How to save RIM: Suggestions from the ZDNet peanut gallery

How to save RIM: Suggestions from the ZDNet peanut gallery

Summary: Assuming RIM's not-so-dynamic duo of Jim Balsillie and Mike Lazaridis get tossed, the big question for the company remains: What exactly do you do with RIM?

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Research in Motion is an epic disaster. In fact, RIM might be the biggest train wreck in 2012. Late products, tablets without native email, a convoluted developer strategy and smartphones that just look dated created a parade of quarterly disasters.

RIM's latest quarter just drove the point home. It's so bad that rivals ranging from Amazon to Nokia and Microsoft have pondered a buyout. RIM's co-CEOs sound conciliatory and agreed to take $1 a year in annual salary. You get what you pay for.

Assuming RIM's dynamic duo of Jim Balsillie and Mike Lazaridis get tossed, the big question for the company remains: What exactly do you do with RIM?

Shockingly, few folks we've talked to have a plan---even potential buyers. Step one is to toss the co-CEOs. That move will feel good for all of 10 minutes and then reality sinks in. There's no RIM strategy here, but folks have coalesced around enterprise and exiting software and maybe even hardware.

My fix for RIM goes like this:

  • Boot the CEOs;
  • End the charade that RIM is actually good at software, user interface and mobile operating systems;
  • Go Android;
  • Outsource hardware;
  • And double down on taking the things that made RIM great---security, enterprise servers and messaging---and take them to new platforms.

In other words, RIM becomes a software company that can take the BlackBerry experience---or at least the experience that mattered when RIM was in its heyday---anywhere.

And if I'm feeling cynical my plan B consists of selling the now below book value RIM to companies that need intellectual property. Google would love to have RIM's IP. Perhaps RIM can sell Google patents when it moves to Android.

While you can quibble over the logistics of blowing RIM apart the common theme boils down to one word: Enterprise. RIM needs to focus. It needs to be about business technology. And it needs to do something pronto or frankly RIM may not even exist in two years.

Macquarie analyst Kevin Smithen said in a research note:

RIM’s hardware business is losing money by our estimates as investments in BB7, BB10, Playbook 2.0 and now a US marketing push offset a services business generating around $1 in EPS (earnings per share) by our estimates. The company could consider outsourcing to or partnering with a larger device manufacturer and abandoning BB10 in favor of a full adoption of Android. This would make RIM a smaller but more profitable and sustainable business. We would like to see RIM’s Board refocus the company on building enterprise features for Android on top of its core strengths of messaging and security.

I did an informal survey of our ZDNet network and here's what we came up with. Consider us the equivalent of the Peanuts' suggestion box.

Jason Perlow:

Get out of consumer and focus 100 percent of the business customer. Forget game apps and go balls to the wall on enterprise. Anything that deviates from this mission is a distraction.

Jason Hiner:

1.) Make its backend high-security platform (BES) platform independent with client software that can work on every mobile device that walks into your office. Split the BES and device businesses the way Amazon has split the digital book and ereader businesses.

2.) Screw QNX (RIM stinks at usability and UI) and jump all over WebOS. Put it on killer hardware and become the third wheel in the global smartphone market.

James Kendrick:

Not much RIM can do. Whatever RIM tries needs to be radical. My suggestion would be to scrap the BBX (BlackBerry 10) and grab open-source webOS and start over. WebOS has roots with good keyboard support.

Steven Vaughan-Nichols:

I'd tell RIM's executives to bite the bullet and give up their delusions of keeping the old Blackberry OS alive and stop wasting money on trying to develop a new QNX-based BlackBerry OS. There are not enough ISVs around to support either one. Instead, they should be spending their research dollars on porting Android to their platform and start working on their marketing campaign. "The reliability of a Blackberry and the application richness of Android. You can have in all on the 2012 BlackDroid."

And, do it Now. There's no time left to waste.

Ken Hess:

Not just for RIM, but for any company in their position, I think it would be interesting for them to create a mirror service, such as Skype for people to use in addition to their physical device. The accounts between the two could be shared. I'm not sure RIM is worth saving but I can tell you that the first company to do something like this will win a huge fanbase. They will never be without phone service and can use their service on any device.

David Gewirtz (DIY IT)

Become a software-only company. The need for secure enterprise messaging is far from dead. But they’ve completely lost the war on handsets and tablets. Focus solely on hardened messaging and there’s a chance they can stay alive (although in a vastly diminished form).

That, or they could start producing iPad games, which is Microsoft’s current strategy. Heh. RIM shot.

Also: RIM’s Q4 outlook: BlackBerry shipment projections tank | RIM expected to cut BlackBerry sales targets | RIM CEOs respond about poor U.S. sales, BlackBerry 10 delay | CNET: Want a BlackBerry 10 phone? Don’t hold your breath

Topics: Security, Mobility, BlackBerry

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57 comments
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  • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

    The $1 salary is a joke for folks that have expense accounts and $Millions in stock.

    The board should give them a $1 salary, strip stock and expense accounts ... and remove their decision making ability before they make more bad choices, like, .... making phones for Microsoft.
    BrentRBrian
    • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

      @BrentRBrian START BUYING BB 7 PHONES. PROBLEM SOLVED.
      augustus_rome
      • If RIMM wants to survive it must go Android

        Anything else will spell their demise or take over.
        Uralbas
      • Android would only hurt RIM

        @Uralbas.

        They would just be another Android "vendor", and nothing more, with high end hardware competing with cheap hardware. As many are discovering, most Android buyers are purchasing the cheap hardware.

        RIM would not survive going with Android.
        :|
        Tim Cook
      • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

        @Mister Spock

        I agree, Android is a non starter here as RIM has always been about the complete package they offer. Android would be a poor choice as if buyers are passing up expensive Blackberry phones for cheap Android phones now, how would making an expensive Blackberry/Android phone help them in any way.

        Answer: it would not. RIM needs to offer the unique package they have today. What they must do is enhance what they have, not go the "Me, too" path of Android.
        John Zern
    • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

      @BrentRBrian Can them I say!
      Kaffeguy
    • Or go with Vaughan-Nichols idea

      @BrentRBrian
      of adopting Android? It would appear that would be a bad choice, as HTC is discovering.

      It would in truth, actually be a much smarter move for RIM to start building Windows devices for Microsoft.

      Android and WebOS would not save them.
      :|
      Tim Cook
  • The peanut gallery ..

    It seems many people still fail to understand how RIM's solution and infrastructure function. It's not the device. It's all tied together. Only RIM and Apple control the whole stock and by doing some they are able to provide the security and management they are known for.<br><br>Unless Google provides full control of Android and the API's needed to manage the device fully RIM won't go near it. We see long it has taken them to buy QNX and intergrate with their backend. It's about 6 months away from being transitioned. When done it will be the most robust, secure platform on the market.<br><br>You need to accept the fact WebOS is DEAD. No one is going to use it, it has barely 1% market share, no one is making devices and if they do they will get squashed in the states. How did HP make out with it?<br><br>Now onto the woefully misguided "fixes"<br><br>- Android is not making anyone much money, How can RIM make any progress in a market with a new device every 2 weeks and a hodgepodge of OS and UI? Android is a mess and in worse shape then RIM, they have developers but that's going to last another year before it hits a wall. Google see's this is and trying to reel it back in some. <br><br>- Sure, force the CEO's to step down. They still own a controlling share of the company so who is the wonder CEO that is going to step in and make all right? There are no more Steve Job's out there. How many CEO's has HP been through?<br><br>- Agree outsource hardware to someone else, RIM cannot keep up here and should focus on fleshing out BB 10 / QNX. Samsung or hurting HTC make good options but ZTE is hungry as well. RIM has a lot of interesting acquisitions the past couple years that they have failed to execute on.<br><br>- TAT<br>- NewBay<br>- DataViz<br>- Ubitexx<br>- GIST<br>- Tungle<br>- Scoreloop<br>- TinyHippos<br>- JayCut<br><br>- Agree cut back the device catalog. 3 options Max. A low end, a high end, touch screen. This allows price points and devices for emerging markets. Spreading out to multiple devices is slowing them down.<br><br>- Considering the malware mess on Android, people still want a secure way to communicate and RIM remains a solid communication device. The mobile market is growing by leaps and bounds and RIM still has the 3rd largest market share. <br><br>- The stock price is outside of RIM's control. They are victim of biased US financial analysts and market shorts. For all the doom and gloom they are still growing, still making money. The past quarter was worse due to Playbook write down (which many companies do end of year, but lets ignore corporare accounting practices) and the costs around the service outage.<br><br>QNX OS 2.0 is solid, it fixes many of the issues the tech blogs have with it. I doubt it will be enough as they (ZDnet included) love to grill RIM and give passes to Apple / Android. I think many are just bitter they were stuck with a old 8000 series Blackberry and never really took time to learn the device, the OS or where RIM excels. Blackberry is a tool and when used as designed is the best of it's kind. Now if you want games and media streaming look elsewhere.
    MobileAdmin
    • but, RIM just doesn't have the resources to bring BB 10 to market..

      @MobileAdmin i actuarially agree that android move would be foolish for many, many reasons.. but.. they will run out of money before they can bring their BB 10 solution to market.. they just don't have the wherewithal to compete with Apple and Samsung.. they are going to get bought.. and if they have to much pride to be bought.. they will go out on their sword and go bankrupt..
      theFunkDoctorSpoc
    • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

      @MobileAdmin You strategy sound about right. <br><br>I would add three things,<br><br>one they should build there own Android store for all devices but treat like Apple does there's, test each piece of software to the max before releasing it for sale. <br><br>They need to invest in there media delivery capabilities, build a integrated music, book, and video store. <br><br>An they need to maintain there presence in the tablet market, which it seems they are currently doing. <br><br>And the fourth and final thing, stick two fingers up to the market analysts and the hedge funds that want to asset strip the company. <br><br>An I think RIM has enough money to survive for at least another year to two possibly longer. I do not think anyone will buy them because there is no one to buy them, Apple do not need, Samsung got there own software stack they are developing, Google got Motorola, Microsoft got Nokis. HTC have not got the money. Chinese companies would probably be blocked by the US and Canadian governments. Who else got the cash to buy them out and developed product, I cant think of anyone else an that why everyone in the markets just want to asset strip the company, because it easier than rebuilding it and there no one to buy it. <br><br>If anyone does buy it, it will be a private equity firms but given the lack of cheap cash out there, I do not think that will happen.
      Knowles2
      • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

        @Knowles2

        Possible options as there are many looking for a place in the mobile market

        - Dell
        - IBM
        - Intel
        - Cisco

        All of these would kill to have the presence RIM has in enterprise.
        MobileAdmin
      • Apple took 10yrs to build up it's ecosystem.. RIM has no chance..

        @Knowles2 .. NONE! of competing in the mobile device space.. Googles been at it for 3-4yrs.. and they haven't caught up either.. RIM?? Seriously now??
        theFunkDoctorSpoc
      • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

        @MobileAdmin
        DELL! That's the fit: Dell tried being an Android also-ran, and they do design decent hardware... I for one would fully support a Dell buyout of RIM.
        lorax1284@...
    • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

      @MobileAdmin Well said sir. The problem is not with the devices and quality of the "tool" that RIM products are designed to be. I'm on board with QNX for the phone devices. The new Torch 9850/9860 on QNX? Will shut up a lot of band wagoners.
      drice01
    • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

      @MobileAdmin Agreed. You should be analyzing for ZD rather than most of the shirts here who seem to be chasing RIM round the toilet boil with pitchforks in hand.
      dimonic
    • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

      @MobileAdmin<br>Thank you for writing the insightful, intelligent analysis of the market at large and RIM in particular that so-called pundits / journalists / analysts seem completely disinterested in or incapable of writing.<br><br>One point: you didn't address other posters' suggestions to "ditch the consumer market"... those that spew out such nonsense don't acknowledge that "the consumer market" is exactly where Apple lives, and how Apple devices are making inroads into the enterprise: employees are consumers, too, and many MANY companies allow their users to pick their own device and the company pays for it (not as secure as a corporate mandated & controlled device).

      RIM will catch up if it can successfully develop and market devices that are the best of both worlds, and I honestly believe and hope that a full touchscreen handheld device based on BB10 (and hopefully a Torch Slider form factor with the legendary keyboard / trackpad / touchscreen user interaction features) will fulfill on that.
      lorax1284@...
  • My suggestion

    Open BBM up to other platforms, better OS. Bigger PlayBook (PlayBook is good, just needs a 10" version) more apps, more apps, more apps..... and Angry Birds.

    Change branding and marketing to aim at younger market (teens) which is buying into BB, my kids and all their friends have Blackberry phones because BBM saves parents a fortune in SMS costs, RIM must take advantage of this release a cheap touchscreen phone around the price of the Curve 8520.

    Work with a big games console maker (Sony or Nintendo) to develop some sort of integration between a console and BB platform. Nintendo has nothing in the smartphone market, help them do this. Mario on a BB, BBM on the new WiiU.
    ben.rattigan
    • Angry Birds released today :-D

      @ben.rattigan

      A bigger Playbook, sure for some, but I'd keep my 7" and not switch.
      sagec
    • RE: How to save RIM: Suggestions from the ZDNet peanut gallery

      @ben.rattigan
      I am not a gamer, but the idea of linking apps between my smartphone and the bigger screen, is just so very Ironman 2. Someone needs to do this.
      mheartwood
  • get out of handset.. out of tablets.. all personal hardware..

    Larry, there is no longer any distinction between enterprise and consumer mobile hardware.. that's where tweedle dee and tweedle dumb screwed up.. they, like you didn't realize that this distinction no longer exist... this is why RIM is in the predicament they are in.. LG, Sony-Ericsson (now just Sony.. Ericsson's called it a day..) and Motorola can't make money from android.. none has made profit from selling android handset in about 2yrs of trying (see link below).. HTC had downgraded their numbers for next quarter twice already and their stock price has tanked (think they might have stuffed the market last quarter?? lol..).. Samsung is the only android manufacturer whose manage to make money on android.. why do you think RIM could make money in this area when everyone except on manufacture has failed?? android makes NO SENSE.. just get out of hardware all together.. there is no money in it unless you're Apple or Samsung.. these other guys are selling handset, but they are just not making money doing so.. and that's not viable long term.. the war is over.. it's Samsung vs Apple... everyone else will be out of the mobile devices game in two years time.. Apple takes in 60-66% of all profits from all cellphone sold (ALL cellphones not just smartphones) off of a market share of ~7% all cellphones (again, not just smartphones).. Apple is winning this war.. businesses exist to make profit.. no profit and you don't have a sustainable business..<br><br> <a href="http://www.asymco.com/2011/07/29/apple-captured-two-thirds-of-available-mobile-phone-profits-in-q2/" target="_blank" rel="nofollow">http://www.asymco.com/2011/07/29/apple-captured-two-thirds-of-available-mobile-phone-profits-in-q2/</a><br><br>RIM need to open up their secure platform to other people's hardware.. concentrate on the back end... that's the only part of the equation they excel at and it's already entrenched in companies, they use it they trust it.. just let other's (iOS, android) piggy back on it an use it.. sell your servers and backend equipment.. an enterprise play, yes but just get out of mobile hardware.. that war is basically over..
    theFunkDoctorSpoc