Tuesday, June 22, 2021

How Amazon’s Fire could burn RIM

Waterloo, Ont.-based Research in Motion just can’t catch a break.
On Sept. 15, Brand Finance Ltd. pegged the company’s brand value at $3.3 billion, down 24 per cent from January’s $4.36 billion. (Brand Finance is a London-based worldwide firm that specializes in the evaluation of intangible assets.)
Later that day, RIM reported disappointing second-quarter results, with net earnings dropping 58 per cent to US$329 million for the three-month period ending on Aug. 31. Revenues dropped by 15 per cent to 4.2 billion. Comparatively, the company made a profit for $797 million on revenue of $4.62 billion in the same quarter of last year. Shares fell sharply, with the stock losing 20 per cent of its value.
A further blow with the launch of Amazon Inc.’s Fire tablet to what is looking like a considerable critical love-in, with its comparatively low price and positioning as the most credible threat to Apple’s consumer dominance in the tablet market.
More and seriously differentiated competition on the consumer front is the last thing RIM can afford, partly because of the share it could lose, and partly because it points up why RIM is having trouble wooing the consumer market: it doesn’t have the supporting ecosystem of content that Amazon and Apple have.
Despite the fact that I’ve always believed the dysfunction at RIM is overblown, now is the time for a decisive move in the C-suite. Regardless of whether the problem is more the perception than the technology, co-CEOs Mike Laziridis and Jim Balsillie haven’t been able to change that perception. Shareholders aren’t going to tolerate it much longer, and will vote with their feet.
The new, QNX-based operating system has to come soon, and RIM can’t afford it not to be a compellingly different user experience. The new BlackBerrys have to be revolutionary, like the earliest RIM products that changed the face of the mobile enterprise (hell, it practically created the mobile enterprise). RIM has to woo developers from iOS and Android, a tall order.
But the question remains: Does RIM build or buy that supporting content ecosystem, the context it’s missing on the consumer side now? Or does it check its bets on the consumer front, satisfied with being merely a popular smart phone manufacturer for the masses, and refocus its business on the market it can dominate, the enterprise?
The company’s share value makes it queasily close to an easy takeover target, and it would be a shame to see a young, iconic brand like RIM’s relegated to a second thought in some international tech giant’s portfolio.

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Jim Love, Chief Content Officer, IT World Canada
Dave Webb
Dave Webb
Dave Webb is a freelance editor and writer. A veteran journalist of more than 20 years' experience (15 of them in technology), he has held senior editorial positions with a number of technology publications. He was honoured with an Andersen Consulting Award for Excellence in Business Journalism in 2000, and several Canadian Online Publishing Awards as part of the ComputerWorld Canada team.

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