Reports say RIM may be on its last legs, but we aren't writing them off just yet.
Research In Motion (RIM), makers of the BlackBerry and the PlayBook, has announced that the slump in sales and profits that they experienced in the first quarter of this year is continuing into the second. In a press release, Jim Balsillie, RIM’s chief executive officer said, "Fiscal 2012 has gotten off to a challenging start." That is one way of putting it, I guess.
Why is a company that so recently completely dominated the government smart-phone market now having problems and announcing layoffs? Well, there are several reasons.
Probably the most likely is the influx of new products into RIMs bailiwick, the smart phone. At the same time, RIM has ventured into a new market, the “tablette,” (copyright: me, remember?) which has been dominated by other companies for a year now.
It’s as though RIM got really good at keeping certain plates spinning, but other people are now joining the circus and knocking RIM’s fine china down in order to start spinning their own plates. So RIM responds by trying to spin even more new plates, but these new plates are oblong and take a slightly different skill set to keep going. Oh, and don’t forget the parade of tigers that are battling fire and sharing the same stage, which in this metaphor represent the overall lackluster economy in this now-overkill of an analogy.
Then there is the announcement that the BlackBerry Enterprise Server (BES) will soon support third-party devices, such as iPhones and Android-OS phones.
This will likely have a mixed effect on sales, in my opinion. On the one hand, RIM will no longer force organizations who want the management capabilities that BES provides to exclusively use BlackBerry phones. However, it opens up potential sales of BES to organizations that have a mix of smart-phone brands and haven’t seen the practicality of centrally managing only some of them.
But possibly the biggest contributor to the continued decline in sales was the news that there will be a delay in the rollout of new RIM products with the re-tweaked OS. In its press release, RIM states that the new products are currently slated for “the very late part of August.”
This means that these new models will likely miss the vital back-to-school sales period, and will be cutting it close to the end of the government fiscal year. If RIM misses this window, who knows where its sales will end up?
The picture might look pretty bleak, but I doubt it’s the end for RIM, which is still a fixture in business and government, and has plenty of loyal users. Despite its current woes, I suspect the show will go on, and RIM will be around for quite a while.