rimming out


When everyone else was converting to iPhones and early generation Android phones a few years ago, I did the counter-intuitive thing and jumped into BlackBerry. Going against flow is nothing new for me, if for no other reason than I have no trust or faith whatsoever in what everyone else is doing. And it’s been an overwhelmingly positive user experience: call quality was excellent, battery life decent, I really have no use for apps outside of practical ones–I have yet to play a single round of Angry Birds–and as a communications device, I’ve been quite pleased with both Berries I have owned: the ancient Curve I acquired from a company in Kansas which was switching to iPhones and the Bold 9650 I’ve had for almost two years. I suppose you could call me a fanboy, but the truth is I’ve been satisfied with their products and as a thrifty consumer, satisfaction matters.

Now, to be clear, I’m not an uncritical fanboy. The firmware and OS are held back by the hardware. Load times, especially after reboots, are sometimes bordering on interminable. BB hardware interaction with my laptop sometimes is a nightmare. And I get very frustrated with the regular delays. I was an early adopter of the PlayBook tablet, a solid device with a half-baked OS. It itself was delayed, while a decent version of the OS didn’t come out until this past spring. (And it’s excellent, but I’m still waiting for the Bluetooth keyboard to come available in the States; utilizing it to its maximum portability is nearly impossible without the ability to type on a tactile keyboard. I’d also love to [shamelessly] say that BlackBerry powers this blog.) And within nine months, it was available for almost a third what I paid for it.

The point here isn’t to be a mobile tech nerd: I’m not one, at least not one adequately-enough informed about the inner-workings to speak with any semblance of authority or credibility, and the mobile nerddom has already spoken loudly and clearly about BlackBerry and its parent, Research in Motion. RIM has been ineffectual to say the least in addressing its position in the mobile sector in the face of competition. The one-time kings of mobile technology not only lost their market share, but are facing a grim future. Though unlike other failed tech firms like Palm or Nortel, they have no debt, they have presided over a loss of nearly 75% per share over the past year, long term investments dwindling according to financial reports over the past three quarters and their cash reserves have begun to burn (though there is reportedly around $2B remaining in the war chest.)

And RIM isn’t the only tech company to have faced hard times. One with enough of a memory can remember the days when a certain firm by the name of Apple was taking on water, and look at them now, idols of Silicon Valley and Wall Street.

But when a company has lost its mojo and competitive edge and begins to clearly play catch-up, as it did with the lackluster Style handset, the aforementioned PlayBook and its 7 line–puzzlingly introduced around the same time everyone was anticipating a new, QNX-based handset to power play with the QNX-based PlayBook, thus punching itself in its pregnant torso–and the market has, for better or worse, moved on to an Apple and Android-based world, what can we expect but impending doom?

We were optimistic when the biumvirate of Lazaridis and Balsillie resigned their positions as CEOs, and replaced with Thorsten Heins. BB10, the new generation of handsets, was coming into view, though it was already delayed from early this year to late this year. Considerable buzz was beginning to surrounding BlackBerry for the first time in years. PlayBook 2.0 came out on time, which was a breath of fresh air for people used to being dunked by their mobile company of choice too many times. We were hopeful and excited. I’ve been sitting on a full upgrade for several months from my mobile provider for quite some time, hoping to pull the trigger this fall, when BB10 was [re-]scheduled to be released.

Then last week happened.

All the goodwill and good momentum generated over the past three months sucked up by a brutal quarterly earnings report, post-scripted with the stunning announcement that 10 was being pushed back to the first calendar quarter of next year. It’s like getting punched in the stomach, then getting kicked squarely in the nards while hunched over for someone who had been a satisfied customer, even though I took a bath on the PlayBook and remain loyal to the company.

Or, remain(ed) loyal. My loyalties are officially up in the air.

I don’t see how RIM can survive this, at least in its present form. The two biggest seasons for cell phone service providers and manufacturers are Back to School (kicking off next Thursday) and Christmas. While not spectacular reimaginations for either, Apple and Android are pushing out new versions of their OSs this fall, while Microsoft is unleashing Windows Phone and has a balance sheet, corporate wherewithal (and the demonstrated patience, see Xbox) to wait until its project succeeds. RIM has been hemorrhaging market share and let’s face it: even with BB10 released between January and March–with the peanut gallery already sneering again about added delays and even beginning to whisper damning pejoratives ‘vaporware’, though this writer doubts it will get that bad that soon–who has any money after the holidays?! Not only will they have lost out on the renewing crowd in the forthcoming months, but they’ll have limited their own product’s exposure to the end user like myself who just wants a different product that does what it does well for good value.

This is like the Borders situation, but in reverse: when the erstwhile bookstore screwed themselves over, they went all-in with a disastrous Borders Rewards Plus paid program to try in vain to drum up cash (and, for the record, I was dead-on in my assessment of that situation before it happened.)  RIM seems content to ride its cash balance until next year, which comes off to me as desperate and short-sighted, especially with the evaporation of long-term investments. In essence, they’re hoping for a home run from a singles hitter, a Duke Snider-esque shot from Pee Wee Reese.

I understand the concern about not having a product that’s not ready for prime time–easily justifiable after the PlayBook fiasco–but in order to survive, unless you’re convenient fascists like the American auto industry or the banks and are well-connected enough politically to be considered too big to fail–but in business, you must have a product people want and people to buy said product. I believe they will have the product, but they probably won’t have the people to buy. Apple could pull off a stunt like this because they’re the buzz and distance only makes the heart grow fonder for the smitten.

Going two years between iPhones wouldn’t be disastrous, it would be foreplay. Going two years between BlackBerries isn’t foreplay, it’s erectile dysfunction.

Like Borders before this, I hate to write this about RIM. As I said, I’m a consumer pleased with my products from RIM, and I don’t ask for much from a company but to deliver quality products and appear to be somewhat coherent and competent, and I’m not seeing that. At all. If you deliver quality with value, you will have my business and I will gladly pimp myself out for your cause. (Which is precisely why I haven’t pulled the trigger on my renewal bonus, because your current phones are too pricy for the state you’re in. Right now, everything must go, RIM. Fire sale that crap.) I, like many others out here, just don’t see how your strategy makes a whole lot of sense at this point. Temporarily resigning the Americas for your growing international sector is working in terms of user numbers, but not for the bottom line, nor is it reassuring investors, as the bloodbath continues on the ticker.

I’m certain RIM, or at least components of RIM, will survive. QNX is essential behind the scenes throughout many sectors of international business, and it was the smartest acquisition the company made. The developer collective TAT/RIM Sweden could easily be repurposed outside RIM as it was before they were adopted. I’m just not sure about the future of the centerpiece, and what kind of company is RIM without BlackBerry? I’m not sure it’s much of one at all. And in a mobile market which is, to be honest, pretty stale at the moment, BlackBerry and WP could really shake things up and force the duopolists to do what RIM should have done, continue to innovate and push themselves forward. The business flourishes and the market benefits from aggressive and innovative companies.

I do not doubt RIM’s earnestness in BB10, but the window for maximum impact is this fall, not next year. For all intents and purposes, and with all due respect, there is no next year.

After all, I have a renewal to use.

UPDATE: RIM came back with strong numbers after their third quarter, including a shocking increase of cash on hand by $100M. They’re poised to exit intact, though I still have personal and strategic frustrations with their desire to debut BB10 in the first quarter of 2013. At the same time, there is a rationale that, as the only game in town during that post-holiday lull, retailers and salespeople have the chance to be exclusively well-versed in a brand-new OS (not really brand new, but for the phone, it certainly is.) So, we know BB10 isn’t vaporware, we just need it to come out.

What a difference three months makes. This summer, they looked like toast. Smart management, a genuine buzz for the new era and sincere investment in to the developer world have resulted in what appears to be legitimate, sincere excitement for next year. The biggest advantage the Waterloo crowd has is what Palm and the aforementioned Borders don’t: being in the black. Both of the latter were drowning in red ink before they were respectively assimilated and liquidated.

So, all that to say I was wrong. I’m cautiously optimistic, and I remain as critically realistic as possible: a long road remains for RIM to re-enter mobile relevance. Things are definitely poised to head for better days, though.

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