Tag: The Daily Techpinion

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.

The Case For (and Against) a Cheap iPhone

There’s been a fair amount of buzz in the last few days about Apple introducing a cheaper iPhone this fall and in “The iPhone Is Too Expensive” at Slate, Farhad Manjoo makes a good case for Apple doing just that. But I seriously doubt that Apple will do so because, while the arguments for going downmarket make sense for any other manufacturer, that just isn’t how Apple works.

It seems to me that the surest way to go wrong in anticipating an Apple move, and I have done this often enough myself, is to assume that the company  gives a damn about market share. Apple is driven by margin and total profits, not by share, and this strategy has made it by far the most successful consumer electronics company in the world.

Yes, Apple could do a de-featured iPhone that could sell for $200-$250 without a contract and compete with a horde of generic Android handsets. It would undoubtedly increase Apple’s market share, especially if it was sold with prepaid service. All Apple would have to do is accept tiny margins and sell a product that the company knows isn’t as good as it could be. That just isn’t in Apple’s makeup.

Instead, I expect they will bring out a new iPhone in September (I’m guessing about the date, like everyone else) and keep the iPhone 4 in the lineup at a sharply reduced price. (A year after the introduction of the iPhone 4, you can buy an iPhone 3GS from the Apple store for $49. How much cheaper do you want it?)