RIM’s Solution: It Should Service the 20%

Posted on March 30, 2012

RIM’s latest financial results along with Nielsen’s latest market share results have demonstrated the ongoing trend of RIM losing pace in smartphones.

Today it would be hard to recommend to anyone to choose a BlackBerry device except if they only really want to do a lot of mobile email.

Thorsten Heins, RIM’s CEO, has instigated a strategic review to look at options for RIM, but has also suggested that the company needs to focus on what it knows well: government and corporate clients.

[RIM] said it would focus on “what makes a BlackBerry a BlackBerry,” and go after the enterprise market with a renewed focus

Source: The Globe and Mail

If you look at the smartphone market, Apple has done enough to satisfy the needs of about 80% of companies, and a few out there will be happy with Android devices. BYOD (bring your own device) will be an option for a few smaller to medium-sized companies as well, but probably will never fly amongst larger companies with more controlling IT departments.

So, there remains 20% of companies and government departments that have serious and specific needs. RIM already has a services organization, so RIM’s future should be to create specific eco-systems for these companies which value their needs. This could be military, financial services, executive government etc where security of information is primordial, and that information has a high price tag.

RIM could create a set of service companies around it that can create applications for the specific requirements of this group.

The BlackBerry operating system should then cater to focusing on the needs of this group with the best security settings, the best device management, the best chinese walls, the best data management and the best cellular performance.

RIM’s revenue model would shift from making most of their profits on the hardware and software to professional services.

As for consumers, RIM should continue making consumer devices to spread hardware and software development costs, but must realize that the people who will buy RIM devices will do so because they are cheap. Hence RIM will need a low-end model for the mass-mass market and a high-end model for its* 20% clients.*

The good news from RIM is that they’ve understood that they cannot compete with Apple and Google’s Android head-on.

We are undertaking a comprehensive review of strategic opportunities including partnerships and joint ventures, licensing, and other ways to leverage RIM’s assets and maximize value for our stakeholders.

Thorsten Heins

Another interesting tit-bit was Thein’s expectation that RIM will have to work with partners on some aspects of providing service. One area where RIM is weak is the cloud. Looking just at Apple’s products, the benefits and lock-in of iCloud are very clear. Hence RIM should consider partnering with Microsoft for its Cloud services, even if it needs to add in a layer. Most BlackBerry users will be using Windows, especially in corporate IT, so this would make a great match.

In Summary, RIM should:
– focus on corporate clients with special needs; the 20%
– create consumer devices to spread hardware and software development costs
– build a stronger services organization
– partner for services to build out the ecosystem.