RIM’s Woes: Create smartphone communicators (FaceBerry?), do not copy others’ playbooks
BlackBerry-maker RIM is struggling following some terrible recent results. It’s now under pressure to hasten the launch of next generation BlackBerry smartphones.
RIM must resist and instead execute better.
The most shocking part of those results was the performance of the PlayBook tablet. Just 200,000 shipped in its second quarter on sale, under half the 500,000 in its first quarter. This has scared observers as the PlayBook is RIM’s first next generation product of many in a major product transition that will transform RIM’s entire range. The PlayBook is built on the same QNX OS foundation that will power future BlackBerry smartphones.
The PlayBook’s failure clearly demonstrates why speed of delivery, at the expense of quality execution, is the wrong strategy for RIM now despite the pressure:
- The Playbook attempted to go head to head with the iPad by focusing on a media-centric experience, with Flash support, video output to a TV set and elegant multitasking. This diversification spread RIM’s R&D efforts too thin for a company attempting to do three major things: defend its core markets; evolve its old product range; as well as building a completely new set of products using QNX OS.
- RIM failed to appeal to its existing communication-centric customers. For corporates, the PlayBook lacked integration with BES and any native email capability. For young consumers, typically Curve owners, the PlayBook lacked BlackBerry Messenger.
The drop in RIM’s overall device shipments isn’t surprising and shouldn’t lead to a change in strategy. While quarterly device shipments were 10.6 million, down 1.5 million from the equivalent quarter in 2010, they were 2.3 million higher than the same quarter in 2009. RIM remains profitable. In the circumstances, given the complete product portfolio-wide transition that RIM’s largest customers — operators and enterprises — know is about to happen this is a pretty good holding action.
RIM is about to start a major product transition from smartphones based on an evolution of the original BlackBerry software to the new QNX phone operating system that also powers the PlayBook tablet. These kinds of product transitions are hard to do, are always risky, and always threaten to undercut sales of old generation products. Analogous product switches show how hard it is to do:
- Nokia’s decision to switch to Windows Phone 7 as its smartphone OS, from Symbian, has led to a horrific fall in handset shipments: from 109 million to 72 million in a single quarter. Nokia’s shipments were down 35% year on year.
- Apple sunk enormous resources into porting Mac OS classic from 680xx chips to PowerPC in 1992-4 and their next generation Copland operating system stagnated and was finally cancelled. Eventually Apple bought Next and built OS X from that foundation instead.
- Apple’s OS X first launched in 2000 but without key features such as DVD playback. Only with the release of Panther in 2003 was the system both feature complete and delivering optimised performance.
- Palm’s next generation WebOS struggled to establish itself from the launch in 2009. The company lacked the resources to develop the system fast enough and was bought by HP in Spring 2010. Last month HP cancelled all WebOS hardware. Palm’s original successor to its classic OS, the Access Linux Platform failed even to get that far.
- IBM’s successor to the original PC system, DOS, failed. OS/2 was cancelled in the mid 1990s despite the backing of one of the largest companies in the world.
RIM’s Strategy Must Play to BlackBerry Strengths, Not Mimic Someone Else’s Playbook
If RIM is to stay in the smartphone market there are two lines of analysis to pursue to build a solid strategy:
- Look at where RIM’s existing products are strong and look to fortify, extend and improve those areas.
- Seek to counter competitors by delivering strong product features where those rivals are weak.
In both analyses, RIM’s expertise in communication is a clear differentiator:
- BlackBerry remains the key smartphone used by young consumers. In the UK, 37% of smartphone users aged 12-24 have a BlackBerry (Source: Ofcom). This dwarfs all other smartphone brands. Among this group, it’s BlackBerry Messenger that remains the major draw and one where no rival smartphone platform has a widely adopted equivalent, although Apple’s iMessage aspires to do it in iOS version 5. Android and Windows Phone owners must rely on third party apps like Whatsup to try to replicate the BBM experience.
- Android, iOS and Windows Phone all deliver barely good enough communication features. They’re certainly not best in class. Android delivers an uneven email experience for all those not using Gmail and has haphazard social network integration that depends on each OEM’s custom software UI. iOS has weak social network integration combined with a sub-par calendaring experience. Windows Phone has the potential to deliver the most integrated communication experience of any but has weak third party support which Microsoft needs to tie in the numerous other communication sites.
Bottom Line: Communication. Communication. Communication.
No one buys a smartphone for a best in class phone experience: Dumb phones deliver better battery life, usually better signal reception, and often a better phone app with more features and less extraneous buttons.
But every smartphone owner uses their phone as a major communication tool and almost every smartphone owner cares about how well their phone makes phone calls. Other smartphone makers have become distracted by apps, Internet and media and left this mass mass mobile market for communication poorly served. Nokia has even forgotten the rather wonderful “Communicator” branding in its rush to do music, maps, video, photography, games, apps and anything but communication features.
Apps and media are a much harder marketing battleground in which to fight and one where, unlike communication, RIM faces an uphill battle against rivals with much stronger starting points and a reputation for outstanding developer support. The PlayBook shows this problem. Microsoft’s vast spending around Windows Phone show how even a vast software firm is struggling to compete with Apple on apps. RIM can’t excel here, instead it needs to make sure next generation BlackBerry models are good enough.
Instead, RIM has a tremendous opportunity to build the best smartphone for communicating with friends, colleagues and customers bar none and truly differentiate.
Subscribe to comments with RSS.