back on track?

    Posted by Jason Hiner

    BlackBerry 10 may be late to the party...

    Nokia has a lot it needs to do to get back on track. RIM already has the means to do so. It has an enterprise email infrastructure, encrypted consumer instant messaging, and a brand power that still holds power alongside Android and the iPhone. The only thing RIM needs to do now is innovate. With BlackBerry 10 coming later this year to coincide with the launch of new and exciting smartphones, the company has a good chance of climbing out of the hole that formed around it. Simply put: all the pieces are there for RIM to make a comeback. It just needs to speed things up a notch, work that little bit harder, and hit the market before it's too late. And, if it can kindly not screw anything else up in the meantime, that would be an added bonus.

    Zack Whittaker

    I am for RIM

    Nokia is focused and RIM lost confusing leadership

    Unlike in the past when Nokia had multiple operating systems, it is very focused on Windows Phone at this time and I think that focus should help. They also spent too much time and money on Ovi services in the past and have now focused on supporting the WP ecosystem. RIM is trying to work with developers to encourage them to create for BB 10. They finally ditched the co-CEO strategy and are letting Thorsten focus a bit more. I can't think of anything else that RIM is doing right at the moment.

    Matthew Miller

    I am for Nokia

  • Great Debate Moderator

    Mic check

    Are both of my debaters online?

    Posted by Jason Hiner

    Yep, I'm here

    All ready and set.

    Zack Whittaker

    I am for RIM

    Check check

    can you hear me?

    Matthew Miller

    I am for Nokia

Closing Statements

RIM has a revival strategy

Zack Whittaker

Both Nokia and RIM are struggling, that's clear. What isn't clear is how Nokia is going to dig itself out of the mess it fell in. RIM has a plan; a revival strategy to get back in the game and compete for the much coveted third-place spot behind Android and the iPhone.

But Nokia is floundering around and its business continues to stagnate. RIM knows it is in a rut and is making a concerted effort to do something about it. BlackBerry 10 is just around the corner and has a good chance of succeeding. Nokia's revival plan was Lumia. With falling Windows Phone marketshare and poor Lumia sales, Nokia has already had its last chance. If BlackBerry 10 fails, RIM will land itself in the same position that Nokia is in today. Nokia will crumble, but RIM has enough assets to spin off and sell what it has.

Nokia is trying something new

Matthew Miller

The future is not so bright for Nokia and RIM at the moment, but things move fast in the mobile space and a company can gain a sizable share of the market in a short period of time. Zack has some good points about RIM, but I do not see much respect for the BlackBerry brand in my daily life.

Nokia is trying something new with Windows Phone; and with an efficient and fresh operating system in hand combined with Nokia's history of exciting devices I think Nokia has the best chance at turning things around and getting back on a path to success. Consumers are bringing devices to work and Windows Phone is currently much more modern and exciting than what RIM has available. RIM hopefully will amaze us with their BB 10 OS and devices, but that won't happen until late 2012.

RIM has a better shot

Jason Hiner

It's clear that both RIM and Nokia look like they are in big trouble. Both have gotten steamrolled by the momentum of Android and iPhone during the last couple years. But, Zack and Matt highlighted the possibilities that these two have for bouncing back and carving a niche in the future. Both RIM's BlackBerry and Nokia's Windows Phone platform have allies in large organizations, and while these organizations don't roll out as many phones as they used, they are still a powerful force in the mobile market. RIM or Nokia could still build a niche business around building a better solutions for corporate smartphone users better than Android or iPhone.

As Matt articulated, right now Nokia appears to be poised to have the best chance to become the No. 3 player in the smartphone market in the years ahead because it has the strength of Microsoft behind it with the Windows Phone deal and it still has Nokia's relationships with global wireless carriers. However, even Matt didn't appear totally confident about Nokia's way forward and the numbers show that Windows Phone continues to struggle at around 2% market share in smartphones. Meanwhile, BlackBerry is still hanging on to about 15% marketshare and has a more loyal cadre of fans, despite the fact that it hasn't released any innovative new smartphone designs in years.

Thus, I'm going to be a contrarian one this on and side with Zack, because as he said, if RIM comes through with some hit smartphones to run BlackBerry 10 then it could orchestrate a nice little rebound. The company is overdue for a hit device and without the distraction of working on the PlayBook this year, I think they have a shot at it. BlackBerry simply doesn't have as steep of a climb as Windows Phone, where Nokia has pinned all of its hopes.

Topics: Great Debate

About

Jason Hiner is Editor in Chief of TechRepublic and Long Form Editor of ZDNet. He writes about the people, products, and ideas changing how we live and work in the 21st century. He's co-author of the upcoming book, Follow the Geeks (bit.ly/ftgeeks).

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