As speculation turns to iPhone 5 comes news that Research In Motion (RIM) is dead. Sure, this might sound harsh but the company's move to replace its leadership seems unlikely to bring it back from the brink. Apple [AAPL] has unleashed forces RIM has been unable to match.
[ABOVE: Focusing on end users is key to smartphone popularity.]
Fall of the giant
Whats the news? Company co-CEO's, Mike Lazaridis and Jim Balsillie have stepped down. RIM now has a new CEO, ex-COO, Thorsten Heins. The fightback -- such as it is -- begins with two new model phones scheduled for introduction later this year, hopefully.
These moves reflect declining BlackBerry sales, declining satisfaction levels, decline across the board at the world's once leading smartphone company.
Think back and you'll recall a time when RIM devices seemed to exude rubber-clad cool: if you didn't have a BlackBerry you wanted one, and business users who did possess them loved them so much they'd work in bed with them, creating armies of BlackBerry widows in the process.
Apple made your widows smile
Apple's focus on users meant those BlackBerry widows ended up with their own electronic gadget to use at bedtime, and when their business-focused husbands saw what they were doing, they wanted a little iAction too.
As a result, RIM has been shedding market share in its core enterprise sectors since 2007, while the BYOD movement has generated mass interest in iOS devices in the enterprise.
"There comes a time in the growth of every successful company when the founders recognize the need to pass the baton to new leadership," said company founder and ex-co-CEO, Mike Lazaridis at a press conference announcing the reshuffle.
Growth? For RIM I can't yet see it. I'm not saying its good -- I prefer a future of multiple mobile platforms in competition to one in which we see dominance of a small number of firms, but this isn't what's happening. It's a whitewash really.
Apple has also stolen market share from RIM in the consumer and the enterprise markets. This has been a surgical attack: For example, iMessage could be seen as as Apple's answer to RIM's popular Messaging service.
Battle of the brands
While the word BlackBerry once epitomized the smartphone, the iPhone will eventually become so ubiquitous that it will itself define the market. Just as Harley-Davidson represents the motorbike, iPhone will represent the smartphone. The word BlackBerry now represents nothing more than a historical anachronism in most consumer minds (in my opinion, of course).
It is interesting to note RIM's new chief began at the firm in 2007, when Apple launched the iPhone. That's when company founder Lazaridis said he: "Wasn't impressed with the iPhone and that it wouldn't threaten BlackBerry..." Right.
Blind to the juggernaut, Lazaridis did then concede: "Apple undeniably accelerated the drive to smart phones. It educated the consumer to the benefits of these types of phones."
But where's RIM's growth today?
Market share is shrinking (albeit in an expanding market), share values are plummeting -- down 75 percent; and it has failed to match competitors in the tablet or smartphone space.
"Research In Motion, which once dominated the smartphone market, has been steadily losing market share (down from 7.7% to 4.5% in recent Nielsen survey) to both the iPhone and iPad and the tablet area and the various Android devices," tech analyst Larry Magid told BBC.
Canadian belle seeks eligible suitors
Recent speculation has said RIM may be offering itself for sale to a shady Asian-based suitor. Samsung has denied it has any intentions on the firm, but others, including LG, could derive good benefit from such an acquisition.
Smartphone manufacturers are looking to individualize their products and to break out of the ultra-competitive and fragmented Android ecosystem. A move to purchase RIM would immediately give the Asian purchaser a unique position, an existing user base and a market share hike.
"If Samsung (or any other Android partner) were to integrate RIM's enterprise services like Blackberry Messenger into their offering, they would achieve instant differentiation in the increasingly-monochrome Android space," notes Frost & Sullivan.
RIM also faces future competition from Microsoft. Windows 8 promises one user interface across all its platforms and is already winning some praise.
Well-heeled Redmond has previously shown it will stop at nothing when it comes to seizing a position in a platform war. Microsoft is expected to aggressively target Apple's iPhone as well as to make overtures to Google's existing Android manufacturers. RIM cuts an increasingly weak figure in this evolving space.
What other options exist for the company? Will Microsoft acquire its Canadian neighbor in order to help boost its Windows 8 enterprise offering? After all, right now the enterprise is increasingly becoming Apple's latest sales playground.
Microsoft has a growing relationship with Nokia -- would an additional link up with RIM show the market three losers working together, or would it represent a trio prepared to change and ready to win?
One things for sure, RIM cannot prevail in the smartphone wars without finding itself a little help.
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