Nokia, RIM: Sidekicks walking through the valley of the shadow of death

Nokia, RIM: Sidekicks walking through the valley of the shadow of death

Summary: Nokia and Research in Motion should collaborate on their respective corporate slogans. In fact, the companies could just share a slogan: "Just wait 'til 2012!"

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Nokia and Research in Motion should collaborate on their respective corporate slogans. In fact, the companies could just share a slogan: "Just wait 'til 2012!"

The big question is how many body blows Nokia and RIM will take in the smartphone industry in 2011 as they wander into 2012 when their latest greatest devices land

Let's start with Nokia since it is in the most danger. On Wednesday, the company signed its definitive agreement with Microsoft to use Windows Phone 7 as its operating system of choice. In a blog post, Nokia portrayed the speed of the Microsoft definitive agreement as "an example of the speed at which we plan to move together."

But there's a catch.

Hundreds of our team members are already working together toward a multi-year product roadmap and are on-schedule to deliver volume shipments in 2012 although the pressure is on for first delivery in 2011.

Nokia's first quarter earnings report, highlighted a sales gain of 9 percent and a profit decline of 7 percent. Overall, Nokia's quarter wasn't half bad. But future quarters get worse. Nokia CEO Stephen Elop said:

Following a solid first quarter, we expect a more challenging second quarter. However, we are encouraged by our roadmap of mobile phones and Symbian smartphones, which we will ship through the balance of the year.

Nokia's outlook also calls for more pricing pressure and a lower contribution from new products and market share declines. Barclays Capital analyst Andrew Gardiner noted that Nokia finds "a deeper 2011 trough ahead of a 2012 recovery." Gardiner wrote:

Nokia is guiding us towards a steeper decline in market share and margins than anticipated by consensus, although we believe investor expectations were already low. The events in Japan are also affecting Nokia's unit volumes in 2Q and 3Q.

Morgan Stanley analyst Patrick Standaert was a bit more direct:

We remain concerned by the speed at which the company is losing market share (29% in 1Q11, down from 31% in 4Q10 and 33% in 1Q10) and its weak portfolio/eco-system momentum (WP phone only due in 2012).

And that's the rub. It will be open season on Nokia in 2011. Will anyone really want to be the last person to buy a Symbian device in the second half of the year? It's doubtful. Nokia will be lucky to move any smartphones in 2011 as most folks wait to see what the handset maker will do with Windows Phone 7. Even then, Nokia's standing in the smartphone market is far from assured.

Research in Motion is largely in the same position. Let's take a break from beating up the PlayBook in reviews to note the one positive most people agree on: The QNX operating system works well. In fact, the PlayBook may stoke some interest about QNX and its abilities on a smartphone, or what RIM has called a superphone.

The problem with a little QNX interest is this: RIM won't have QNX devices until 2012. In the meantime, RIM will try and sell you BlackBerry OS 6.1 devices.

Listening to RIM co-CEO Jim Balsillie on RIM's recent earnings conference call led to a sense of deja vu. This time last year RIM was going into its big annual conference talking up the Torch and BlackBerry OS 6.0 and how those products will save the day. In 2011, RIM is betting on the PlayBook and BlackBerry OS 6.1 devices to save the day. On deck: QNX superphones in 2012.

Can someone explain to me why I want to buy a OS 6.1 device this year?

Analysts were wondering the same thing on RIM's fourth quarter conference call. Gus Papageorgiou, an analyst at Scotia Capital, asked:

You're going to be releasing the BlackBerry 6.1 devices and then you're saying QNX coming 2012.I'm just wondering if carriers are expecting QNX devices to be coming not too far behind the 6.1 devices is that going to cause some hesitation to adopt the 6.1 devices? Like, why not just wait for the QNX devices and hold off for 6.1?

Balsillie's answer:

There's a time lag between the 6.1 and the QNX stuff and the certification cycle So that's point number one. And second of all, 6.1, if you saw the products, the demand in interest for those products is amazing. And so there's just enormous interest in the new products. And clearly looking at the superphone market, which is really going to be a redefined, in so many ways of capability, that's going to open up that whole aspect of future performance. But never in any of these has there been diminished interest in the new 6.1 devices. The interest is super intense.

Balsillie was later asked about whether 6.1 would enjoy sustained uptake. An analyst then asked him to explain why 6.1 was a major upgrade and RIM's co-CEO said:

We've not announced all the details. I think you see that at BlackBerry World so I'm just not going to go into a lot of details. We haven't announced it formally yet. No, no, the power of the 6.1, and it's highly sustainable, the interest in it. No, there's no -- the meetings with the carriers on these products and the level of commitment is outstanding.

If RIM doesn't deliver another round of must-have Blackberries then it will be holding the fort until 2012. Just like Nokia.

Related: RIM's Android compatibility for BlackBerry PlayBook and QNX will be a big game of chase

BlackBerry PlayBook out of box experience

Four pleasant surprises in the BlackBerry PlayBook

Topics: Mobility, Hardware, Mobile OS, Nokia, BlackBerry, Smartphones

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21 comments
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  • RIM will do OK in the business

    We are still buying OS 5 devices as they work we with our existing infrastructure, why would we change ?

    AS for Nokia, most people buy a phone (unless it is an iPhone) so they wont care what OS it runs, providing it runs facebook, twitter, etc
    andyfla
    • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

      @andyfla I was going to say the same in regard to most people just buy a phone but will the carriers and their in store staff support/push the devices is the big question. Unless a customer comes in with a specific phone in mind it's the in store staff that leads the consumer to their device choice.
      non-biased
  • Message has been deleted.

    xiaojiekre
  • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

    I don't think people realize how popular the orginal Bold was. A beefed up Bold with a touch screen is the magic unicorn of Blackberrys for the diehards.

    You also have the next take on a full touch screen Storm. Storm 2 is almost 2 years old and RIM has spent a ton of time getting it right.

    Does anyone think the next iPhone will be anything major? iOS has not changed since it launched outside of allowing folders to be created. Everything else has been software tweaks.

    For everyone who wants RIM to keep pushing the hardware they are selling more devices then ever. The issue is we still expect the United States to be some measure of a companies performance when RIM is now a global brand. Sure they want to compete here but their trying to balance how to grow their business.

    So to recap for Larry, OS 6.1 devices:

    - Much improved hardware
    - NFC
    - Improvents to OS (Open GL support)
    - Cross carrier launch (none of the X model on 1 carrier)
    MobileAdmin
    • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

      @MobileAdmin [i]A beefed up Bold with a touch screen is the magic unicorn of Blackberrys for the diehards. [/i]
      I think the biggest issue for them is the diehards themselves. Aren't the number of "diehards" falling?
      non-biased
  • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

    The mobile phone market is converting into a smartphone market, rimms blackberry market share is decreasing because the market is becoming bigger not that the market share of blackberry is being cannabalised, the market share of nokia is getting hit as they ae loosing same to smartphones, blackberry entreprise phone market is still with rimm more or less, so all this publicity of rimm market share being eaten awy by others is not fair,
    M Arif
    • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

      @M Arif Good point - Apple simply converted a good portion of cell phone (Sony, Nokia, Motorola, etc.) owners with the iPhone simplified UI - so the market has indeed expanded. On the other hand, BlackBerry's stronghold is on the corporate client largely because of their BES infrastructure - it simply works and works reliably, cool factor aside. So is RIM losing the battle - I doubt it, the iPhone is a Palm reincarnate and will go through the usual S cycle. For now, analysts and industry watchers - such as Larry and Andrea - are enamored by their growth no less than when Nokia and Palm ruled the handheld device some years ago. Still this sort of competition is beneficial to both the consumer and enterprise.
      HumZ
  • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

    The point of the article isn't whether RIM and Nokia will shift any phones (obviously they will, plenty are happy with Nokia dumbphones) but how both companies in 2011 are forced to plug ageing operating systems.

    Both Blackberry OS 6.1 and Symbian are rubbish compared to iOS, Android and even WP7 in the UI stakes. RIM know this, why else would they be releasing QNX phones next year? They need a decent touchscreen UI.

    The power of Blackberry and Nokia has always been hardware, not software. These changes may finally bring them decent software too, pity we've got to wait until next year to see it.
    bradavon
  • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

    I have had two Nokia phones that i love (E61 and E71x) but I doubt that my next phone will be a Nokia and it pains me to see how clueless they are in marketing their phones. And as isolated as the Symbian OS is from the two major mobile ecosystems, I would take a Symbian OS phone any day of the week over WIndows Phone 7. I applaud RIM fro holding their own with phones that I think are crappy, but I won't be switching tothem either, so I l;ike the rest of the world will either go iOS or ANdroid.
    whooizit1
    • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

      @whooizit1
      You have taken the words right out of my mouth with one caveat: the e63 was a dud and I had to replace it with an e72 which is a great phone! BTW, my e61 did most everything an iphone does, only years and years before the iphone. Nokia, What Happened to You?? MS is NOT the answer to anything but reboots!
      rovolet
  • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

    We need to start telling the truth about the background to this situation.

    Balsillie?s answers are full of negative messages, signs of confusion, denial and failure. His tenure at RIM has held the company back for 4 years since Apple announced the iPhone.

    Elop is Microsoft's Trojan horse at Nokia. It's clear that his deal with M$ is designed to look like a rescue package for Nokia following the failure of Symbian due to criminal neglect, but it's as much a rescue package for M$'s failed mobile plans. And it won't work.

    Both these men clearly have a lot to answer for, but no less than Ballmer, who's own leadership at M$ is the most lamentable we've seen. The Elop/Nokia conspiracy is as dirty as any deal that formed the Redmond leviathan and has sustained them over the last three decades. These kinds of tricks worked in the 20th century because the main customers were addicted corporate buyers and ignorant consumers. The 21st century is all about user focused mobile devices and informed customers.

    As for this hope of 2012 resurrections, just calling something a "superphone" won't make it sell - or worth buying. Okay, if Apple called iPhone 4s, iPhone 5 or iPhone 6 a "SuperPhone", they'd be queueing around the block from New York to Bejing for it. But neither Nokia nor RIM have a hope in hell of ever seeing queues for anything other than refunds.

    If carriers are smart, they will screw very very cheap deals out of these two losers for at least the next 12 months, and they should grab them with both hands because that is the only policy that will sustain any sort of product turnover.

    Personally, as a former exclusive Nokia devotee and now a very happy iPhone owner, when I look at the copycat offerings from the rest of the market, I wonder if there's a single individual capable of an original thought in any of these companies. It's clear they haven't a clue how to create genuine consumer focussed design, development and marketing policies.

    I predict both Nokia and RIM will fail - in very big and spectacular ways within the next 5 years. No company can afford to lag behind the market trend for so long and hope to survive.
    Graham Ellison
    • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

      @Graham Ellison Funny. Because one of the lessons Apple teaches is it is very possible to pioneer a platform -- become a niche player in it -- and still survive and even prosper. They (Apple did this with PCs). RIM can do this as well. They practically invented the smartphone. They will not be a mass market player. But who will want to be once there is no more profit in commodity hardware/cookie cutter Android handsets. Apple will follow the same path as RIM.
      southlander
      • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

        @southlander It funny you say Rim invented the smartphone, they got lucky with an overgrown pager and slapped on a screen. The innovations from RIM are like the North American car manufactures, tweak the crap slightly and the blind will buy. Look what happen to GM and Chrysler. Look at the Torch, Storm and Playbook, all crap. Apple is probably the only company that innovates or creates markets with products. They lead and everyone tries to copy. I had one of those overgrown pager and got rid of my BB 2 years ago. It kept crashing!
        davefm@...
  • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

    I'm with you on the "wait til QNX Superphone", but I'll switch to WebOS first.
    Hope HP isn't going to do the typical corporate thing and pull the plug far too quickly, when sales are initially disappointing. My gut feeling says WebOS is the best system, but I'm queasy about HP making a change in CEO and brass, then focusing on data management, de-emphasising WebOS, or dropping it all together.
    IF that happens, WP7? RIM? iPhone5? Android? Who knows! Maybe I'll just see what Hawkins and Dubinsky are up to.
    dalspartan
    • I don't think they will

      @dalspartan

      HP spent a mint of shareholder dollars on Palm. One of their bigwigs (don't think it was the CEO, but important enough for the video to have made the rounds) went on record stating that they plan on releasing WebOS on everything they sell next year (implicitly except servers). While it's possible that HP might pack it in if no one buys it after six months, I see far too many pissed shareholders, tech sector analysts, and customers if HP doesn't give it at least a few years in the market to see what happens. Also keep in mind that HP doesn't have a real track record of doing that. The Jordana was on the market for several years. They made iPAQ models for nearly a decade, swivel/stylus tablets are still available, and it's still possible to buy a Palm Pre - despite none of these devices causing the same hoopla that the iPhone or iPad did.

      HP is a company that has the resources to sell things to niche markets and keep at it for a few years, even if it doesn't turn itself into a cash cow. It really could go either way, but I don't see them having any desire to embarrass themselves over a single quarter's earnings. If nothing else, they not only have the present track record of the Palm Pre, but they have seen the tepid pickup of Windows Phone 7 devices and realize that it's all but guaranteed to be a long fight to relevance, let alone dominance.

      Joey
      voyager529
  • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

    PS Nokia WP7 sounds like it may be a great combo. Now if Microsoft would only drop the "I'm a cool kid too!" marketing. It's Microsoft, they'll never be "cool".
    dalspartan
  • Message has been deleted.

    xiaojiekgf
  • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

    It would seem analysts and industry watchers - such as Larry and Andrea - are enamored (shareholder alert?) by Apple's growth today - no less than when Nokia and Palm ruled the handheld device some years ago - and hand out predictions (to justify their salary?) on the death of one platform or the other. Still, I believe, brands aside, this sort of competition is beneficial to both the consumer and enterprise.
    HumZ
  • Stats prove what you like....

    The basis of this article is so biased it's a blatant piece of propaganda. I reckon it's high time 'journalists' were taken to account for such rubbish. ALL companies go through periods of reconcilliation; Apple were almost bust 10 years or more ago; Motorola phones almost dragged them down but they are back. RIM started from next to nothing about 8 years ago with an astounding enterprse product. Todate... NOTHING can touch the BES model for integrity and security.

    Personally I'm on BB Torch OS6 and YES it is superb, and YES it is the way forward. YES I have an ipad and an iphone but dont use the iphone as its indferior for business use. I'm going to start using my ipad as we've got an app back to our virtual world but will replace that with an android once its working. I wany kit that i can drop an sd card into, with a film on it etc.

    Instead of Apple grabbing real enterprise share through solid products we get articles like this spouting rubbish, and trying to get folk to use secure apps as a workaround for enterprise use. Complete crap! Way too many password inputs in the versions I've seen. Get real.... these are great consumer toys but highly restricted through itunes tethering. The sooner you guys mention that a bit more, the sooner we'll get a level playing field. Not likely though is it!
    johnmckay
    • RE: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

      @GetReal-mac.com

      Nice !. I agree completely
      Loggies