I think RIM has potential to be a success again, but currently it's hard to stay optimistic given how bad of a failure the Playbook was and how clueless the current executive leadership seems to be to the seriousness of their plight. I think with fresh, strong leadership and a renewed focus on what they do best, RIM can rebound. But right now it seems like RIM is content to kind of stay on the same path, just jog a little bit faster. That's not going to work.
RIM is still a multi-billion dollar company with a great following in many markets. Corporate IT types still have a lot of loyalty to the company and it has more than 100 telecom service partners globally. It's Blackberry is doing fine in other parts of the world and if the company reboots them on time with newer products it will come out fine. It needs time. I hope it gets it because the fundamental technology is super.
@mfbertozzi - thanks for the heads up about Nokia' cuts I hadn't seen that. I don't remember if RIM has announced lay-offs recently. But I think it goes back to Bolaji's earlier point that RIM is less diversifid than others in the space
I do not beleive that RIM's supply and partner structure has anything to do with their current problems. The past has kind of proven that. More likely is it atttributable to an era that is coming to an end with obsolete designs in times of stiff and "unexpected" competition. Also called complacency or "fat, dumb, and happy"
@mfbertozzi, It's the nature of the market. We have some serious disruptions happening everywhere and it's not limited to Nokia, RIM or even HP. We forget that Motorola Mobility (as it is now known) invented the wireless handset and was once the leading company in that segment. I believe the realignment in the handset market was inevitable and companies need to stay alert constantly.
Susan - I'm trying to grab a user name and paste it into the box. I also before tried to cut and paste some numbers/notes I jotted down, but everything vanished when I hit post. It either won't post or keeps spinning. Tried refreshing a few times and seems to be working
@Jennifer: the other point of comparison is about jobs; it seems distributed production strategy adopted in the past doesn't work, Nokia announced today jobs' cut for several thousands in Romania, for example, due to need to re-size production process.
No ,I think RIM it will figure out a way to be successfully. The quality,flexibility and the feature of the product always matter.So if a product have all the above it is matter of time to fix all the others(marketing,strategy, etc)
@Hospice_Houngbo, I believe it does. Whether it has the leadership in place to take it into that direction is another thing. Focusing solely on smartphones was sweet for a while until rivals figured out entry points and took advantage of these. Perhaps a review of the company's focus and operational strategy is important and this should involve moving beyond messaging.
@Jennifer: in a such way, could we consider RIM similar to Nokia? At the end, it seems the strategy to adopt a proprietary plat and still decide to stay there, is not providing strong help in business and good positioning in the future.
Adopting Android would just turn RIM into another HW supplier and that will not cure the problem. That space is crowded already. No, they need to find a way to tie up the enterprise customers with unique products and offerings that are diverse from waht you can get from another HW supplier...
Barbara - I think from a product standpoint, they are going to have to find a way to develop a more competitive product. I don't if that will be an operating system issue or a form factor design, but they have to take a step back and figure how they lost such an strong edge and why users are not following them
@Opstech, That's what I meant by saying RIM has options. I believe the strategy of focusing on a single product was damaging to the company. But there are still options out there where it can remain a player in the smartphones market but still go deeper into other industrial, manufacturing and heavy machinery markets.
@opstech, I do agree that there are still opportunities for RIM to be successful if it focuses on space/medicine/industrial/military/enterprise. But it's hard for me to be convinced they can compete in the consumer market in any significant way in the future.
As a buyer, I would be fairly confident that RIM's big base would protect me for the short run, as far as keeping my infrastructure. A takeover would mean change would come to me on a silver platter, instead of my having to risk a switch to an untried company on my own.
@Wale Bakare, You just put your thumb on a sore point for everyone in the industry. Pricing is where the market can break Apple's stranglehold and companies like Amazon may be the ones to do it but not RIM. They need their coffers full.
@anandvy, what good would them switching to Android do? Then how would RIM be any different from the many other companies that already sell Android devices? Wouldn't make any sense at all... and it's not like RIM is renowned for their great hardware design either, really.
@Opstech, Thank you for bringing that up. Somebody asked earlier if there were some upside for RIM in the current situation and I believe this is one of them. The company is still a major player and it's easy to forget the fundamental robustness of its technology and how these can be applied in other areas of the economy.
@Bolaji, RIM smarphone strenght is always phone chatting and bb messages centric which attracted consumer market as well as enterprise. That strategy should be transfered to its playbook and make price cheaper to Apple and Samsung tablets
@DennisQ, I concur. I recall companies would literally announce they would not support any other corporate messaging systems, which was one of the problems Windows faced. It started to unravel when employees would go out and buy their own iPhones and simply asked to be connected to the company IT system. Even C-level executives jumped in.
@DrFred, Excellent point. RIM can no longer compete on being an enterprise messaging company. That era is gone. Years ago, very few companies looked outside RIM for enterprise messaging because of the security it promised. Today, with every employee preferring Android or Apple, IT departments are being forced to integrate these into their messaging requirements.
@DrFred, enterprise is also loyal to RIM just due to being lazy and not wanting to throw out all our existing infrastructure and move to an unproven/possibly-less-secure alternative. But good points, if they lose these customers... what's left isn't that appealing.
It is part of RIMs aquisition and integration of QNX. It is utilising the Playbook and OS8 Smartphones to push interface development in the automotive navigation OS market. By coupling high volume consumer device development to the lower volume (higher profit) automotive markets it can develop a better user experience faster than any of its competition.
@SF: I have experienced, for a long, broadband from Northen Europe telecom operators, usually mobile coverage was (is) really good. RIM has left in telecom players power sub-layer functionalities, instead apps from Google or Apple could count on Wifi hotspot (most of them are providing free access). Do you think lack of wifi free-connection in the past, has impacted RIM's success?
@DennisQ, RIM's leadership did a great job for years pushing the company and they cornered the corporate messaging market as a result. Their inability to foresee the huge advances smartphones would make into the consumer market was a major error and the company is paying for that now. Additionally, how can anyone really anticipate how disruptive Apple would be?
@ Barbara, I do not belive in consumer and enerprise doesn't mix. Apple started as consumer is slowly moving to more enterprisee supportive so the other way also shouldn't be a problem for RIM. But what makes difference is RIM blackberry is always been a professional device before all these smart phones came into the market. Now with the entrance of Samsung, LG and HTC into the smart phones the market is completely changing.
Enterprise customers have been loyal due to the BB e-mail security as compared to Win, but now with Android and Apple flexing muscles in this space, i suspect that this advantage is soon gone. What is then left of RIM? Their OS and HW along with MMI just sucks
Jenn--it seems as though compnaies are abandoning the consumer (which, with the PC used to be business) market in favor of the enterprise. Granted, the enterprise has lots of $$$ to spend, but there are many players deeply entrenched there, such as IBM
@Tirlapur, Show me the company that won't be impacted by the global slowdown. Every electronics company will be affected. However, companies are also using this opportunity to invest in new designs and new products. That was the conclusion I had after attending the Embedded Systems Conference in Boston. They want to be prepared for when the market bounces back as it surely will. I believe RIM is investing in new designs too but we may not see some of these for a while.
Don't think too much was said about RIM's executive leadership, and as Bolaji has previously pointed out... I think the general feeling is that the guys at the top are -- at the very least -- not doing as good a job as they probably should. Can RIM succeed under its current leadership or should they bring in new talent?
Btw a number context might be useful, manufacturing sales declined by 1.7% in Canada last month due to currency and Canadian Companies have increased inventories due to US and global supply instabilities. A 0.6% decline in profit by RIM is beating the rest of the manufacturers in Canada.
@Nemos, RIM already introduced some updates to its Blackberry smartphone and updates to the Playbook are in the work. It will most likely get some bounce from the new Blackberry smartphones but must do more to spark sales of the Playbook.
The Fire will mainstream tablets at more appealing price points. That said, if RIM can step back and focus much more on the core segment of the population that made it famous in the first place - the business consumer - they may have a chance
In addition to QNX evolution, the company is moving on tentatives to approach the market in a different way; they have launched "Enterprising Mind" program, it is a strategy to listen to customers, instead of bring products in, but in the "half duplex" communication way. Do you think could it work?
@Anandvy, It's too early to say. I personally believe these are slightly different products. I wouldn't position the Playbook against the Kindle Fire, which is, to me, a high-end reader that will help Amazon retain customers and gain new ones. The Playbook is a direct competitor to the iPad rather than the Kindle and despite everything that has been said, the Kindle Fire is not going to kill the iPad.
RIM seems to have been playing catch up the last few years trying to battle Apple and Android platforms. Shouldn't they focus more on innovation and the business segment? This was their bread and butter and how they built their smartphone empire.
My questions are
1> what is the change in the market share of RIM in smartphones and tablets ?
2) What is the change in the market share yoy ?
3) The falling sales and surplus inventories is becoming the common trend. How is RIMs position different than others?
All right, let's open this up to the floor. Please feel free to contribute comments as well as questions but it is important to keep these civil. This is not an attempt to pound RIM but to explore what's going on and how the situation is being addressed.
"one of the complaints was that it had to be connected with the Blackberry smartphone for certain usage": It may be a strategy to make people who buy a Playbook to buy a Blackberry smartphone as well. But unfortunetely, it has failed .
The company is addressing the "shortcomings". I put these in quotes because there are areas obviously that would be difficult to deal with in a couple of quarters, including the market leadership Apple has. It is cutting costs and revamping product lines. It is coming out with new and more attractive smartphones and these are winning raves in the market.
RIM could get the government to shut down competition and force everyone to buy RIM products. With RIM's cash on hand, they could probably buy a lot of votes. And I think I saw a "For Sale" sign hanging on the legislature door, too. Or, RIM could buy a small country and retire there.
RIM's strength has always been the great relationship it has with service providers. This is being tested now with the Playbook, which is not seeing the same level of adoption. It has to get this back up again and then maybe the Playbook will gain a stronger adoption.
@Bolaji/@Jennifer: coming back to Barbara's question on strategy, RIM has achieved significant business results in providing email services, but once happened apps time, feeling is they didn't update neither offer and technology, leaving their own platform quite poor. Do you think is a right and brief analysis? My feeling is this has been one of the major negative key factor.
The Playbook is itself a great product but one can say the same thing about all of the other tablet PCs in the market today. The greatest challenge the product faces is also the same one competitors are facing and that is the iPad.
Additionally, we need to remember that RIM is not really a multi-product company. It has the Blackberry smartphone and now the Playbook. It is not really well positioned to counter a softness in one part of its business with growth in other sectors.
The Blackberry is losing customers in North America faster than in other parts of the world. It is still selling fairly decently in Europe and briskly in developing economies, one reason the company is turning its marketing firepower in those regions.
As we are all aware the Playbook didn't really score that well with customers. All the retail outlets have been slashing prices without announcing a formal price cut in the same way that HP did with the TouchPad. Even so, this is not really going to help RIM because it's price cuts aren't as deep as those of HP or as attractive as the new products announced by Amazon.
Let's take inventory, which can show how a company is using its resources. Inventories were up in August quarter (indicating lower than expected sales). Inventories rose to $1.37 billion in August compared with $645 million in the year-ago quarter. The finished goods inventory more than tripled on a year-to-year comparison. The company's accounts receivables went up and so did accounts payable. In all, they tell a story of a company struggling to boost sales, having less than efficient usage of resources.
In its latest quarter, RIM posted sales of $4.2 billion, down from $4.56 billion in the comparable year-ago period and down from $4.9 in the immediately preceding quarter. Net income for the August quarterwas $329 million versus $796.7 million in the yeara-ago quarter.
Guys, That's correct. Jennifer and I will answer some questions first and then open it up to the floor after 20 to 30 minutes but we want this particular session to be a very vigorous live chat, which means questions and responses should fly in all directions.
Welcome everyone! I'd like to introduce today's guest, EBN Contributing Editor Jennifer Baljko. Jenn, Bolaji and I worked together back in the EBN print days, and Jenn started following the electronics industry and Silicon Valley scene in 1997. Jenn and EBN Editor in Chief Bolaji Ojo will lead our discussion today on Research In Motion (RIM.) We'll set the stage for the first 20 minutes or so and then open the floor to questions. Bolaji, will you start by reviewing RIM's most recent financials?
@Barabara: We have to follow the usual procedure, right? You first ask questions to Jeniffer, give time for Jennifer to answer and when you or Bolaji open the floor we start discussing with Jennifer and the other participants, right?
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