Does RIM have a future with you?
RIM has had a strong hold of the business market for some time now. In the recent years a surge has been made to push BlackBerry into the consumers way of life. Most would agree that email on the BlackBerry platform remains to be the standard by which all other platforms live up to. The fact is consumers, as well as business users, want more when using smartphones than just push email. Does “is there an app for that” ring a bell?
The new comers to the smartphone world including iOS (iPhone), Android, and even WebOS changed the perception of what a smartphone should look like in most users eyes. Suddenly having a small 480×360 resolution screen with a full qwerty didn’t seem so appealing anymore. When faced with the decision to purchase a personal phone would you choose based on needs or based on what you want?
In the case of RIM I have been noticing a trend of users moving away to more modern devices. When asked why the typical answer is “look at the application selection on this platform”. To me RIM is like a Ducati motorcycle, the colors change and minor fixes are introduced but the general product remains the same. Does RIM have enough dedicated users to remain a contender? In my opinion without a doubt. Your tale may vary.
What are you thoughts? The gates are open
An article by Dan Frommer on Business Insider prompted me to write this post. In its piece, Dan argues that RIM is the next Palm, pointing out similarities between the two companies. Palm used to sell tons of Treo devices just like RIM does today, but it failed eventually (and was acquired by HP). The big difference between the two is that in addition to devices, RIM is also focused on services and has been acquiring companies left and right to further strengthen its position. However, tough times are ahead of RIM…
First, it’s important to note that RIM doesn’t own patents for GSM or CDMA communications and has to buy those licences for each product it ships. Major handset makers (Nokia, Samsung, Motorola, Sony Ericsson) do have those patents or at least take advantage of cross-licensing agreements; whereas some other companies like Apple and HTC don’t [own licences]. These two, however, are known for their high-end and mid-range devices (HTC) which bear higher margins (and higher profits).
Second, analysts (and myself) believe BlackBerry devices are slated for the mid-range of the market and that could disrupt RIM’s earning potential. We did hear some rumors about the BlackBerry tablet (which could be a higher-end product), but at the moment it’s unclear who would want such a device — though we still have to see it in action. Moreover, BlackBerry Torch isn’t selling like crazy…
And, third – increased competition, not only from the iPhone but from an array of Android handset makers.
So what should RIM do to save its ass? Switching to Android is one of the options, and that’s probably their best bet. On the other hand, they invested tons of cash in their own platform, so I doubt that will happen… at least not that fast.
