RIM – Tech.pinions

Tech Toy Story

Microsoft’s newest ad campaign is breath taking but not, I think, in the way that Microsoft imagines.

“Just a toy“, my ass. ~ Steven Aquino (@steven_aquino)

This is why Microsoft will lose. This shows they don’t get it…“ ~ Ben Bajarin (@BenBajarin)

Is there some sort of Redmond Triangle — a mysterious zone where ad executives of talent disappear without a trace? The Microsoft ad is ignorant, insulting, and shockingly naive. How could a company as successful as Microsoft get it so very, very wrong?

History Repeats

[pullquote]The only new thing is history we don’t know. ~ Harry S. Truman[/pullquote]

Of course, Microsoft is not the first — nor will they be the last — to dismiss their competitor’s products as mere “toys.” There is a long and storied history of such foolish behavior.

Most recently, Blackberry, a.k.a, RIM, proudly boasted that their phones were “not a toy“.

Bad omen for Microsoft: It’s using BlackBerry’s ‘tools not toys’ line. ~ BGR (@BGR)

I remember the last company to push the “tools not toys” line: BlackBerry. Worked out awesome for them. ~ Brad Reed (@bwreedbgr)

[pullquote]History is a very good teacher, but he has very few students. ~ Wael El-Manzalawy[/pullquote]

But the story of dismissing the new as mere toys, goes back over a hundred years and surely extends throughout all of history.

While theoretically and technically television may be feasible, commercially and financially, I consider it an impossibility, a development of which we need waste little time dreaming. ~ Lee De Forest, inventor, 1926

I have determined that there is no market for talking pictures. ~ Thomas A. Edison, 1926

Airplanes are interesting toys but of no military value. ~ Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre , France

X-rays will prove to be a hoax. ~ Lord Kelvin, British mathematician and physicist, 1896

When the Paris Exhibition closes, the electric light will close with it, and very little more will be heard about it. ~ Professor Erasmus Wilson, 1878

It’s only a toy. ~ Gardiner Greene Hubbard, future father-in-law of Alexander Graham Bell, on seeing Bell’s telephone, 1876

Although it is…an interesting novelty, the telephone has no commercial application. ~ J. P. Morgan, to Alexander Graham Bell

Well-informed people know it is impossible to transmit the voice over wires as may be done with dots and dashes and signals of the Morse code, and that were it possible to do so, the thing would be of no practical value. ~ Editorial in the Boston Post, 1865

Disruption Repeats

Disruption seems to follow a fairly steady pattern:

Stage 1: The incumbent over-serves the vast majority of their customers.

Stage 2: A challenger appears with a cheaper and/or simpler product or service that only performs a subset of the incumbent’s services. However, that subset served is the set of tasks that the vast majority of users wish to enjoy or perform.

Stage 3: The incumbent dismisses the challenger’s product or services as “beneath contempt”. Calling a new and inferior product a “toy” is a subset of such disdain ((Inspired by Horace Dediu)).

Who says you can’t do “real work” on a non-Microsoft tablet?

Just because Microsoft SAYS non-Microsoft tablet don’t do real work, doesn’t make it so.

In sales environments, a tablet is a better and more useful tool [than a PC]… ~ Nicholas Paredes

James Kendrick, of ZDnet, certainly seems to think that he gets “real work” done on his tablet.

And the way that Enterprises are snapping up non-Microsoft tablets suggests that SOMEBODY — and a whole lot of somebody’s — thinks that tablets are eminently capable of doing “real work.”

How many people use PC’s for “real work” anyway?

Benedict Evans poses — and then answers — the question: “How many people use PCs for ‘real work’?

One problem with saying that you need a PC to do ‘real work’ is that a large % of people don’t actually use their PC for ‘real work’ ~ Benedict Evans (@BenedictEvans)

[pullquote]The easiest software incumbent to disrupt is the one prioritizing the needs of its strategy over the needs of its customer. ~ Aaron Levie (@levie)[/pullquote]

Microsoft has the question backwards. They’re asking: “How many tablets can run programs like Excel, Word and Powerpoint?” What they should be asking is: “How many people who use tablets need to use programs like Excel, Word and Powerpoint?”

Efficiency is doing things right. Effectiveness is doing the right things. Microsoft’s tablets may or may not be efficient, but they’re not effective because they’re not doing the right things.

What’s So Wrong With Being A Toy?

Quite often, when incumbents think a new entrant product is a toy, they’re right. ~ Benedict Evans (@BenedictEvans)

[pullquote]The supreme accomplishment is to blur the line between work and play. ~ Arnold J. Toynbee[/pullquote]

Being called a “toy” is not the insult Microsoft thinks it is. It may, in fact, be the ultimate compliment.

In the war between platforms you can use for real work and platforms that are just toys, the toys always win. ~ Benedict Evans (@BenedictEvans)

Creating a computer that does real work is the act of an engineer. Creating a computer that makes work feel like play is an act of genius.

I LIKE the tools that help me get work done. I LOVE the tools that make my work fun to do.

When the craftsman made the first wheel, industry veterans pointed out you couldn’t use it for real work. ~ Benedict Evans (@BenedictEvans)

It made for a fun toy though. ~ John Gruber (@gruber)

Microsoft Just Doesn’t Get It

[pullquote]Wisdom doesn’t necessarily come with age. Sometimes age just shows up all by itself. ~ Tom Wilson[/pullquote]

Microsoft seems to make the same mistake over and over and over again. The phrase “less is more” is literally untrue; it’s a logical impossibility. But when people use this expression, they’re not speaking logically, they’re using self-contradictory phrasing to describe an important principle — that keeping things simple; that avoiding unnecessary detail; often improves things.

Microsoft just can’t seem to learn this lesson. And, ironically, the longer they think of their competitor’s products as toys, the less likely it will be that their prospective customers take them seriously.

BlackBerry Implosion: A Postmortem

In the past few days, the true extent of BlackBerry’s perilous position in the market has become clear, but the future for the company is cloudier than ever. The company plans to lay off another 40% of its staff, consumer device sales are being halted (or not – “prosumer” sales will continue), and the board of directors said it would consider offers for all or portions of the company. When BlackBerry’s stock cratered at the news, Fairfax Financial Holdings, its largest shareholder – and controlled by a former BlackBerry board member – put in a bid to stop the price from cratering further. We’ll see if other bids are forthcoming or if Fairfax actually buys BlackBerry (it can walk away any time during the next month of due diligence).

I’ve been tracking BlackBerry closely for over a decade as an analyst, and while everyone agrees that BlackBerry didn’t react quickly enough to Apple, there were three main reasons why it reacted so slowly. RIM, Nokia, Microsoft, and Palm all dismissed Apple’s entry in January 2007. This was partly understandable in 2007 when RIM was aimed at business users and the iPhone did not support corporate email. Google was the only player to see the iPhone for what it would become, and Google quickly changed Android’s UI from a variation on BlackBerry and Windows Phone to a touch-driven experience. RIM’s oversight was less forgivable in 2008 when RIM had launched the Pearl targeting consumers, and the iPhone got Exchange support, moved to a subsidized model, and announced the App Store. Verizon Wireless – iPhoneless at the time – handed RIM a prime opportunity to catch up in late 2008, but the BlackBerry Storm grafted a poor touch experience onto an OS designed for a scroll wheel. It was also a buggy mess. RIM only moved to create a modern, touch-first mobile OS in 2012, and phones finally shipped this year. By that time, it was too late – its high end users had moved to iOS, and its Curve sales were being decimated by cheap Android phones running WhatsApp.

What Went Wrong? There were three main factors:

1. NTP. When BlackBerry could have been designing breakthrough consumer-oriented BlackBerries just before the iPhone launched, RIM management was not focused on creating a browser and app-centric mobile experience – they were consumed with fighting a patent lawsuit from NTP. The fight was clearly personal to RIM management, and it took an enormous amount of time and attention away from running the business. The resulting line of consumer BlackBerries were just BlackBerries with a media player and a camera grafted on. They sold well, but did not position BlackBerry to succeed as the market shifted and expanded.
2. BBM. Once Apple started decimating RIM’s core prosumer user base in North America, BlackBerry sales and profits did not decline – they rose. RIM had lucked into a BBM frenzy in Europe and emerging markets, where consumers bought BlackBerries to save money on messaging. From 2009 – 2012, BBM’s success masked underlying problems in its business, and RIM further failed to realize that this windfall would soon be under severe margin constraints. Cheap Android phones running free messaging apps were more attractive than (relatively) pricey BlackBerries – and Android had a richer ecosystem of apps and services beyond messaging that BlackBerry couldn’t match.
3. Management. RIM’s senior management suffered from a truly epic case of founder’s syndrome. For years, people told RIM CEO Mike Lazaridis that what he was trying to do was impossible. RIM was successful anyway, and then financial analysts and the tech press switched to predicting that RIM would be crushed by Microsoft or Nokia. When the real wolf was at the door, Lazaridis and his co-CEO Jim Balsillie ignored it. As late as 2012, RIM actually diverted resources from BlackBerry 10 to push out a new, and not completely compatible, version of its old OS! BlackBerry management did not even prioritize phones for its new OS, launching BlackBerry 10 half-finished on the BlackBerry PlayBook. The PlayBook bombed, and BlackBerry 10 only appeared on a phone a year later (and without a critical mass of high quality apps). When Lazaridis and Balsillie stepped down, they did so unwillingly, and installed an insider to continue their strategy. New CEO Thorsten Heins genuinely did not believe that there was anything wrong at first, showing how out of touch and insular the management team was. Heins did eventually realize that things were dire, but under his watch, BlackBerry produced a horrific Z10 marketing and launch plan, and produced nearly a billion dollars of excess Z10 inventory.

Blackberry: The Charge Of The Light Brigade

Yesterday RIM, now renamed Blackberry, introduced the Blackberry 10. Tech.Pinions columnist, Steve Wildstrom, is cheering for Blackberry as are many Tech.Pinion regular readers and millions upon millions of others. Does the new, re-invented, Blackberry stand a chance? Or is Blackberry merely metaphorically repeating the infamous charge of the Light Brigade? In order to answer that question, let’s look at some computing history.

The Personal Computer

In the late seventies and eighties, at the dawn of the age of personal computing, there were scores of different competing computers and computing operating systems. By the eighties, things had begun to shake out. One by one, computers like the TRS-80, Commodore 64, Apple II, Atari ST, Amiga and others took their final bows and left the stage forever. By 1995 the only two players left standing were computers powered by Windows and the Mac. And as many of you know, the Mac was barely standing.

From that day until this, no one has seriously challenged Windows’ leadership in personal computing. For almost three decades, Mac aficionados have insisted that theirs is the superior operating system. Did that help the Mac overcome Window’s dominance and secure the personal computing crown for itself? No it did not.

On February 19, 1996, in an interview with Fortune, Steve Jobs said:

“The PC wars are over. Done. Microsoft won a long time ago.”

He was right.

LESSON #1: HAVING THE BEST HARDWARE AND/OR OPERATING SYSTEM IS NO GUARANTEE OF VICTORY.

LESSON #2: ONCE A PLATFORM IS ENTRENCHED, IT IS ALMOST IMPOSSIBLE TO DISLODGE.

The MP3

In the self-same Fortune interview referred to above, Steve Jobs also said:

“If I were running Apple, I would milk the Macintosh for all it’s worth — and get busy on the next great thing.”

And that’s exactly what Steve Jobs did when he returned to Apple. Apple continues to milk the Mac to this day. And their next great thing was – the iPod.

In the late nineties, there were several companies competing to win the nascent MP3 wars. In 2001, Apple introduced the iPod, but it was really the one-two combination of the iPod and iTunes that eventually won the day. iTunes helped store, organize and deliver your music to your iPod and the it was the iPod – with its clean hardware, its easy to understand user interface and its easy to use click wheel – that helped you to easily find your music and play it.

“Do not renew an attack along the same line (or in the same form) after it has once failed.” ~ B.H. Liddel. Hart, Strategy

It’s important to understand two things here. First, the iPod was not a direct attack on Microsoft Windows. Far from it. In military terms, you don’t conduct a frontal assault against a well-entrenched enemy. In business terms, you don’t defeat the industry standard bearer just by being a little better — or even a lot better — at what you do. The Mac has been attacking Windows since 1984 and it still has only 5% to 10% market share to show for its efforts. (True, the Mac’s consolation prize is that it may garner as much as 35% of the sector’s profits, but that still does not make the Mac anywhere near the industry standard.)

Second, Apple did not win the MP3 wars simply by being better than the existing players from Sony, Archos and others. With the iPod/iTunes combo, Apple leap-frogged the existing market and created a whole new category of device. It was the synchronization of iTunes with the iPod that was its killer feature. And despite all the criticism that iTunes deservedly receives, no other competitor has come close to duplicating its functionality. In military terms, Apple created a whole new front. In business terms, Apple created a whole new category. And once Apple established itself as the standard for the new MP3 category, they never let go their grip. To this day, Apple dominates the MP3 market with over 70% market share and gawd-knows-how-much profit share.

Sony, Archos and others tried to unseat the iPod by providing cheaper devices with more features. Didn’t happen.

Microsoft came late to the MP3 game but they came with what they, and most industry observers, thought was the winning strategy. With PlaysForSure, Microsoft intended to duplicate, in MP3’s, the same success that they were enjoying in personal computing. Microsoft would create the operating system, license it to manufacturers and then watch as their open licensing system inevitably overwhelmed Apple’s closed operating system. Didn’t happen.

After a while, Microsoft tired of not gaining any market share (or any profits), threw their PlaysForSure partners under the bus, and created the Zune. (Kind of reminds me of how Microsoft is handling the Surface. But I digress.) It’s hard to remember now, but most industry observers predicted that the Zune was the beginning of the end for Apple and the iPod. At that time, Apple was a mere upstart and Microsoft was the 900 pound gorilla that everyone feared. What Microsoft wanted, Microsoft took. With the weight of Microsoft behind the Zune, how could it fail to become the industry standard? Didn’t happen.

LESSON #3: WHEN IT COMES TO PLATFORMS AND STANDARDS, TIMING MATTERS. THE FIRST MOVER AND THE FAST FOLLOWER HAVE THE INSIDE TRACK. THE REST JUST REMAIN AT THE BACK OF THE PACK.

The Smartphone

“Do not throw your weight into a stroke whilst your opponent is on guard.” ~ B.H. Liddel. Hart, Strategy

In 2006, Smartphones were ruled by the Palm, Windows, RIM and Nokia. In 2007, Apple introduced the iPhone. By 2013, Palm was gone, Windows Mobile was gone, Nokia was a niche player, dependent upon Microsoft’s new mobile operating system, and RIM was making a bold gamble to regain relevance. What’s important to understand is that Apple’s iPhone was not, as many thought, a more expensive smartphone. Rather, it was an inexpensive pocket computer. Apple did not really make a better smartphone. Instead, they opened a new front, created a whole new category of device, and then dominated that category. Google did an excellent job of fast following with Android and now, between them, Apple’s iOS and Google’s Android sell more than 90% of all smartphones.

Within a year after the introduction of the iPhone, Palm tried to reinvent themselves, but they lacked the resources to make it happen. Windows Mobile re-invented itself into Windows Phone 7, and again into Windows phone 8, and what has that gotten Microsoft? Perhaps 3% market share? Microsoft has all the resources in the world. They have tremendous business connections. They’re patient and persistent. And their Windows Phone operating system is well-respected. Yet they can’t seem to gain any traction in the phone market. If Microsoft, with all its advantages and with a four year head start, can’t gain any traction in the smartphone markets, then what realistic chance does Blackberry have?

LESSON #4: YOU DON’T OVERCOME A MARKET LEADER THROUGH A DIRECT ASSAULT. YOU FLANK THEM.

The Tablet

“Exploit the line of least resistance – so long as it can lead you to any objective which old contribute to your underlying object.” ~ B.H. Liddell Hart, Strategy

In 2001, Bill Gates was touting the advantages of the tablet. Yet in 2010, it took Apple only 7 months to sell more tablets than Microsoft had been able to sell in the previous 10 years. Did Apple do this by simply making a better tablet? No. Apple re-invented the tablet market by adding instant-on, longer battery life and a capacitive touch screen. But most of all, Apple re-invented the tablet by creating a wholly new touch user interface. Apple didn’t improve on the existing Microsoft tablets. They created a new category of device with a wholly new operating system.

By 1995, Microsoft’s Windows dominated personal computing, never to be challenged again. Neither Apple nor any other contender ever did or ever will unseat Windows from its dominant position. Instead, Apple created a new market and dominated it. By attacking Microsoft where it was weakest, Apple did in 7 months in tablets what it could not do in 20 years in personal computers.

LESSON #5: THE ART OF WAR IS THE ART OF AVOIDING A DIRECT ASSAULT AND IMPLEMENTING AN INDIRECT APPROACH TO ONE’S ENEMY. THE ART OF BUSINESS IS THE ART OF AVOIDING THE DIRECT ASSAULT AGAINST A COMPETITOR’S STRENGTHS AND LEVERAGING ONE’S STRENGTHS AGAINST A COMPETITOR’S WEAKNESSES.

Conclusion

Theirs not to make reply,
Theirs not to reason why,
Theirs but to do and die:
Into the valley of Death

~ Alfred, Lord Tennyson, The Charge of the Light Brigade

Do I hate Blackberry or wish them ill? Absolutely not. I have tremendous respect for what they’ve done. The original Blackberry phones were category busters and a wonder to behold. But the truth is, it does not matter if the Blackberry 10 hardware and software are narrowly better than the iPhone or Android phones. They have to be so superior that customers will be willing to switch. Because remaining the number four, or even the number three, smartphone OS is not going to cut it with developers. And people don’t switch platforms unless the alternative is not just superior but FAR superior to their current platform. Just ask the Mac, the Zune, and Windows Phone 7.

If you want to argue that a fast follower can overtake a first mover, I will agree. If you want to argue that the Blackberry 10 – introduced over 6 years after the iPhone was introduced – is a fast follower, I will respectfully disagree.

In war, you don’t win a frontal assault unless you have overwhelming military superiority. The art of war is, in part, about how to avoid making frontal assaults. In business, you don’t win a war against an establised standard unless you have overwhelming product superiority. The art of business is, in part, about differentiating your product and advancing your strengths against your competitor’s weaknesses.

Blackberry is not creating a new front or a new category. They’re attacking the existing leaders where they are entrenched and strongest. Does anyone honestly think that the Blackberry 10 is so superior to the iPhone, Android phones and Windows Phone 8 that it will overwhelm any of them? If not, the Blackberry 10 is the charge of the Light Brigade all over again…with similar results, but lacking the poetry.

Cheering for BlackBerry

On Wednesday, Research In Motion will launch its bid to save itself with the redesigned from the ground up BlackBerry. I’ll be at the launch event and I will judge the new hardware and software on their merits, still I have to admit that I am cheering for a BlackBerry comeback.

Apple reinvented the smartphone in 2007, but before that, the most important smartphone innovations came from Palm and RIM. Palm’s Treo (actually, the original version came from Handspring, a company started by Palm’s founders and later merged back into Palm) invented the concept of integrating a mobile phone and a PDA, along with third-party apps. The original BlackBerry, which was not a phone, created true mobile email and calendar. Eventually, this all came together to create the modern smartphone, which Apple took to the next level with the iPhone.

The iPhone did in Palm and nearly killed RIM. The decline of Palm was inevitable. The company was always cursed by under-financing and a lack of stable, competent management. When Apple turned up the heat, Palm lacked the wherewithal to respond successfully with its reinvention after its purchase by Elevation Partners was too little, too late. Its demise after a horribly bungled acquisition by Hewlett-Packard was a somehow fitting ending to a very sad tale.

RIM is a very different story. Palm knew what was happening to it but couldn’t do much about it. RIM, riding high as BlackBerry sales continued to soar well into the iPhone era, but lacked the paranoia than Intel’s Andy Grove long ago pointed out was a key to survival in a highly competitive industry. RIM co-CEOs Michael Lazaridis and Jim Balsillie were convinced of the superiority of their product and their business model and failed to respond to the market’s shift toward demanding highly capable handheld computers, not glorified messaging devices.

Fortunately, RIM, unlike Palm, had deep financial resources and significant annuity revenue streams that bought it another chance. It has two reservoirs of strength, the popularity of its low-end devices in emerging markets (where volume sales can be had, but profits are scarce) and enterprises, especially governments and others with the greatest concern about security. Success in neither is a given, but the opportunities exist. And I’ll admit to a long-standing fondness for RIM, particularly Mike Lazaridis’ uncontained enthusiasm when he talked about his newest BlackBerry or showed off a lab at RIM’s Waterloo, Ont., headquarters.

I think that both Android and Apple would benefit from some additional competition. Microsoft, despite heroic efforts, has so far failed to win much traction in the mobile market. Had Windows Phone and Windows RT taken off, there wouldn’t be much room for a RIM comeback. But they haven’t, so there is. It’s going to take a spectacularly good product to succeed in this tough neighborhood. I’m hoping that RIM still has it in them.

Why RIM Is Not Dead Yet

I wanted to share some of my thoughts regarding RIM prior to them having their press event next week. I know there are many who have the opinion that RIM has been circling the drain for some time now and have counted out any rebound chances the company has. While I agree that the hills they face are steep, I am not ready to write their obituary yet. These are my reasons why.

The Sheer Size of the Mobile Market

When I give our platforms and ecosystems presentations to industry executives, investors, and at other public forums, the most common question I get when I talk about other platforms than the current dominant ones, is how many platforms can the market sustain. This is an extremely valid question, but it is one that I believe is asked with a backward looking view and not a forward looking view.

If we are using the PC industry as our example, then this question makes the most sense. There was one dominant platform—Microsoft—who owned the vast majority of platform share. If we look at the size of the market as well as where it was during along both the consumer adoption path and market maturity cycle, then we can explain quite a bit about why Microsoft was dominant, but also why at a certain point in time the door was open to other players. But the most relevant point on this topic was that during Microsoft’s dominance the market was both maturing, using Windows and more relevantly the Internet as the standard, but also not that large on a global scale. The market for PCs is in the hundreds of millions (and potentially shrinking) where the market for smartphones is in the billions. With such a large market it is easy to believe that a number of platform players can and will thrive as they carve out specific segments of the market to focus on.

As we are constantly observing, the one size fits all model simply doesn’t stand up in such a large consumer market and personal preference will only become more personal and specific to the end consumer the further down the adoption and maturity process that both smartphones and tablets go.

You Never Forget Your First Love

Our mobile market intelligence data continually points out positive sentiment toward RIM and the BlackBerry devices in particular. For many mobile professionals today, and even more millennials than you would think, they cut their proverbial smartphone teeth on BlackBerry devices. I can’t tell you how many times during our smartphone interview sessions with consumers we hear the words “I sure loved my BlackBerry.” Granted much of this sentiment was founded in the love of the BB keyboard that so many used for heavy text input. I believe we are past the point of the physical keyboard being desirable for the bigger sections of the market and we are yet to see what RIM intends to do with their hardware in this area. That being said, the level of positive sentiment toward BlackBerry devices is one that I do not believe can be discounted as I have a feeling that at the very least it will lead these consumers who share this sentiment to strongly consider BlackBerry’s new devices.

A Focused Opportunity

The opportunity staring RIM in the face is not the general mass market consumer, rather it is the mobile professional. A number of my colleagues in the field of industry analysis disagree with me and think RIM should go after the low end but I disagree. I feel RIM’s potential is the higher end. Many millions of global industry professionals switched to the iPhone from RIMs devices but also many millions still use them today.

Whenever I talk with folks still using RIM devices today, they acknowledge the fact that they are not the most cutting edge devices, but also point out that they are embedded into their workflow. Something that by itself is a key understanding. Just like how many professionals and corporate workplaces have come to standardize, depend, and are extremely comfortable with Windows and Office in their productive workflow. So are many of these same professionals committed and comfortable to RIM. These devices have helped them be successful and many have not changed yet for that very reason. Even though the iPhone and iOS is penetrating the workforce in rapid numbers I still think there is an opportunity for a second platform player focusing on the mobile professional. Android has not caught on largely due to security and Windows Phone is practically non-existent from current CIO surveys I have seen.

If RIM can bring to market a more modern and competitive solution targeting these individuals, I believe they can have a successful business by focusing on value to the high end on the front of hardware, software and services. Keep in mind this market may not be massive like the mass consumer market but I do believe it is lucrative.

Competitive Hardware and Software

This is the big IF. As I stated above targeting the mobile professional is the key but this hardware has to also be appealing from a consumer standpoint because these mobile professionals are also consumers at heart. So the saying goes “if you want to compete in enterprise, you have to compete for the consumers.” Its the BYOD effect in full swing.

RIM must bring competitive hardware to market. This was the root of Palm’s downfall in my opinion. webOS was an extremely competitive platform from an OS standpoint but the hardware was years behind. If RIM makes this mistake they will certainly go the unfortunate way of Palm.

Secondly the software experience must also be competitive and I don’t just mean a plethora of apps. I am becoming increasingly convinced that a solid list of quality applications is more important than a massive quantity of applications. I find every single app store shopping experience today much too cluttered and difficult to make decisions on which app to install or buy. See my thoughts on the paradox of choice for a more clear idea of what happens when we are faced with too many choices.

I’d rather have a much more curated app experience around the core things I do or applications I care about. By focusing on the mobile professional, this becomes a bit easier. Even Apple has begun to do this and smart platforms will take notice. Apple has many app essentials or app starter kits broken out by genre. This can be games, photography, productivity, social networking, etc., but when you look at these genre specific hubs you don’t see hundreds of apps you see dozens. These are highly curated and that is the point.

I am not downplaying the value of long tail applications, but what I am pointing out is that most consumers at best use 10-12 key applications regularly. They may download way more than that but regular use is much lower. This is why I believe that other platforms can come in with a segmented play and get the couple thousand or so most popular apps but then also begin to curate quality genre specific ones to the market segment they are focused on.

Of course for RIM, or any new platform entrant, there is a chicken and the egg scenario. To attract those key applications and keep attracting quality top tier applications, you need to acquire a critical mass. There is no if you build it they will come motto here. There is only if you sell tens of millions they will come motto. This is where the channel comes in and we will certainly see how serious the network operators are about wanting more platform choice.

I look forward to RIM’s event next week and to see whether it will alter my opinion on their future.

The BlackBerry Death Spiral

“Notice of Intent to Sole Source iPhone Devices.” That dry headline, from a National Transportation Safety Board post on the Federal Business Opportunities web site, is news about as grim as it can get for Research in Motion. Though the launch of the new BlackBerry 10 smartphones the company is counting on for salvation is just over two months away, it may well be too late. Enterprise customers, long the backbone of RIM’s business, are abandoning the platform and without them, RIM has little hope of survival.

The NTSB. like many U.S. government agencies, has long depended on BlackBerrys for secure mobile communications. But they are beginning to fall away. Among others, the National Oceanic & Atmospheric Administration and two Homeland Security agencies, Customs & Immigration Enforcement and the Bureau of Alcohol, Tobacco, Firearms & Explosives have announced plans to move to the iPhone.

BlackBerry’s advantages have long been security and reliability and, indeed, RIM recently announced that it had won FIPS 140-2 security certification for the BlackBerry 10 platform. But other devices, notably the iPhone, now also offer government-ready security solutions. As for reliability, NTSB says in its document justifying a sole source Verizon Wireless/Apple deal:

This requirement is for the acquisition of Apple iPhone 5 devices. These Apple devices will replace the NTSB’s existing blackberry devices, which have been failing both at inopportune times and at an unacceptable rate. The NTSB requires effective, reliable and stable communication capabilities to carry-out its primary investigative mission and to ensure employee safety in remote locations.

If that’s the way its staunchest customers feel, RIM’s BlackBerry 10, no matter how fabulous, is doomed.

Dumb or Disrupted? The Demise of RIM

Poor, dumb, old RIM

There sure has been an awful lot of talk of late about just how awful things have gotten for poor, dumb, old RIM. Some of the talk is sympathetic: “How could it have come to this?” A lot of the talk is apoplectic: “What is wrong with the players in the mobile industry?” Some of the talk is sad and regretful: “Oh, those poor people in Waterloo, Canada.”

But much of the talk has been downright giddy, spiteful, and soaked through and through with twenty-twenty hindsight.

“RIM,” the critics chortle, “was too arrogant to recognize the dangers posed by the iPhone and Android; too slow moving to react when they finally saw the danger; and too dumb to know what to do when they finally did react.”

“Keyboard loving co-CEO’s Jim Balsillie and Mike Lazaridis got exactly what was coming to them. Their sanctimonious, self-righteous, self-assured, sanguinity finally caught up to them and now they, and RIM, are paying the price for their arrogance and their ignorance.”

Hmm. Maybe. Maybe so. But then again, maybe not.

A Littler Perspective

In 2006, the crown princes of smart phones were RIM, Palm, Nokia and Microsoft. They were smart, successful companies run by smart, successful men.

Today, Palm is gone, Windows Mobile is gone and its replacement, Windows Phone 7, is running in place unable to gain any traction in the market. Meanwhile, Nokia has given up its independence and become a vassal to Microsoft and RIM has one foot in the grave.

Did all of these powerful companies and all of these smart CEO’s suddenly become incompetent and deadly dumb all at the same time? Or did something external happen that made them just look stupid to unsympathetic and unforgiving critics like you and me?

The iPhone Happend

In 2007, the iPhone happened. it’s not like the industry wasn’t watching. But what they saw didn’t scare them at all. It was pretty obvious, even at a cursory glance, than the iPhone was no phone competitor. They were oh so right. But that’s what made what was about to happen so very, very bad. Bad for them, at least.

Market disruption is caused when an innovation creates a new value network. Prior to 2007, smart phones were phones that did a little computing on the side. The iPhone was a computer that that did a little phone calling on the side. RIM, Palm and Nokia were phone companies. Apple, Google and Microsoft are computer companies. When the value shifted from the phone to the pocket computer, the advantage moved from the phone companies to the computer companies.

Palm, Nokia, RIM and Microsoft’s Windows Mobile thought they were safe from another phone competitor – especially one that wasn’t that great a phone and didn’t even come with a keyboard. They were right. But what Palm, Nokia, RIM and Microsoft didn’t realize was they weren’t competing with a phone. They were competing with a pocket computer.

The value chain had shifted. The incumbents were still – successfully – defending the old value chain. But their customers weren’t leaving them for better phones, they were leaving them for better computers. They fact that those computers sent texts, did email and even made phone calls was simply a bonus. The phone makers were blind-sided. The pocket computers were good enough to compete with them. But they had no answer to the superior benefits provided by the pocket computers.

Google

Google (Android) was the first to react. They dumped their RIM-like phone designs and (eventually) created a superb alternative to the iPhone. Their market success is a testament to their flexibility and their programming prowess.

I don’t want, in any way, to diminish the stellar job that Google did with Android, but, in addition to being good, they might also have gotten just a little bit lucky too. (Nothing wrong with that.) Their timing was ideal. Their OS was ready, they hadn’t yet committed to the market and when the newly minted iPhone arrived on the scene, the Android team pivoted on a dime and took advantage of a gap in the market and what turned out to be a golden opportunity.

The stuff of champions.

Palm

Palm was the next company to see the writing on the wall. They ditched their existing OS and went all in on webOS. Unfortunately for Palm (and perhaps for us all), they didn’t have the resources to sustain their efforts. They ran out of money, ran out of time and they ran out of chances.

(I’m not going to rehash their second chance with HP. Too painful.)

Microsoft

Microsoft was the next company to see the light. We can mock Ballmer all we want for initially laughing at the iPhone but once Microsoft decided to act they acted decisively. Microsoft unceremoniously dumped Windows Mobile and entered into a massive effort to create the wholly re-imagined Windows Phone 7.

Their reward? A tiny sliver of the market and no traction whatsoever. All of Microsoft’s business connections and all of their resources couldn’t buy them back into the market. Most didn’t know it at the time, but the window of opportunity to climb back into mobile phones that were really pocket computers had already closed or was closing fast.

Nokia

Nokia was the next to see the light or, in their case, they were next to see the “burning platform”. Ex-Microsoft executive Stephen Elop shoved Nokia off the platforms that were Symbian and MeeGo right into the icy waters that are Windows Phone 7. Their efforts, not unexpectedly, were met with a chilly reception. Nokia isn’t sunk yet but they may be going down for the third time. If circumstances don’t throw them a life preserver soon, we’ll be writing requiems for them next.

RIM

RIM was the last to have the scales fall from their eyes. And while it’s true that RIM’s co-CEO’s kept us all constantly entertained with their oh-so-dumb,-we-obviously-don’t-get-it quotes, it was probably over for them long, long ago.

If it was already too late when Palm tried to make the switch; it if may have already been too late when Microsoft tried to make the switch, what chance did RIM’s belated efforts really have?

Not an Excuse, but an Explanation

It may be true that RIM was arrogant, RIM was slow to change and RIM made some bad choices. But if you had been in their shoes, you too may well have followed the same path that they did.

In 2007, RIM was a bastion of strength and the iPhone was an impudent interloper. Go back and read the commentary from the time and you’ll see that even as the iPhone started to catch on and even as Android started its meteoric rise, RIM’s future was assured.

RIM had an impenetrable moat built around their business. BBM’s instant message service and RIM’s security gave RIM two unique and competitor-proof features. Customers adored (and still adore) using RIM’s BlackBerry phones for texting and emailing. And business and government entities were never going to give up their CrackBerry’s and the airtight security that came with them.

For RIM to have changed in 2007, 2008 or even 2009 would have seemed like madness. Why abandon one’s strengths to chase a chimera? Let consumers play with their Apple and Android toys. Real phone lovers loved to do real work on real phones like the RIM BlackBerry. And RIM’s loyalty and sales retention were second to none. They didn’t call those phones “Crackberries” for nothing.

Requiem for RIM

We can make fun of RIM and their codependent CEO’s all day long or – maybe, just maybe – they deserve our understanding instead of our derision. Maybe, instead of mocking RIM, we should be whispering a silent prayer of thanks that Apple didn’t come into our back yard and disrupt our business and make us all look as dumb as a box of rocks.

Was RIM really dumb or were they doomed from the get go? The iPhone and the Android phones were pocket computers. Apple and Google and later Microsoft were computer companies with tons of experience in creating computer software and computer operating systems.

RIM was a phone company that did computing on the side. Compared to Apple and Google, they had little experience in computers and computer operating systems. They would have had to abandon their roots, toss out everything they knew and chose to compete with computer companies on their terms, all while their current business model was still, not only viable but, very successful and profitable as well. When you think of it that way, it’s asking a awful lot.

Conclusion

Maybe RIM did wait too long. Or maybe their so-called window of opportunity never really existed in the first place. When the iPhone first appeared, RIM could have tossed everything that had worked for them in the past and chased a device that, by all rights, was sure to fail or, at best, become a niche product. They could have done that. But most likely, RIM never really had a chance at all. They were finished that moment, in January 2007, when Steve Jobs lifted the iconic device over his head and declared: “…and we call it..iPhone!”

How RIM Changed My Life

During the summer of 1997, I was contacted by the folks at RIM and asked if I would like to be a beta tester of their first Blackberry pager/email device. Up to then, pagers were the darlings of the mobile world but their key function was to send a phone number to the user if needed and then the user would have to find a phone to call them back. Although cellular phones were already on the market, they were still pretty pricey back then and most people who got paged had to find a land line to make any call backs.

However, there was one technology that had already gained a major foothold in business by then and that was email. But the only way people could get their email was to go to their desktop or laptop and log on to see what messages they had. And while consumers were also discovering email via AOL, Compuserve, MCI and a few other consumer services, email had started to become the lingua franca of business. In fact, as an analyst working strictly within the tech industry, all of our clients were heavy email users and by then we were doing most of our communications via email instead of the plain old telephone system. (POTS)

However, for a lot of business professionals, email was a two edged sword. While it was a very productive tool if people were at their desktops or laptops and plugged into the corporate network or connected to their email via dial-up services, it was worthless to any one that was away from their offices or homes. And even if they had their laptops with them on the road, back then we were not assured that we could get a connection to our email from our hotel phones given the sorry state of hotel phone systems then. In fact, I carried with me an acoustic coupler that had alligator clips on them and in more then one hotel around the world I would have to take the cap off the telephone’s wall connection and use the alligator clips to tie into the hotel phones systems to get a dial tone to make a connection since most phones did not have an RJ 11 phone plug on their phones in those days.

So when RIM showed me their first Blackberry and told me that I could have a wireless connection to my email, I jumped at the chance to be a very early tester of their services. And from that day on, my personal world of communications took a major leap forward and to be very honest, my life changed significantly. No longer was I tied to my desktop or laptop to get or respond to email and this was a very liberating experience. More importantly to me was the fact that email had become the lifeline to my clients and it now meant that I could get their messages to me anytime and respond to them in real time very quickly. And from an economic standpoint, this one thing helped my business increase as I became known for my personalized service to the clients and the fact that I was extremely responsive to their needs.

Opening up the world to mobile email was what put RIM on the map and their forethought and innovative thinking has had a dramatic impact on our business world. They pioneered wireless email for broad commercial use and it literally became one of the most important tools any business professional had in their bag of tricks. And because their back-end servers were so secure, it became the standard wireless mobile email device for most government agencies and those in the financial markets and as a result, the fortunes of RIM skyrocketed. Apple and any of the smartphone players today should be very grateful to RIM for this major contribution they made in blazing the trail for what is now smartphones and the many advanced services that have many of their roots in things that RIM did with their original Blackberry.

But it is these roots that should have been their guide when trying to drive the company and the Blackberry devices forward. While they owned the corporate market, their decision to try and make the Blackberry all-things-to-all- people is what really has caused them to be in a most difficult position today. That, and not keeping up with the technology consumers really wanted in a smartphone. By branching out and trying to bring the same features to consumers in the basic form factor that business users loved, they missed the major move to touch based smartphones. Instead they are now playing catch up with the more consumer-focused vendors like Apple and Samsung who understand consumer mentality and designed their products with this as their primary goal.

Even worse for RIM is the fact that while expanding their consumer range of products and putting so much emphasis on marketing to this user segment, they took their eyes off the corporate market they owned. And as a result, thanks to the major bring-your-own-device (BYOD) programs being implemented by their corporate customers, consumer centric smartphones like Apple’s iPhone and Samsung’s Android smartphones have encroached dramatically on their business territory and in the end, RIM is now losing in both market segments.

RIM’s new CEO pretty much admitted this mistake when he announced last week that they would shift their focus from the consumer market and concentrate on their corporate business. Of course, this is the right thing to do, but it should have been done years ago and at this point in time, I am not really sure this will bring the company back to health. And it is real shame to sit and watch what has been such an important company decline and struggle to even stay afloat given the competitive landscape today.

But for me, RIM will always be one of the most important companies in my own personal technology history. For over a decade, my Blackberry and I were attached at the hip, so-to-speak, and it was my lifeline to my family, friends and clients. And I did not give it up easily. It took a radical new design and approach to make me give up my Blackberry and had not the iPhone come along and completely revolutionized the smartphone market, it would probably still be my sidekick today.

I am not sure what will happen to RIM in the long run, but for many of us techies, RIM will always represent innovation and foresight and the one that introduced us to a new age of mobile and wireless technology. And for that, everyone working in the mobile and wireless world owes them a great deal of gratitude.

What Intel Must Demonstrate in Smartphones (and soon)

Intel made a big splash at CES 2012 with the announcement that Motorola and Lenovo committed to Intel’s Medfield smartphone solution. This came on the heels of a disappointing break-up between Intel and Nokia as well as a lack of previous traction with LG. While Intel has come farther than they have ever come before with one of their X86 SOCs, they still have a long way to go to claim smartphone victory. Of course Intel knows this and is working diligently and sparing no expense. The biggest challenge Intel faces is attacking a market where the incumbent, ARM ecosystem partners Qualcomm, NVIDIA, and Texas Instruments have almost 100% market share. To start gaining share in smartphones, Intel must demonstrate many things in the near future.

More Design Wins with Key Players

The Motorola announcement was impressive in that Moto has a respected name in smartphones, but they won’t carry Intel that far alone. Lenovo is an even smaller player and while very successful in PCs, hasn’t been able to secure a lot of smartphone market share even in their home country, China. Intel knows they need a few more partners to start chipping away at market share and I expect them to announce at least one at this year’s Mobile World Congress.

One of the challenges is that many of the top players are already locked-in in one way or another, Intel has some negative history with, or has rapidly declining share. Apple already has their own A-Series SOC, Samsung has Exynos SOC, and Nokia rebuffed Intel last year and is clearly locked into ARM and Microsoft for the time being. RIM as a partner is a shaky proposition and HTC is an aggressive player but is recently dropping share. That leaves lower smartphone market share holders LG, Sony, Sharp, NEC and ZTE in the short term.

Longer term, I don’t expect Apple or Samsung to get out of the SOC business because they have been successful with their own strategies. I cannot see Nokia or Microsoft motivated to drive a change or provide dual support for X86 until Windows 9. RIM is in a free-fall with no bottom in sight. Intel is forced to take the long-term approach as they are with Lenovo by developing smaller smartphone players to become larger ones. ZTE certainly is a good long term prospect as is Huawei. If Intel can leverage their PC franchise with them I could see them being successful.

Relevant, Differentiated, and Demonstrable Usage Models

In fighting any incumbent, the new entrant must provide something well above and beyond what the incumbent offers to incent a change in behavior. I am assuming that Intel won’t lead in low price or lowest development cost, so they must offer handset makers or the carriers a way to make more money or get consumers to demand an Intel-based smartphone. Regardless of which variable Intel wants to push, they must devise relevant, differentiated and demonstrable usage models that ARM cannot.

By relevant I mean that it must be fixing a known pain point or creating a real “wow” feature consumers never asked for, but is so cool it cannot be passed up. One pain point example is battery life. Battery life is simply not good enough on smartphones when used many times daily. If this weren’t true, car chargers and battery backs wouldn’t be so popular. Wireless display is useful and cool but not differentiated in that Apple can enable this via AirPlay. Demonstrable means that it must be demonstrated at the store, an ad, or on-line on a web site. If something isn’t demonstrable then it may as well not exist.

I would like to see Intel invest heavily in modularity, or the ability to best turn the smartphone into a PC through wireless display and wireless input. Yes, this is dangerous short-term in that if Intel does a great job at it then they could eat into their PC processor franchise. But, this is the innovator’s dilemma, and a leader must sacrifice something today to get something tomorrow. I could envision an Intel-based emerging region smartphone that enables PC functionality. ARM cannot offer this well today but will be able to in the future with their A15 and beyond-based silicon. Intel should jump on the modularity opportunity while it lasts.

One other opportunity here is for Intel to leverage their end-to-end experience from the X86-based Intel smartphone to the X86-based data center. If Intel can demonstrate something incredible in the end-to-end experience with something like security or a super-fast virtualized desktop, this could be incredibly impactful. One thing that will be with us for at least another 5 years is bandwidth limitation.

Carrier Excitement

Outside of Apple, the carriers are the gatekeepers. Consumers must go through them to get the wireless plans, the phones, and most importantly, the wireless subsidy. Apple’s market entry strategy with AT&T on the iPhone was a strategic masterpiece in how to get into a market and change the rules over time. Apple drove so much consumer demand for iPhones that the carriers were begging Apple to carry the iPhone, the exact opposite of the previous decade.

Intel must get carriers excited in the new usage models, bring them a new stream of revenue they feel they are being cut out from, or lower their costs. Intel doesn’t bring them revenue from content side but could I can imagine Intel enabling telcos to get a piece of classic retailer’s PC action once “family plans” become a reality. While telco-distributed PCs weren’t a big success in the past, this was due primarily from the absence of family data plans. I can also imagine Intel helping telcos lower the costs of their massive data centers with Xeon-based servers. Finally, if Intel could shift traffic on the already oversold “wire” by shifting processing done in the cloud and onto their SOCs, this would be very good in a bandwidth-constrained environment.

Competitive Handset Power

At CES, Intel showed some very impressive battery life figures for Medfield handsets:

• 6 hour HD video playback

• 5 hours 3G browsing

• 45 hour audio playback

• 8 hour 3G talk time

• 14 day standby

This was measured on Intel’s own reference platform which is somewhat representative of how OEMs handsets will perform. What will be very telling will be how Medfield performs on a Tier 1 handset maker, Motorola when they launch in Q3 2012. There is no reason to think the Moto handset won’t get as impressive battery life figures, but Intel could gain even more credibility by releasing those figures as available.

When Will We Know When/If Intel’s Smartphone Effort is a Success?

Intel has slowly but surely made inroads into the smartphone market. Medfield is impressive but competing with and taking share from an incumbent with 99%+ market share is a daunting task. The easy answer to measure Intel progress is by market share alone but that’s lazy. I believe that Intel smartphone efforts should first be measured by handset carrier alliances, the number of handset wins, the handset quality and the new end usage models their SOCs and software can enable. As these efforts lead to potential share gain does it make sense to start measuring and scrutinizing share.

The RIM Story: In Praise of Mike and Jim

Micke Lazaridis photo — Michael Lazaridis

The departure of Research In Motion co-CEOs Michael Lazaridis and Jim Balsillie was, as amply noted by just about everyone, long overdue. Given the shipwreck that RIM has become, it’s understandable, but more than a little sad, that the coverage has paid so little attention to what Mike, Jim, and RIM accomplished during their glory years.

More than any other company, RIM mobilized business, first by offering the first truly practical two-way messaging device, then by providing enterprises a reliable and secure way to get messaging onto mobile devices.

In my years of reviewing gadgets, the original BlackBerry 850–a two-way pager–was one of the few that I fell in love with at first sight. The concept of a two-way pager was not new; there were products on the market from Motorola and others. But the original 1999 BlackBerry had a keyboard you could actually use to type a message, a keyboard unsurprisingly similar to the ones found on current BlackBerry models. And RIM offered a straightforward way to get mail from a Microsoft Exchange server to the BlackBerry.

That service evolved into the BlackBerry Enterprise Server, a powerful tool for companies to move mail, secure Web browsing, custom apps, and instant messaging onto mobile devices. Security was built in from the beginning, so BlackBerry’s developed a massive following in government and in the heavily regulated finance and health care industries and made RIM a massive success in the last decade.

The recent sins of RIM’s management are large. They failed to respond adequately to the iPhone, the app revolution, and the consumerization of mobile. Microsoft’s steady improvements to Exchange ActiveSync gradually ate into BlackBerry Enterprise Server’s advantages, and Apple’s quiet work with Microsoft to enable secure Exchange mail on the iPhone allowed iPhones to displace BlackBerrys.

But while it is easy to blame Jim and Mike for their failings, we should not forget their accomplishments. They played a huge part in making the mobile industry what it is today.

Why Microsoft should buy RIM

Three years ago, in my annual prediction list, I said that Microsoft would buy RIM. However, I also stated that this was a very wild prediction that I doubted would happen.

Last week, All Things D wrote a piece that said Microsoft and Nokia had discussed jointly buying RIM but that the talks did not go anywhere.

But if you think about it, Microsoft owning RIM, especially their customer base, makes a great deal of sense. At the moment, Microsoft’s Windows Phone is basically designed for the consumer market and has little traction in corporate offices. In fact, Apple’s iPhone is eating Windows and RIM’s lunch in smartphone enterprise deployments. And while Google and their partners who have Android smart phones are taking aim at the enterprise, their acceptance in this market has been weak up to now.

But RIM’s assets still carry significant value in the enterprise. From their secure servers to their BBM messaging service, RIM still has serious technology that draws great interest from the corporate set. But, RIM is at a major junction in their history. If they are to have any chance of growing their business, they must move their customer base from its existing Blackberry OS to one that is much more powerful and will meet the needs of their business users as smartphones get smarter. To that end, they bought QNX and are planning to migrate to this smartphone OS by sometime in 2012. But here is the rub for them. Besides being very late to the market and having only a minor ecosystem of apps and services to work with now, the investment needed to get software developers to write apps for QNX will be very steep. And given the fact that developers are already backing iOS, Android and Windows Phone 7, it will be a tough sell as well.

In the mean time, Apple’s iOS and Android’s ecosystem that targets the enterprise is rising fast. And even though most of the apps written for Microsoft’s Windows Phone are consumer based, Microsoft too has their eyes on the corporate market.

In my viewpoint, the chance that RIM can be successful with their strategy, given their lateness in providing a powerful smartphone OS for their business users and what it would take to get software developers to back it is marginal at best. And although their market value has taken a big hit over the last three quarters, I doubt that it will recover given the difficult position they are in considering the current competitive smartphone climate.

Consequently, this is a perfect time for Microsoft to make a serious attempt at buying RIM and use this to jumpstart their enterprise smartphone business. Interestingly, the idea of Microsoft using RIM to counter Apple’s iPhone move into the business market was at the heart of my wild prediction 3 years ago.

While RIM has been trying to move QNX into their business smartphones and getting software developers to support it with minimal success to date, Microsoft could instead move very quickly to marry their Windows Phone 7 architecture to replace RIM’s QNX. Then they tell their current Windows Phone 7 software developers that it is now time to begin writing powerful business apps for this smartphone platform. I say quickly but I realize this would take some serious software engineering to make this happen. However, Microsoft’s smartphone OS is very stable and already has strong developer support and a move like this could make Microsoft a serious player in enterprise smartphones almost overnight.

So, will this happen? Probably not. RIM’s management seems determined to try to save the company with QNX and hoping to get developers to support them. Good luck to them but in my view, that ship has passed.

But it sure would be interesting if Microsoft did buy RIM and tap into their loyal customer base and over time move all of them to Widows Phone 7. In fact, it may be their only hope of gaining any ground on Apple in the enterprise and keeping Android at-bay in business as well. And while it would be risky, the upside of owning RIM’s customer base and transitioning them WW to Windows Phone could be huge. I am sure that is what Microsoft and Nokia were thinking about when they discussed this idea recently.

But given RIM’s managements current position, it seems likely that this will never happen, even though it would be best thing for both of them.

BlackBerry Mobile Fusion May Be RIM’s Future

The flood of iPhones, iPads, and Androids into corporate offices is destroying BlackBerry’s once dominant position in the enterprise. In a bold if-you-can-lick-them-join-them move, Research In Motion is striking back with BlackBerry Mobile fusion, a software and a back-office package that promises to bring BlackBerry-like security and manageability to competing hardware.

This may be an obvious move for RIM, but it is not an easy one. The company’s DNA–and the heart and soul of co-CEO Mike Lazaridis–is in hardware. Previous efforts to bring BackBerry functionality to third-party hardware, such as BlackBerry Connect for Nokia and Windows Mobile, were half-hearted at best and went nowhere. But RIM today is threatened with irrelevance and needs a desperate move to get back into the game. And the may be a secret agenda behind Fusion: It could be the solution to bringing full BlackBerry services to the troubled Playbook tablet and the new generation of handsets based on RIM’s QNX operating system.

Fusion may offer an attractive solution to IT managers, especially in Microsoft Exchange shops, bedeviled by users demands that they be allowed to use the smartphone of their choice for business. Of the alternatives to BlackBerry, currently only iPhone comes close to providing full support for Exchange, including a wide range of security policies. There are third-party solutions for Android, such as Good Technologies BlackBerry-like server-based system or NitroDesk’s TouchDown app, which provides support for a variety of Exchange-based mobile device management systems.

The big advantage of Fusion, if it delivers on its promises when it is released next March, is that it runs on top of the existing BlackBerry Enterprise Server and gives IT managers a single platform they can use to manage a variety of devices: BlackBerrys, iPhones, iPad, and Android phones and tablets. All of the existing third-party offerings require some sort of multi-server infrastructure to support all devices.

There’s also a curious little note in the fusion announcement that may hint at a broader role for the software:

RIM has clearly been having a very difficult time making the QNX-driven PlayBook work properly with BlackBerry Enterprise Server, a fact that helps explain the crippling lack of native mail, contact, and calendar apps on the device. The Fusion language still doesn’t promise full BES support for the PlayBook, but is definitely moving in that direction. A similar solution might help RIM bring BlackBerry services to its forthcoming QNX handsets.

All of this, of course, is a double-edged sword for RIM, because the better Fusion is, the more damage it may do to the company’s fading handset business. But long term, RIM’s only path to survival may be as a provider of managed services for enterprise mobility. That would be a sad comedown for a company that once dreamed of dominating the consumer smartphone business, but it may be all that’s left.

Is it Time for RIM to be Acquired?

The short answer is yes. And it seems like RIM’s investors are starting to chime in and suggest the company look for a suitor.

The technology industry landscape has changed drastically in the last few months. I have written in a number of our reports why we believe that in this new landscape some companies will be better suited to compete together rather than alone. I believe RIM is one of these companies who alone will most likely fizzle into nothingness.

In my column at Techland which is the tech section of Time.com, I explained all the things RIM needs to do if they want to stay relevant in the future. The one point i’ll now add is to be acquired. The main point being that RIM is not a consumer company.

They do not have the DNA to make, market and sell products to consumers. As a matter of fact I think the industry is learning that there are very few companies who do have the DNA to make, market and sell products to consumers.

I believe RIM has the DNA to make, market and sell products to the enterprise. Now we can debate that the consumer-ization of IT could impact any company only selling to enterprises, but that is for another time.

I firmly believe that if RIM is to stay relevant they need to focus on building hardware, software and services specially designed for the business class.

So then the question is who should acquire RIM? Well there is another company who I believe does not have consumer DNA, who is still in the hardware business, and who plans to focus more on the enterprise – that company is Dell. Dell should buy RIM.

Dell’s attempts at smart phones and tablets have yet to become market successes. The company needs help expanding its mobile footprint as a part of the overall Dell solution. Dell is a solutions company and they think like a solutions company. Mobile is a critical part of the Dell solution and the bottom line is they need help.

I believe DELL and RIM are a classic example of two companies who are stronger together rather than separate. With’s Dell’s market cap at just over $25 billion and RIM’s just over $15 billion this would be more of a merger than acquisition.

The real question is whether or not Michael Dell has it in him to do a deal like this. There is uncertainty how competitive an HP spinoff of the PC business could be and this makes for an interesting variable from Dell. Dell’s real concern however should be companies like Samsung and Acer who will be able to compete with them on price.

If Dell bought / merged with RIM I think the two companies could orient themselves to be extremely competitive in the enterprise solutions space. Enterprise is not the sexiest of business’ but it is better than having no business at all.

Should the Media be Proclaiming RIM’s Death?

Over the past few weeks i’ve been reading a number of articles from the big media outlets all proclaiming the death of RIM. Most of these articles are pretty grim and their headlines say it all. I have nothing against a good or controversial headline its more the content of the article i’m interested in. What i’ve noticed is the content of these articles being fairly negative on RIM don’t really offer much helpful insight for either the consumer or RIM itself.

Two articles in particular this week are examples of what I mean.

BGR: Inside RIM: An exclusive look at the rise and fall of the company that made smartphones smart

All Things D: Bring Out Your Dead: Is Research In Motion The Next DEC?

So what I am wondering is what the role of the media should be in a situation like this where a company is struggling. Given that the media is extremely influential and actually does affect the mind share of consumers, it seems that if all the outlets go around saying RIM is dead, consumers will believe it and write them off no matter how good any future products may be.

Perhaps it would be more helpful if these articles contained a balance and point out what has gone wrong but offer helpful suggestions on what RIM could do to remain competitive. The result would be that the market may not write RIM off entirely and instead look to see if RIM responds to the helpful insights to the media, using the media to their advantage, and still have a shot at competing.

Too often it seems like the media is powerful enough to claim a companies death, thus affecting the mind share of investors and consumers and in return create a self fulfilling prophecy where the company actually does disappear.

Now i’m not saying the media does not always write negatively. In fact a number of good articles have come out that do offer helpful suggestions. I simply believe they are more rare than the norm. A few examples:

In BGR’s Open letter to BlackBerry bosses: Senior RIM exec tells all as company crumbles around him the letter itself contains helpful insights and suggestions.

Even though we are analysts not journalists Tim and I have also covered the topic.

Tim Bajarin wrote one for PC Magazine called What RIM Needs To Do To Survive that offered a number of suggestions for RIM.

And in my article last week for the tech section of Time.com I wrote about The Tragic Decline of BlackBerry and offer some insights as well on how to turn it around.

The bottom line is I would like to see more competition and consumer choice than less. I know negative news drives traffic but what i’m hoping is that there is a balance. I’d love to see the media also use its influence to do all they can to help struggling companies better compete going forward.

Again it comes back to my original question. What should the role of the media be when a company is down?

A Sure Sign of Real Trouble at RIM

The senior Research In Motion executive who chose to vent his (or her) frustration in a open letter to Boy Genius Report may not have chosen the most graceful way to make those views known. But the writer may well have exhausted other means of communications. Certainly, RIM’s response suggests strongly that the increasingly troubled company’s leadership still isn’t hearing what it needs to hear.

The fact is that the open letter was an accurate analysis of the challenges facing RIM and was full of generally very good advice. The response is dismissive and described RIM’s current situation as a time when it is “necessary for the company to streamline its operations in order to allow it to grow its business profitably while pursuing newer strategic opportunities” after “a period of hyper growth.”

Streamlining and, above all, focus is exactly what the letter writer argued for. Mike Lazaridis and Jim Balsillie should give it another read with more open minds.