RIM this week announced its next BlackBerry devices, a new version of its handset OS, and several new enterprise solutions. But these were largely overshadowed by the profit warning issued last week, and concern about its ongoing management and direction. As with Nokia, which has also become something of a whipping boy in recent months, RIM will undoubtedly have discovered that it does not take long to fall from favour.
Not that long ago, RIM was reporting stellar quarter after stellar quarter, to the point where over delivery became the norm and with its strong performance not necessarily receiving the recognition it rightfully deserved. But once its performance was on the slide, the critics were quick to move in, with the press surrounding RIM in recent weeks being almost unreservedly negative.
To some extent, the companys prolonged success undoubtedly came as a surprise to many observers, when it looked as if it would only be able to serve a select band of enterprise customers, primarily in developed markets lucrative, but potentially market-share limiting. In contrast, the company successfully grew BlackBerry internationally, across a mix of developed and emerging markets, with consumer-friendly features widening the appeal beyond those whose company had installed a costly BlackBerry Enterprise Server.
Certainly RIM has also been able to generate traction in some interesting niches. In some markets, the BlackBerry has become the tool of choice for teenagers, aided by the BlackBerry Messenger service. And RIM has also been able to generate interest in BlackBerry on a prepaid basis, opening the potential subscriber base further.
But clearly this alone is no longer enough: RIM is a company that is struggling to generate growth in new markets, while facing increasingly tough competition in its established strongholds.
The company has suffered to a large degree through the democratisation of corporate IT. When mobile email was a novelty preserved for the management elite, it was easier for the IT department to control the device purchase chain. But this changed as mobile data services became common in the mass market and as consumers gained access to more and more capable smartphones at a reasonable price. A raft of devices emerged supporting Microsofts Exchange ActiveSync, enabling connectivity to corporate systems without the need for an additional mobile server, opening the floodgates for consumer-oriented devices to enter the workplace.
In some ways, the BlackBerry device management solution announced by the company this week represents the company facing up to the fact that it no longer has the stranglehold on the enterprise that it once did. With staff coming into the workplace equipped with their own smartphones and tablets, and corporate IT departments no longer slavishly forcing corporate-issued devices on employees, BlackBerry is no longer king of the castle. In which case, attempting to leverage its existing BlackBerry Enterprise Server presence makes a lot of sense.
Whether corporate-issued or otherwise, business still want and, in many industries, need, the ability to manage the data on devices connected to their networks, and in a mixed environment where BlackBerry devices are already likely to be deployed, the ability to do this via a single and familiar interface will be welcomed. But a key problem for RIM is that its position in the corporate value chain is still being eroded as customers embrace alternatives to BlackBerry.
In its latest quarterly results, RIM said that 81 percent of revenue came from devices, with the rest split across services, software and other categories. While selling existing customers some additional device management software will provide a useful uplift, it will not change the fact that RIMs performance is reliant on the appeal of its BlackBerry handsets, and here its star is fading.
Of course, this is not the first time that RIM has looked to embrace its competitors. In 2003, it announced its BlackBerry Connect programme, intended to enable handset vendors to deliver devices which could connect to corporate email systems. This would enable a greater choice of handsets, while establishing RIMs position as a corporate data enabler, and protecting corporate investments in BlackBerry infrastructure.
Had it been a success, this strategy could have led to a very different RIM. By focusing on its position as an enabler, it could have reduced the need to develop and release appealing new devices of its own, allowing it to ride on the coat-tails of the top device makers (at the time of launch, BlackBerry Connect partners included Nokia, Symbian and HTC). However, sluggish adoption of BlackBerry Connect, along with the increased penetration of Exchange ActiveSync among corporates and growth in IMAP/POP3-enabled consumer devices, meant that BlackBerry was no longer the only game in town for mobile email, enterprise or otherwise.
It has been said many times, but the big challenge for RIM remains in manufacturing devices which appeal to consumer buyers as much as its previous generation products appealed to corporate IT departments. By no means will this be easy: it is up against competition from Apple, Samsung, Nokia, HTC, Motorola and Sony Ericsson, to name but a few, each of which has been able to deliver numerous appealing consumer products in the past.
And this is clearly coming as something of a culture shock for RIM. It has built its business by offering steady, incremental upgrades to its core portfolio, with nothing to scare enterprise buyers. It has not been especially quick to add new features, with the company adding Wi-Fi, GPS and 3G support to devices significantly after the same features were available from rivals, while maintaining its core enterprise security and management credentials. But this is not what is needed in the consumer marketplace, especially when rivals are tripping over themselves to bring innovative new features to market.
And while it is still early days, the launch of the BlackBerry PlayBook has been plagued with missteps, indicating that new product innovation is not something that comes naturally to RIM.
The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members.