RIM Announcest Q1 loss and Delay of BB10 Launch
If there were any faith in RIM’s turnaround efforts today’s announcements had to drain all of that. Given RIM’s strong corporate underpinnings and international customer base growth there was always the sentiment that new, exciting hardware could give RIM the ammo it needs to fight off Windows Phone for 3rd place in the smartphone arena and take some ground back from Apple’s iPhone and Google’s Android. For years all the delays and miscalculations were laid squarely at the feet of former co-CEOs Balsaille and Lazaridis. Today’s announcements however paint the picture of a company who’s entire culture is crumbling at the seams.
The loss and shrinking of RIM’s revenue and market share was expected but the delay of the first BB10 devices until Q1 of 2013 is a death nail. Faced with Android and iOS improving on already leading mobile OSes and Microsoft’s Windows Phone 8 looking like an attractive corporate option RIM could not afford any mishaps or delays.
To be clear, I expect the pretty much all of RIM’s market share in the corporate sector to be gone by the time the first BB10 devices ship. Thorstein Heins might put on a brave face but its my best guess that the days of RIM as we know it is over and now the main question is how valuable assets like BlackBerry Messaging and Mobile Fusion is in today’s BYOD world. Keep in mind Microsoft’s InTune manages cross platform devices in the corporate environment and is getting a strong push by Microsoft.
So who benefits most from this latest turn of events: Apple, Android or Windows Phone 8?
Significance of Email in the communications spectrum is losing and the texting world, Social network are taking over the higher order. I am not saying email would be fading away the world like its predecessors like Teletext, telegraph, fascimile and so on, and they are still used, but they are not primary. Instead of Fax, people use scan and attach the same as email currently. Likewise for simple email, people are either txting, tweeting or sending as a message using messengers. RIM’s primary is in business communications using its tools such as BBM, BES enabled email. BBM is still used by many enterprises, but the BES enabled email is losing grounds. Unless RIM gets another venue of communications as primary to make their customers intact, they would lose some more potential clients swinging towards either iOS or Windows Phone 8. RIM has choices still, they could defect BB like Nokia did with Symbian or push more choices of devices like Samsung is doing with different platforms.
RIM actually announced on the conference call right now that they are going to focus on getting older BlackBerry customers to upgrade to BlackBerry 7 devices in the meantime. That is going to be a failed strategy and shows how they are grasping at straws. This is what Microsoft went through with Windows Mobile.
Their sales are going to get worse with each quarter throughout the year. They are getting pressured to lower or eliminate certain services fees and the pressure from all sides is just too much at this point. RIM got too used to operating with certain margins. It would be the same if Apple had to start competing on price and margins were cut.