Research in Motion in Trouble

By: Paul E. Jones
June 30, 2012

No doubt, you heard the news today that Research in Motion, makers of the Blackberry devices, turned in a horrible quarter and have pushed their delivery date for their next major operating system back until 2013. If I were a stockholder, I would be nervous. After hearing the earnings call, I would be scared to death to own a share of stock.

What the CEO Thorsten Heins said was, “It's not just about the next smartphone or the next tablet. It is really about a great new platform that we're building.” People who know me know that I thrive on technology and look forward to where we can take technology. I don’t like to settle with “what we have”, because I think there is always something more we can do. We can do better than what we have done and we can always take a step toward revolutionizing communications.

RIM had its opportunity and totally blew it. The very minute the iPhone hit the market, they should have seen the writing on the wall. I did. When Android hit the market, they should have been pouring sweat in an effort to remain a dominant player in the market. They knew about these two platforms since 2007, and yet they did not take immediate action.

RIM is now saying that their next major platform will be released in early 2013. This platform will be released into a market that is already flooded with Android, iOS, and Windows phones. Not only that, but by the time it is released, Microsoft will have released its first tablet, the Surface. There are already tablets galore in the market, but Microsoft stands a fair chance at success with what appears to be a solid piece of hardware, cool keyboard cover, and the benefit of Microsoft Office. I do not need to tell you how iPad owns the market now and how Android is coming on strong. Most importantly, one can put the same apps (and lots of them from which to choose) on their phones and tablets. I assume the same will be true for Microsoft, but I do not know. Regardless, Microsoft already has many developers building apps and the tablet can run existing desktop apps!

And RIM expects to come walking into this market next year with a new platform that will ... what? What in the world could they possibly bring to market that will change the purchasing decision of consumers and enterprises at this point? It better be amazing. Anything less and it will sink.

Sadly, I could have written a similar story about Nokia along these lines, but at least Nokia did, in my opinion, make the wise move of jumping on board with Microsoft. Nokia is in the business of selling handsets and they have some great technology to accompany what Microsoft will provide. Their road to recovery will not be easy, but at least there is hope. RIM, though, made the decision to go at it on its own and I think they’ll pay the price for it. I might be pleasantly surprised. I definitely wish them the very best of luck.

If anything, I think this should serve as a valuable lesson. When you are a leader in the market, that is when you need to be most innovative in order to stay far ahead of your competition. You must take those risks that involve challenging the established norms. At best, you will remain the market leader with new, innovative, and cool products. At worst, you find out what new technology does not work and you retain your leadership position with your current product portfolio.