RIP, RIM: The death spiral is underway(itworld.com)
itworld.com
RIP, RIM: The death spiral is underway
http://www.itworld.com/mobile-wireless/160601/rip-rim
41 comments
Probably the bump from Verizon sales. It looks like the demand has cooled for Verizon iPhones so the numbers might not be so impressive next quarter, unless there is an exodus from RIM because of reporting like this.
iCrack doesn't have the same feel as Crackberry though...
iCrack doesn't have the same feel as Crackberry though...
No doubt verizon sales gave apple a bump, but:
This morning, before the opening Bell, Verizon released first quarter earnings results, finally disclosing iPhone 4 activations -- 2.2 million since the device's February 11 launch. [...] During calendar Q1 2011, AT&T and Verizon activations -- 5.8 million -- accounted for 37 percent of the 18.647 million iPhones sold by Apple, that's up from 30 percent a year earlier.
So verizon activations accounted for 2.2M out of 18.6M iphone activations or ~12%. You'd need to dilute that more for ipads and ipods, presumably leaving you with less than 10% of the sales volume. Impressive, but not nearly enough to explain a 50% jump.
http://www.betanews.com/joewilcox/article/ATT-and-Verizon-iP...
This morning, before the opening Bell, Verizon released first quarter earnings results, finally disclosing iPhone 4 activations -- 2.2 million since the device's February 11 launch. [...] During calendar Q1 2011, AT&T and Verizon activations -- 5.8 million -- accounted for 37 percent of the 18.647 million iPhones sold by Apple, that's up from 30 percent a year earlier.
So verizon activations accounted for 2.2M out of 18.6M iphone activations or ~12%. You'd need to dilute that more for ipads and ipods, presumably leaving you with less than 10% of the sales volume. Impressive, but not nearly enough to explain a 50% jump.
http://www.betanews.com/joewilcox/article/ATT-and-Verizon-iP...
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RIM can absolutely, easily pull this out. Probably a few different ways, actually.
They make great hardware, and still have a vastly superior keyboard experience to any softkey phone anywhere. They have buckets of cash, and had great, really great earnings last year.
They have an ecosystem problem. This would be simple to remedy -- they just need to commit to HTML5 for apps, maybe adopt jquery mobile as a significantly-supported project.
Staff a small, awesome webkit team, and start making it dead simple to deploy to Blackberry. Start a webstore to compete with Chrome's webstore, but this one lets you take it with you on your Blackberry.
Second internal team would be dalvik support, adopting the android ecosystem. RIM never really made a ton of money on the 'app' ecosystem; this would put them on equal footing when being evaluated against Android.
I'll await my offer from the RIM strategy folks. : )
They make great hardware, and still have a vastly superior keyboard experience to any softkey phone anywhere. They have buckets of cash, and had great, really great earnings last year.
They have an ecosystem problem. This would be simple to remedy -- they just need to commit to HTML5 for apps, maybe adopt jquery mobile as a significantly-supported project.
Staff a small, awesome webkit team, and start making it dead simple to deploy to Blackberry. Start a webstore to compete with Chrome's webstore, but this one lets you take it with you on your Blackberry.
Second internal team would be dalvik support, adopting the android ecosystem. RIM never really made a ton of money on the 'app' ecosystem; this would put them on equal footing when being evaluated against Android.
I'll await my offer from the RIM strategy folks. : )
I think you're brushing off sales & marketing too easily. RIM's problem isn't that they just don't have compelling hardware/software, it's a market perception now, too. Fine, say tomorrow they come out with the "iPad-killer" - how do they convince people of this? What about all these people who have invested in the i-ecosystem (Pads, Pods, Macs etc.), why would they switch? And how do you win the hearts of devs who can build HTML5 apps + jQuery mobile for the already existing platforms? RIM has so many chicken-and-egg problems.
They snooze, they lose (lost?).
They snooze, they lose (lost?).
I'd say it's a matter of approaching strengths and weaknesses aggressively, a-la Nokia.
RIM Strengths: keyboard, corporate relationships, extremely happy users, historic hardware excellence
Weaknesses: shitty UI, no app ecosystem
Motorola was in this situation but with fewer strengths two years ago. Do you really think that RIM would not benefit from being able to say:
"As always, the best keyboard in the business. Now, with access to Amazon App Marketplace / Android Marketplace!"
To my mind it's entirely possible that RIM could bankroll itself through this cycle with their current cash, but if they want to compete, aggressively, they should probably adopt the android ecosystem as a compatibility layer.
An android phone that works excellently with Blackberry Server and has a blackberry keyboard would be EXTREMELY appealing to a broad range of corporate buyers, and many power-users as well.
RIM Strengths: keyboard, corporate relationships, extremely happy users, historic hardware excellence
Weaknesses: shitty UI, no app ecosystem
Motorola was in this situation but with fewer strengths two years ago. Do you really think that RIM would not benefit from being able to say:
"As always, the best keyboard in the business. Now, with access to Amazon App Marketplace / Android Marketplace!"
To my mind it's entirely possible that RIM could bankroll itself through this cycle with their current cash, but if they want to compete, aggressively, they should probably adopt the android ecosystem as a compatibility layer.
An android phone that works excellently with Blackberry Server and has a blackberry keyboard would be EXTREMELY appealing to a broad range of corporate buyers, and many power-users as well.
Add "Godawful developer ecosystem" to that list of weaknesses.
JQuery was barely supported at all until the latest OS release, which isn't being backported to the vast majority of their recent hardware. Because developers are stuck catering to the lowest common denominator (and because the upgrade cycle is a lot slower in the corporate world), any improvements are going to be moot for quite some time before most users can see any benefit (or before developers are willing to invest time developing apps for BB OS 6).
The pre-webkit browser's specifications were written to behave similarly to IE6, but somehow managed to even fail at that. It's a browser that's barely even compatible with itself. Simply put, you cannot develop JS-based webapps for it.
Developing a web-based BB app is also a weird and bewildering experience. Development needs to be done entirely within Eclipse, documentation is sparse/awful, and the entire development process is never laid out clearly anywhere. The code signing requirements are particularly onerous. The simulators are handy, because of the many device-specific peculiarities, but never seem to actually work properly themselves.
RIM have dug themselves into a hole; they are faced with either continuing to support their current (awful) platform, or completely alienating their existing installed base. RIM really has no good options at this point, and a bit of a chicken/egg situation. No good apps until everyone has a phone supporting the "new" platform (whatever that is/will be), but nobody will buy phones on the new platform because there are no apps for it.
JQuery was barely supported at all until the latest OS release, which isn't being backported to the vast majority of their recent hardware. Because developers are stuck catering to the lowest common denominator (and because the upgrade cycle is a lot slower in the corporate world), any improvements are going to be moot for quite some time before most users can see any benefit (or before developers are willing to invest time developing apps for BB OS 6).
The pre-webkit browser's specifications were written to behave similarly to IE6, but somehow managed to even fail at that. It's a browser that's barely even compatible with itself. Simply put, you cannot develop JS-based webapps for it.
Developing a web-based BB app is also a weird and bewildering experience. Development needs to be done entirely within Eclipse, documentation is sparse/awful, and the entire development process is never laid out clearly anywhere. The code signing requirements are particularly onerous. The simulators are handy, because of the many device-specific peculiarities, but never seem to actually work properly themselves.
RIM have dug themselves into a hole; they are faced with either continuing to support their current (awful) platform, or completely alienating their existing installed base. RIM really has no good options at this point, and a bit of a chicken/egg situation. No good apps until everyone has a phone supporting the "new" platform (whatever that is/will be), but nobody will buy phones on the new platform because there are no apps for it.
Yep, my point.
They need someone to cut the Gordian Knot and make a clean breast of things. Who was Elop's counterpart over at Google??
They need someone to cut the Gordian Knot and make a clean breast of things. Who was Elop's counterpart over at Google??
They practically have a stranglehold on the corporate market in a lot of places...most of these people would rather stay with what they have if it comparable feature wise.
As for developers....if the development environment is good, they will come to RIM for the money. Big corporations wouldn't think twice about paying $100 to $500 for certain apps for a large chunk of employees.
As for developers....if the development environment is good, they will come to RIM for the money. Big corporations wouldn't think twice about paying $100 to $500 for certain apps for a large chunk of employees.
Yep. At this point, something as good as the iPad isn't even close to being enough.
RIM has been releasing products with terrible software and usability bugs for a while. My torch would regularly report java.lang.NullPointerExceptions when receiving SMS's.
Playbook apps have lots of glitches.. crash for no reason. Users are also getting 0.5 gig software updates every couple of days that brick the device for 30 - 60 mins.
This all indicates poorly managed software teams that are under too much schedule pressure to produce reliable results. Also indicates a broken QA process where RIM thinks it's fine to ship kit that doesn't work properly.
I call deep cultural problems that can't be fixed without leadership changes.
Playbook apps have lots of glitches.. crash for no reason. Users are also getting 0.5 gig software updates every couple of days that brick the device for 30 - 60 mins.
This all indicates poorly managed software teams that are under too much schedule pressure to produce reliable results. Also indicates a broken QA process where RIM thinks it's fine to ship kit that doesn't work properly.
I call deep cultural problems that can't be fixed without leadership changes.
that brick the device for 30 - 60 mins
You should really reconsider how you use that term.
You should really reconsider how you use that term.
I'd agree that they're still possibility of pulling it out.
The question is not can they, but will they.
The question is not can they, but will they.
6 months to a year ago, a lot of people didn't believed me when I said RIM was irrelevant. It was quite obvious when the iPhone came out that RIM was going to need to make some big changes.
The only person I actually heard praise the BB UI was somebody who had gotten a smartphone for the first time. Then he used my iPhone...
The only people I know still buying BB's are old and/or adverse to change. That's about the market segment they have left.
The only person I actually heard praise the BB UI was somebody who had gotten a smartphone for the first time. Then he used my iPhone...
The only people I know still buying BB's are old and/or adverse to change. That's about the market segment they have left.
Interesting observation, because in cities I've observed (Ottawa and Toronto) the type of people using BBs are the opposite of the ones you've seen.
Among young people I see around town, on the bus/train, etc., almost all of them have BBs. This is particularly true for young women. I'm not sure exactly why this is the case, but it seems that most of them prefer BBM over SMS.
Among young people I see around town, on the bus/train, etc., almost all of them have BBs. This is particularly true for young women. I'm not sure exactly why this is the case, but it seems that most of them prefer BBM over SMS.
It's mainly because BBM is a non-threatening way to give out your contact information. You can add a guy to your BBM list, chat with him and then if you find out he's a crazy you can block him. The person can't constantly txt you or call you back like with your cell phone number. It's brilliant for us ladies. :)
Interesting. Seems like a big opportunity for a mobile carrier to push how easy it is to block numbers on their service.
Maybe it is because you are in Ottawa/Toronto? I really don't have any stats as to RIMs market in these areas but every time my BlackBerry loving friends make the point that they see people using it everywhere I always make the point that we live in Ottawa and that likely has a lot to do with it. I would venture to guess geography plays a big part in this. Still, BBM is a better experience then SMS.
I own an iPad and love it, but I'd never want that interface on my phone - and hate using the iPhone. Blackberry UI certainly could be improved, but it's all small things that they should have thought of, overall I love using it and wouldn't consider swapping.
In my experience, an iPhone takes 2-4 weeks to get used to.
I find writing anything more than a single sentence on an iPhone is an exercise in frustration, even after 3+ years with various iOS devices.
The iPhone onscreen keyboard is nearly perfect; the software isn't, and the autocorrection is asinine, inconsistent, and unpredictable.
As a email and messaging device, the Blackberry is still the best thing out there by a long shot. And since I own and use a number of iOS devices anyway, there's absolutely no reason for me to give up the Blackberry and its specific strengths.
The iPhone onscreen keyboard is nearly perfect; the software isn't, and the autocorrection is asinine, inconsistent, and unpredictable.
As a email and messaging device, the Blackberry is still the best thing out there by a long shot. And since I own and use a number of iOS devices anyway, there's absolutely no reason for me to give up the Blackberry and its specific strengths.
Actually, everyone I know who has a blackberry is young. The reasons are varied - one of the big reasons is that most of the cell companies offer plans where facebook, twitter, and BBM do not count against your data plan or you don't actually need a data plan to use these services. Again, the same companies often charge for txt messages but not for BBM.
I would guess I am the "old" guy you mention buying the Blackberry. I own a Blackberry Bold and I love it. It does only a few things and it does them really well for me. And I really like the feel of the keypad while typing --- I do a lot of that.
Stock price has taken a dive, http://uk.finance.yahoo.com/echarts?s=RIM.TO
Currently down more than 13% on yesterday's closing price, at 46.49 - to put that into perspective, September 13th last year saw a low point of 45.40, which is the lowest close since November 6th 2006 (45.33). By February 18th this year it had got back to a ~9 month high of 68.92. The all-time high for RIM was 149.90 in June 2008, but the price reached that level then dropped back down all in the space of a few months.
TLDR of the above paragraph - last September the price of RIM stocks dropped almost as low as it was in 2006 before it really started growing, and now there is a possibility it will do so again.
Side note: this submission is to an editorialised piece (which in my opinion is pretty badly written), would prefer it be straight to the source: http://press.rim.com/release.jsp?id=5015
Currently down more than 13% on yesterday's closing price, at 46.49 - to put that into perspective, September 13th last year saw a low point of 45.40, which is the lowest close since November 6th 2006 (45.33). By February 18th this year it had got back to a ~9 month high of 68.92. The all-time high for RIM was 149.90 in June 2008, but the price reached that level then dropped back down all in the space of a few months.
TLDR of the above paragraph - last September the price of RIM stocks dropped almost as low as it was in 2006 before it really started growing, and now there is a possibility it will do so again.
Side note: this submission is to an editorialised piece (which in my opinion is pretty badly written), would prefer it be straight to the source: http://press.rim.com/release.jsp?id=5015
The "source" you linked to only contributes to a small portion of this article. The RIM press release doesn't make any mention of how RIM's competitors are doing.
RIM needs to become a services company and focus on what they did best - enterprise class connectivity on the go. Take your set of tools and apps across devices - and email is just one of the many things they can offer. IT Depts dont really want to choose the phone people carry but have to standardize. The Apple and Android divide will only get more polarized, if Windows Phone does well, all the more better - imagine one set of RIM tools integrating with every device in your company to offer secure email, security + wipe clean, documents, BBM, social features, etc. For that though, RIM will have to become a software company. And they suck at that. The opportunity is big enough to support a $30Bn company, for sure.
Oh and they should forget about consumers. That whole thing was just dumb.
Oh and they should forget about consumers. That whole thing was just dumb.
It's much easier to sell mediocrity in B2B. There's no need to have truly great products, a truly great salesforce is good enough.
So yes, that whole thing about consumers is ill-advised. Especially when there's someone out there that's already figured out how to build truly great products.
So yes, that whole thing about consumers is ill-advised. Especially when there's someone out there that's already figured out how to build truly great products.
"Oh and they should forget about consumers. That whole thing was just dumb."
So true, and seeing them advertise to facebook users and the like drives me mad - I'm a single consumer from their point of view (my phone isn't picked or paid for by my company), but I chose Blackberry a long time ago for business reasons, and every time I see them trying to sell to 14 year olds I ask myself why they aren't spending more time making great phones for people like me.
So true, and seeing them advertise to facebook users and the like drives me mad - I'm a single consumer from their point of view (my phone isn't picked or paid for by my company), but I chose Blackberry a long time ago for business reasons, and every time I see them trying to sell to 14 year olds I ask myself why they aren't spending more time making great phones for people like me.
Reading this made me think of these posts:
http://news.ycombinator.com/item?id=1996237
http://news.ycombinator.com/item?id=2043613
http://news.ycombinator.com/item?id=1996237
http://news.ycombinator.com/item?id=2043613
I think the whole idea of competing with Apple or Palm was kind of foolish. I think they had consumer number envy. It was amazing to watch them take their successful, refined form factor and try to build an iPhone-clone in the Storm. Now we see them take QNX (good) and try to have a bunch of different ways to develop for it (Air, Android compatible, etc).
I really think they should have invested in an enterprise friendly development environment (more JVM use), update the UI (remembering to leverage the keyboard), and build appliances that were plug and play in enterprise data centers. If they wanted to get radical, build a netbook that had a great keyboard, 3G, and ran Blackberry apps.
I really think they should have invested in an enterprise friendly development environment (more JVM use), update the UI (remembering to leverage the keyboard), and build appliances that were plug and play in enterprise data centers. If they wanted to get radical, build a netbook that had a great keyboard, 3G, and ran Blackberry apps.
This makes me wonder how WebOS is faring at HP. They need to come up with some sort of niche killer app and secure a stable foothold for themselves. I'm surprised that RIM is dying so quickly; I thought their foothold was with jet-setting business and politico types.
I've been told that RIM could improve their odds by making their corporate install system better, and that awkward aspects of this count against Blackberry adoption at the moment. Does anyone here have more knowledge about this?
It's more likely that RIM will switch to Android rather than selling to someone else.
Death spiral you say?
http://chart.apis.google.com/chart?cht=bvg&chs=323x200&#...
http://chart.apis.google.com/chart?cht=bvg&chs=323x200&#...
RUN FOR THE HILLS!
On a more serious note, they're going through a tough period, but I expect them to make it through. They are transitioning to a whole new OS, which is too new and rough (I played with a playbook a bit) to carry their product line, while their old OS is not good enough. The good news is that their strong performance until now gives them enough slack to make the transition.
By Holiday Season 2012, they should have both tablets and phones all transitioned to a polished version of QNX, which should allow them to be competitive. The smartphone market is also growing very rapidly, so if they manage to hold onto 2nd or 3rd place with ~15% share, that still means tens of millions, if not hundreds of millions of devices sold per year.
All depends on execution however.
On a more serious note, they're going through a tough period, but I expect them to make it through. They are transitioning to a whole new OS, which is too new and rough (I played with a playbook a bit) to carry their product line, while their old OS is not good enough. The good news is that their strong performance until now gives them enough slack to make the transition.
By Holiday Season 2012, they should have both tablets and phones all transitioned to a polished version of QNX, which should allow them to be competitive. The smartphone market is also growing very rapidly, so if they manage to hold onto 2nd or 3rd place with ~15% share, that still means tens of millions, if not hundreds of millions of devices sold per year.
All depends on execution however.
When you write "They are transitioning to a whole new OS" I assume you mean "They are transitioning to a different OS" because the different OS is QNX and it has been around for decades (so it's not a "new OS").
He's likely referring to a new shell on top.
that's not why everyone's worried
http://ycharts.com/companies/RIMM/revenue_growth
http://ycharts.com/companies/RIMM/revenue_growth
It's not a good sign when investors are waiting for news of a sale and instead they hear about low earnings and loss of market share.
A worse than expected quarter and their product is no longer top dog? I'd hardly call that a death spiral. A march to mediocrity, maybe, if they don't start producing products with wider appeal.
In all the IT World articles I've seen over the last week or so, they seem to make over-the-top statements and exaggerate about everything. Not so much in this particular article, but it seems like they don't have a very good understanding of the technology they're covering.
In all the IT World articles I've seen over the last week or so, they seem to make over-the-top statements and exaggerate about everything. Not so much in this particular article, but it seems like they don't have a very good understanding of the technology they're covering.
[...]
Apple's iOS, 28% (up from 19% [in Q4 2010])
Wait, what? I had to clip that quote together a bit, but it certainly seems to be what they're trying to say. Even given we're not too clear on what "mobile OS numbers" actually means, it's hard to believe that any meaningful metric has Apple's mobile platform growing from 19% to 28% between 4Q10 and 1Q11. That's essentially a 50% increase quarter over quarter?
I can't tell if they just have a massive typo somewhere in there, but if they actually think that's accurate it seriously calls into question their numbers and conclusions about RIM.