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Is RIM Dead?

Reports of death can be exaggerated. But in this case…?
April 4, 2012

Is Research in Motion, maker of the iconic BlackBerry, dead–or sick unto death? Some observers are calling it.

Jonathan Geller, founder of Boy Genius Report, is one of them. Indeed, he puts it more starkly than anyone:

“The RIM we know, is dead. The company has 12 to 15 months until it’s either acquired, or broken into pieces and sold for parts. I’m not even sure why the company still plans to launch BlackBerry 10 smartphones at this point.”

How did we get here? I’ve written about how RIM’s new operating system seemed like too little, too late, and about how the company’s new CEO sure had his work cut out for him. This past week, though, when RIM put out its most dismal quarterly report in five years–a loss of $125 million–may be the one we remember as the moment RIM turned the corner and didn’t come back.

Bloomberg’s take is a tad more sanguine: it frames RIM’s predicament as a “risky survival plan.” What course exactly is RIM plotting? Intriguingly, it’s deciding to focus on the demographic that led to its rise to begin with: business users. (This goes hand-in-hand with the new CEO Thorsten Heins’s professed interest in branding: RIM was never going to shake its association with enterprise.) That’ll be tough to do, though, since, as we know, Apple and Android are already making inroads into enterprise.

Heins’s own comments during a conference call with analysts smack of those of a captain just realizing how fast his ship is threatening to sink. When Heins took the helm in January, he said RIM didn’t need to change drastically. Now he’s singing a different tune, per Bloomberg: “The impression I had of RIM at day two of being the CEO is now pretty different from the impression, not the impression, from the facts I know after being 10 weeks the CEO…. It is now very clear to me that substantial change is what RIM needs.”

During that same call, Heins admitted RIM was “late” in recognizing the threat posed by the tendency of employees to bring their own iPhones or Androids into work for business use. RIM is at least doing what it can to make the best of a business world increasingly flooded with iPhones and Droids. Today, RIM released a new version of its server software, Fusion, that would support even rival devices. “Fusion is a recognition that RIM is losing share in enterprise devices to iOS and Android, and that to remain relevant its server solution needs to support those platforms too,” one analyst told the New York Times. “It does show that RIM’s not standing still, and that it’s trying to respond to the trends it sees in the market.”

Another thing that hasn’t helped RIM? That itty-bitty enormous service outage that briefly made paperweights of BlackBerrys throughout the Middle East, Europe, Africa, and the Americas. It wasn’t just a public relations disaster (though it was that, too). It also translated into considerable financial losses: $54 million. Admittedly, that’s less than one estimate that had been floated earlier, $350 million, but it’s hardly chump change.

“BlackBerry cannot succeed if we try to be all things to all people,” Heins has said, and he’s right. The question is, for how much longer can it be much of anything to anyone?

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