8 ways to fix RIM with a reality check

8 ways to fix RIM with a reality check

Summary: Jefferies has eight suggestions that could turn RIM around, but let's give each one a reality check first.

TOPICS: BlackBerry

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 fall. (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 optimize 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 optimized portal to a particular outlet (i.e. Amazon, Netflix, probably not Hulu Plus...), or developing a smartphone or tablet for another major brand. For example, Samsung is rumored 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 analyze 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.


Topic: BlackBerry

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  • Email R Us

    I really like #1. From what I can tell, 90% of the reason people have Blackberries is that the secure email and the centralized device management appeal to the IT types.

    At one time their hardware was probably as good as the next guy's, but their stuff is no longer cool, leading edge, or even profitable. So why not toss the whole hardware thing and become "email as a service" on as many hardware and software platforms as make sense?

    I also like #3, especially the use of the euphemism "refresh" for what needs to be done to the management team. From what I can see, Mr. Balsillie spends more time fostering the creation of world government than he does managing any part of RIM. If he wants to go off and do Good Works like Bill Gates, well bless his heart, but let him do it on his own time.
    Robert Hahn
  • RE: 8 ways to fix RIM with a reality check

    How do you fix the perpetually broken? I don't think RIM has a prayer at this stage in the game. Once W7 really kicks off, it will overshadow the lagging RIM, and knock them out of the game completely, especially once the Nokia W7 devices come out.
    • RE: 8 ways to fix RIM with a reality check

      maybe youre right, but i have a gut feeling that blackberry will survive and nokia will continue to flag
  • 8 ways to fail, rather

    there is only one way to success: ditch qnx and adopt Android.
    Linux Geek
    • You have to be kidding

      @Linux Geek QNX is probably the most advanced operating system on the planet, and was built from the ground up to run in real time on small embedded devices, unlike other bloated operating systems ported from bulky desktop and server environments. Its capability for Transparent Distributed Processing is wholly unlike and superior to anything available on any other small device system.

      If they could do anything stupider, I can't imagine what. However, the Android compatibility layer they're planning to include is a smart idea. Compatibility with Android, due to its market reach, is important.
  • RE: 8 ways to fix RIM with a reality check

    More likely than not, RIM will have to license Windows Phone from Microsoft and bolt its own BBM and Blackberry email on top.
  • LTE on iPhone 5

    "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 fall. (It would be shocking if Apple chose to be left behind here.) Thus, RIM cannot let itself fall behind any further as well."

    Actually what would be shocking is if the iPhone 5 DOES have LTE support, leaving out features regarded as 'essential' so that they can have something to add for the next generation has been Apple's SOP for years, which is why they didn't add 3G until the second generation, and didn't add a camera to the iPad until the second generation.
    Doctor Demento
  • Way to fix RIM? Easy.

    First don't scr?w the owners of current products. When version 6 of the OS came out, only a few older models could get the upgrade even though some of the models that didn't get the upgrade weren't that old. Geez. even Apple supports some older products.
    Second, why don't they ask the user what they want. OS 6 was a decent improvement in some areas and a bit stupid in others [going backwards].
    Third, getting Bing included? Luckily I don't have a data plan.
    Fourth. Stop playing with these mickey mouse upgrades [a slighly better CPU and memory]. While at it, ask the current users what they want. Not what you think they want.
    Fifth. Time to dump the two CEOs.
    Sixth. Create non-BlackBerry version of BBM.
    Gis Bun
  • RE: 8 ways to fix RIM with a reality check

    I have been advocating for a while now, that RIM should get out of the mobile hardware market, and offer its BBM & BB E-Mail as a service on all platforms, including offering the option of licensing their security technology from the BlackBerry phones to the other mobile manufacturers out there to ensure that the device security continues to be available - BlackBerry's strength.

    I do not believe that they are making any money on hardware sales - in fact, the BB phones are now so heavily subsidized in emerging markets (LatAm & Caribbean) that they are actually losing money on those.

    On the other hand, the ability to provide the service on the majority of iPhones, Androids, Nokia/WinPh7 and other smart phones will offer a huge market opportunity and possibly a chance to make much more money, and reverse the slide.
  • RE: 8 ways to fix RIM with a reality check

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