The problem with RIM

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60 Responses to “The problem with RIM”

  1. Rich says:

    “After all, does anyone remember that company that got raked over the investment-press coals some years back named Apple?”

    Absolutely! Then Steve Jobs returned, they began building products that people wanted and the rest is history.

    • aelfscine says:

      So does that mean that if Steve Jobs does indeed die from cancer that Apple just resumes bobbing listlessly in the water, so to speak? *One guy* is the only thing keeping them viable?

  2. LostInTime says:

    Anon has a good point about the financials

    Revenue (Mil USD):
    2011 19,907
    2010 14,953
    2009 11,065
    2008 6,009

    Balance sheet it’s the same story, very healthy.

    My question is how the hell are they doing it on products that most of us wouldn’t touch with a barge pole. The stock price and this conversation reflects our gut feelings that they are in deep trouble, by the time this shows up in the figures it will be too late (if it isn’t already).

    PS Can I encourage the use of the word fuck mainly in relation to Mr Murdoch not every story.

    • cheem says:

      RIM has lost ground in NA/Europe, ’tis true. But in South Asia and SE Asia, it’s a different story. BBs are also still regarded as status symbols in Africa, for what that’s worth. All this gives RIM time to adapt. Whether or not they do that is an open question.

      Bear in mind also that RIM is the only mobile device manufacturer that provides a way to centrally manage their devices at a corporation. Apple is trying to negate that advantage with the next iteration of OS X Server, but odds are they’re going to mess that up (based on their past record with new technologies and OS X releases) and won’t get it right until OS X Ocelot/Silver Tabby/Ragdoll. Android is never going to be able to be centrally managed from an server… they have enough issues trying to get OTA updates synced for crying out loud. All of which means BB still has a place in the hearts of the paranoid IT department.

  3. Djinn PAWN says:

    I always thought RIMs problem was that they tried to make the BB oh-so-sexy like an iPhone, when all along they should have been zeroing in on the corporate sector and long term government contracts.

    Your boss gets you a BB for one reason – the electronic leash – answer my e-mails on lunch, at home, before you go to bed. That’s it.

    RIM should have gone to the big organizations and said “you want us BECAUSE we’re not an iPhone. Get our device so your employees won’t waste time dicking around on Facebook on your data plan”

    They should have kept their eye on the ball – secure work e-mail, easy to admin, no pictures of someone’s ass showing up from their corporate account from the on-board BB camera.

    Instead RIM want the BB to be just like the device that it can’t be because it’s already available, in many versions, just oh-so-sexier.

  4. Xof says:

    Shorter: “When our stock price is high, that’s the most important metric for judging our corporate performance. When it is low, it’s irrelevant. Why is that so hard to understand?”

  5. Kimmo says:

    Forbes’ article.

  6. Anonymous says:

    The problem with RIM is the same problem Ford and GM had in 2007, they simply weren’t making things people actually wanted.

    RIM too, is not making a *bad* product, it’s just not the product customers want to pay for right now.

    Acknowledge what the market wants and the profits will come back.

    • Anonymous says:

      Well said. Palm slept, Nokia slept, and RIM is sleeping while Apple and Google are working nonstop to take their products to the next level and entice buyers. It’s competition. Nobody owe RIM anything, and they seem to not understand that.

  7. tlwest says:

    I always thought RIMs problem was that they tried to make the BB oh-so-sexy like an iPhone, when all along they should have been zeroing in on the corporate sector and long term government contracts.

    RIM followed your strategy of pursuing business/government, and followed it *successfully* (those massive revenues numbers quoted above come from somewhere).

    However, RIM is now in the cross-hairs because owning all business smartphone use is no longer good enough, and more ominously for RIM, a massive push by iPhone consumer users to use them for business is pushing IT departments to reluctantly allow them.

    It’s not that RIM lost its market – it’s that RIM’s market is being eaten by consumer phone usage.

    • Djinn PAWN says:

      “I always thought RIMs problem was that they tried to make the BB oh-so-sexy like an iPhone, when all along they should have been zeroing in on the corporate sector and long term government contracts.”

      “RIM followed your strategy of pursuing business/government, and followed it *successfully* (those massive revenues numbers quoted above come from somewhere).”

      I knew that, my mistake – I should have said “…when all along they should have KEPT zeroing in on the corporate sector and long term government contracts.” Instead now it seems like they want to abandon that strategy and sell BBs to 14 year olds.

      • tlwest says:

        Instead now it seems like they want to abandon that strategy and sell BBs to 14 year olds.

        Agreed, but I think that’s because they learned (to their horror) that (grossly simplifying), you’re a has-been if you own the business markets, but don’t own the 14-year old market.

        Worse than that, unlike Microsoft, which is another company that owns the business market but is becoming a stock-market has-been because they only make buckets of money but not in a really exciting way, the segment that RIM owns could evaporate because businesses are being pushed hard by their employees to allow the cool phones, even if it less apropos for business.

        And given that even the Boss wants to appear cool, there’s pressure on IT departments from above and below.

        It really appears that in the phone market, going for the business-only, no-nonsense market is a losing strategy. (Note, before I get mugged by iPhone lovers, this is about perception. It’s not that the iPhone isn’t an adult tool – it’s that the push to use it is mostly coming from people who want to be able to use their business phone for fun as well.)

  8. Ignatzhomenez says:

    To Anon who works/worked at RIM: Basille may be a corporate psychopath, but coming in for a special speech by your CEO one day a year at 8am doesn’t indicate that. Neither does the comment that the parking lot is empty at 6pm. Those innovators at Google and Apple that people are holding up don’t strike me as 9-5′ers (what’s that story from Apple’s early days, “80 Hours a Week and Loving It”?)

    This is a big problem in Canada and a major reason we lag in terms of productivity – we just don’t work that hard. People want a job which affords them a car which starts at $45,000 for a base model, and then work on salary where they are not the innovator or the risk-taker who made the company, then will grumble to their bosses that they might have to keep 8-6 hours sometimes, and THAT is your basis for calling Basille a psycho? Sorry, but I kind of agree with him on these points.

    Many (most) people who work for others but command decent salaries put in major hours. That’s the bargain. Lawyers, accountants, professionals of almost any kind, senior management of any company, etc. And I’d wager the creators of those businesses put in a whole lot more as well.

    People don’t realize how good they have it.

    PS – I think Basille is a corporate psychopath, but for many other reasons.

  9. phisrow says:

    While the performance of our dynamic duo from the frozen north is increasingly pathetic, I suspect that some of the sheer tactical ineptness that comes out during interviews must reflect a degree of actual psychological angst on their part.

    While they obviously won’t end up crying themselves to sleep in a cardboard box or anything, I suspect that watching their baby getting absolutely slaughtered by trends they were too blind to see coming must be pretty harsh…

  10. Jake0748 says:

    Asshats. Trying to cover their asses. Errr hats. Or something. They are doomed… to bad.

  11. dole says:

    RIM’s death knell was the sound of the G1 and Android hitting the market without a major upgrade or replacement to the already antiquated Blackberry OS.

  12. Ambiguity says:

    He growled: “Nobody ever wrote us letters saying thank you for the first $20 billion in revenue.”

    You know, they probably made some pretty big strategic errors (or not, I have to admit smart phones bore me and I don’t really follow the industry), but I think he has this backwards. Wall Street is fickle and changing — it’s kind of like middle school. One minute your everyone’s darling, and the next no one will talk to you.

    I think RIM spent a lot of time as Wall Street’s darling, and I think they’re high stock price was a “thank you for the first $20 billion.” And now they’re experiencing the “no one will talk to you phase.” Seems to me that they’ve got to experience both.

    Honestly, if I had a bit of money I wanted to move into the market, I’d actually consider RIM, if for no other reason that they’re so much “piling on” in the press, it makes me feel a little contrarian. Whenever the press starts beating up on some viable company just because, it seems, everyone’s doing it, it makes me wonder what they’re missing.

    After all, does anyone remember that company that got raked over the investment-press coals some years back named Apple?

    • Anonymous says:

      Apparently high stock prices and making fistfuls of money aren’t thanks enough for our poor impoverished CEO’s.

    • Anonymous says:

      Does RIM have a Steve Jobs in the wings? Don’t know, but hope so, for their sake.

    • emmdeeaych says:

      Whenever the press starts beating up on some viable company just because, it seems, everyone’s doing it, it makes me wonder what they’re missing.

      A company with millions of customers and a contracted revenue stream is not, by definition, viable if their business model and ability to succeed are predicated on growth into what is already a filled marketplace.

      Everyone who wanted a blackberry got one, as well as a couple million people who absolutely did not want one but got bought one for work because their boss wanted one.

      In fact, everyone I know who was raving about their blackberry 3 years ago now has an iPhone, and liks it. I think blackberry is just a gateway phone.

      • Ambiguity says:

        Everyone who wanted a blackberry got one, as well as a couple million people who absolutely did not want one but got bought one for work because their boss wanted one.

        There is something to be said for that. From an IT perspective, Blackberry is the best choice for an enterprise environment. Android and iOS are not yet ready for the Enterprise.

        But the catch is: they’re close. iOS has made some pretty big improvements as of late, and once they get centralized software management in place, the iPhone will probably be a viable enterprise phone.

        So really, that’s the challenge for RIM. They’ve been riding the corporate client wave and it’s been good for them, but their virtual monopoly is ending shortly. Can they transition as a competitive player in both the personal and enterprise market? I don’t think anyone knows, but if they can’t they will become just a name in the history of the smartphone.

        So they have a Steve Jobs in the wings? I don’t know, but from what little I’ve read they need one, for their CEOs don’t seem up to “that vision thing.”

  13. futnuh says:

    Going to QNX as a base O/S was pretty smart (no doubt inspired by Apple’s BSD/NextStep migration nearly a decade earlier). Unfortunately it is probably 2 years too late. I’m hoping not. As a U of Waterloo grad though, I’m sad to see RIM fail this way.

  14. spejic says:

    Balsillie to anyone who has invested in his company since 2007…

    Buying stock does not equal investing in the company.

    • Anonymous says:

      Then why are people who buy stock called “investors”? Companies issue shares (via “investment banks”) in order to raise capital to “invest” in their own business. People buy shares in companies in the hope that the stock price will go up, so that they can sell later at a profit, and/or to earn dividends on the shares. Both are really only possible if the company is growing/is making more revenue/has good product or market-share prospects.

      • Anonymous says:

        Replacing “investors”, “investment banks”, and “invest” with “speculators”, “speculation banks”, and “speculate” would be much more accurate.

      • CastanhasDoPara says:

        Spejic is actually right. Buying stock outside of an IPO or from subsequent rounds of capital raising from new stock is like trading baseball cards with the kid down the block. The company already has it’s money from the initial sale and any increase or decrease in value is purely a market effect. While it is true that you are buying the investment (actually the returns attached to it) it is not true that the company sees any more money from the transaction.

        OT, RIM is acting like a dinosaur surrounded by better more adaptable mammals. If they don’t evolve and quick, they will die off entirely. Also, that playbook thing is just about stupid, who makes a business tablet that you have to tether to a blackberry just to get email. Stoooopid.

        • Anonymous says:

          Don’t want to split hairs, but the original statement was “Buying stock does not equal investing in the company.” While the company doesn’t directly receive money in those cases where it’s not selling the shares itself, buying a company’s stock is an investment in a company’s prospects. The current price of a share discounts what the company is expected to earn in the future. They are inextricably linked. Have a great day.

  15. Anonymous says:

    With Nortel gone. I can not see the Canadian government allowing RIM fall apart, with no other major Canadian tech company to fill that hole. RIM is too big to fail.

    Maybe that is why the executives at RIM have let the company get into the position it currently is in.

    • gadgetgirl says:

      Except that the Canadian government is currently Stephen Harper heading the Conservative Party. The Conservatives tend to promote free trade and internationalism, which in Canada’s case means “sell everything not nailed down to foreigners.”

      • Rayonic says:

        But wouldn’t bailing RIM out be Corporate Welfare?

        Though I’m sure RIM is getting a lot of tax breaks already, which is the same as the government giving them money, which is the same as stealing from the poor.

      • xmlhack says:

        Except in the case when Jim Prentice and the Conservatives blocked the sale of MDA to ATK. That didn’t quite go as you described.

    • Jack says:

      RIM is too big to fail.

      They filled a niche that is now being filled by every other mobile device on Earth. They are no longer needed. Bye RIM!

    • oyvinja says:

      RIM too big to fail? Nonsense. A service carrier may be too big to fail, since a country does need wireless/mobile services these days. But RIM isn’t exactly the last provider around, they are just a glorified handset manufacturer. You don’t need a homegrown handset manufacturer.
      The fact that they provide a proprietary service is more problematic, but still not decisive (imo), people can always migrate.
      RIM will probably need to learn the same lesson Nokia is currently learning: adapt to the market or die.

  16. Anonymous says:

    To Ignatzhomenez

    How does long hours spent at work equate to being productive? Over time you end up with more exhaustion and more mistakes. Granted, it takes a lot of hours to bring a small company up to speed, way more than 40 hours per week, but the stakes are much higher for a corporate founder than for a corporate cog

  17. Michael Smith says:

    QNX could save themselves with two big porting efforts. Port Android to their hardware and port their key messaging stack to Android. QNX is a good OS, but there are too many mobile operating system APIs in the market today, and RIM would lose out. I read somewhere that RIM might support the Android API but I don’t think that is enough.

  18. Arcadian says:

    If RIM could convince Verizon to take them off the mandatory data package category, they would sell more. Their hardware isn’t bad, nor is their most recent OS. It’s the rest of Blackberry’s network that sucks – having a Blackberry ID is completely worthless.

  19. Rob Beschizza says:

    Buying stock is a personal investment, even if to some of you it doesn’t “count” as SRS BSNSS investment because it’s not big money.

    • Anonymous says:

      Don’t hold back on the definition. Buying stock IS a serious business investment! The folks giving baseball card analogy etc are talking BS. Just because one uses a wrong analogy to prove their point, does not make them correct.
      Open a finance/trading book… Example Harris book on trading & exchanges in the trading industry chapter refers to stockholders and bondholders as “investors”. Checkout the dictionary definition of investor and it includes stockholders and bondholders.
      They are investors because although a company might not directly get the money during stock trading, however the stock price tells the company how much money it can raise anytime. If a stock price is at $100 and a company has 100 stocks outstanding, it can issue another 100 stocks at $100 (current stock price) to finance itself. Thats why the baseball card trading analogy is wrong. That analogy is based on limited issue baseball cards. Stocks are not limited issue. A company can issue any number of the stocks at the current stock price (The stock price can fall/rise based on signalling, but that is unrelated to what is being said here).
      So don’t need to qualify your statement .. you had it correct in the first place.

  20. Anonymous says:

    I worked for a company like this. Not this industry, of course, but one that had once been a leader in their space and got absolutely destroyed by much better competition but still strutted around like it was their peak year and their product was like unto god. There really is an institutional blindness that comes in, a feeling that those rubes we call customers will buy whatever we put in front of them and they’ll like it.

  21. masamunecyrus says:

    You know, honestly, I think that RIM could stand to make a lot of money by fully-accepting Android making a business Android phone, complete with exceptional build-quality, professional design, good slide-out keyboard, and a customized Android interface specifically for business-professionals.

    …but that’s not what they seem to want to do.

  22. RichSPK says:

    Haven’t we shown again and again that corporate governance by shareholders can screw up a company, too? To some extent, good for him for telling investors to GFY! RIM has problems, but being beholden to shareholders is *not* one of them.

  23. jnordb says:

    The smartphone market has too many players right now….it’s time for natural selection to kick in and thin out the herd. At this point, RIM is obviously one of the weakest offerings out there, and I don’t see anything saving them other than to adopt someone else’s OS and add their BES products on top of it. There is still a market for smartphones with physical keyboards; and, with a relevant OS installed, RIM might have a chance.

  24. Not a Doktor says:

    The thing I like best about my blackberry: nobody else wanted it so I got it for mostly free.

  25. tlwest says:

    So they have a Steve Jobs in the wings? I don’t know, but from what little I’ve read they need one, for their CEOs don’t seem up to “that vision thing.”

    I don’t think they’re without vision. It’s just that they’ve *had* their brilliant vision, and precious few CEOs (or anyone else, for that matter) have more than one brilliant vision in their life. Still, that’s one more brilliant vision than most of us.

  26. Anonymous says:

    RIM’s problem is not that it is letting investors down, but that it is letting customers down.

  27. Neural Kernel says:

    I pretty much figured RIM would implode when I heard they were taking a gloriously cool operating system like QNX (runs on the Canadarm!!) and then building the rest of the system in Adobe’s proprietary runtime environment. I mean, it’s Adobe, the guys who can’t even secure a PDF reader! It’s worse than a screen door on a submarine… it’s like ketchup on Kobe beef, or single malt and cola!

  28. Anonymous says:

    @Ignatzhomenez: Worked, past tense, thank god. And no, that’s not my entire basis for calling the guy a psychopath – just an example that I was able to witness personally.

    This was several years after stock options stopped being handed out to regular employees, so it wasn’t like we were all buying BMWs off of the success of the company – just a few hundred lucky folks who got in at the beginning. Office culture is different in Waterloo than Silicon Valley, and from what I’ve read Google and Apple offer far better environments to support people working longer hours (no gourmet employee cafeterias at RIM).

    I’m sure there are valid ways of asking your people to work harder, even if he went about it poorly. The big shock was that, when he learned that everyone thought his speech was terrible, arrogant, and insulting, he had a second meeting to tell us that we were all wrong and/or lying and that he was a fantastic public speaker. There is no room in Jim’s mind that he could ever be wrong – but look where RIM is now.

  29. Anonymous says:

    It would be nice if anyone here had a clue about reading an income statement or balance sheet. You are all operating under the mistaken impression that RIM has been a slacker on revenue/profit since 2007. You are all sorely mistaken. Check Google finance and you’d see:

    03-2008 year end revenue: 6,009.40 billion, profit 1,293.87 bil

    02-2011 year end revenue: 19,907.00 billion, profit 3,411.00 bil

    2011 Net profit margin 17.13%
    2011 Operating margin 23.37%
    2011 Return on average assets 29.56%
    2011 Return on average equity 41.24%

    Does this mean there are not problems with RIM? No. But you all talk as if they have been losing money since 2007, the point at which their stock began to drop. Also a declining market share in a growing market does not mean your revenues have stopped increasing. RIM’s last quarter revenue was still increasing though their profit margins are starting to slip.

    In the end they still have a viable business with little debt and a healthy revenue growth and a good profit margin. Their road map for the future has not yet proved to be what people are seeking but they do have the money to succeed if they can find a better path for future products.

    I’ve never worked for RIM and don’t own their stock so I don’t have a dog in this fight, but a little business understanding would go a long way in your current discussion.

  30. Anonymous says:

    I think I would be happy to watch RIM fail. First off, their Blackberry that I have had a chance to use due to work sucks. It is slow and cludgey, especially considering that cellphones have made incredible leaps and bounds over the last 5 years while the Blackberry has remained almost totally stagnant.

    Secondly, I never approved of their business model in regards to the security models for the users. They tout all this security of encrypted mail, but to keep the despotic middle eastern countries happy, they allow the government to bypass the encryption and have access to the users messages. I never liked companies that give up their “morals” just to continue making a buck. They should have sticked to their beliefs and told those governments that they can take it as is or leave it… then focusing marketing to a new area.

  31. Anonymous says:

    I would not be happy to see RIM fail. I hope they get their act together, like Apple did. It was sad when Palm blew it, and watching NOK become an OEM for Windows smartphones is sad too. The Blackberry SMS is actually very good, and a lot of people love it. Their keyboards are good too, and the latest OS has some nice features. Overall, though, the phones suck compared to Android and Apple. But it would be better to have more competition and for RIM employees to keep their jobs (guess the solution is to get new mgmt at RIM).

  32. shaweetz says:

    With Nortel gone. I can not see the Canadian government allowing RIM fall apart, with no other major Canadian tech company to fill that hole. RIM is too big to fail.

    Wait, did you just make these two statements in practically the same sentence?

    Thanks for the Sunday morning koan.

  33. Anonymous says:

    In my opinion, all this RIM criticism stems from a very basic premise: the media, threaten by Apple’s stranglehold to date on electronic media via the iPad, wants it all to come down to a two-horse race- Apple vs Google.

    The media thinks they could leverage a threat by Android against Apple to allow them to get a hold the Apple’s subscriber list.

    That said, the media doesn’t want a RIM or HP o muddle up the situation by bringing a 3rd horse into the race that will only complicate the situation and prolong the game plan. Increasing the likelihood of the plan failing.

    That’s my opinion. So, hang in there RIM. Dont listen to the propaganda.

  34. Anonymous says:

    Having worked for RIM for many years I know that Balsillie is the very model of the corporate psychopath. Someone told me once, “It’s not that he thinks he’s better than you – he doesn’t even think you exist at all”.

    Several years ago, after the RIM stock took a small dip, Jim decided to personally oversee a ‘Come to Jesus’ meeting to rally some randomly selected troops. The one quote I remember is, “I walk through the parking lot and see a lot of BMW’s out there, but they’re all gone at 6 o’clock”. His message was that we should all be working longer hours to preserve his stock price. He then complained that not everyone he invited could come to this meeting (held at 8 AM). The richest man in Waterloo mocked people who said they had child care issues and said, “If I can get a babysitter, so can you.”

    The response after the meeting was pretty overwhelming – people quietly grumbling about the megalomaniac lecturing his workers like we were small children. Some of us brought it up with managers and VPs. About a week later, everyone at the first meeting got an invitation to a second meeting. I assumed it was so he could apologize.

    The second meeting had Jim ranting about how people were ‘lying’ about what he said in the first meeting. He said, “I know I am a good public speaker because people tell me I am.” Then he asked if anyone had anything they wanted to bring up – complete silence as we all realized that anyone who spoke up would find themselves coincidentally out of a job very shortly. One of the people who worked at RIM the longest stood up and told Jim what a great job he was doing, and we were all allowed to go home.

    Jim never gave an employees speech after that.

  35. joe blough says:

    also even outside of dilutative offerings, a company may own shares in itself that it can subsequently sell. so outside investors bidding up the shares of a stock can still benefit the company when they sell those shares.

  36. WmHarmon says:

    It’s not just their lack of innovative hardware. They insist that carriers buy huge lots of phones (and tablets) at full market value. They also insist on a percentage of data charges per month that hindered them as everyone moved to unlimited plans. Throw in the licensing fees to business for the buggy, back-end enterprise server and you have a better picture of a tech company that refused to change with the times. The cell market is one where manufacturers insist that the end user is their customer and the cell providers insist that the providers are the customers. Rim worked hard to disenfranchise both.

    Better article.
    http://www.bgr.com/2011/07/13/rims-inside-story-an-exclusive-look-at-the-rise-and-fall-of-the-company-that-made-smartphones-smart/

  37. turn_self_off says:

    I think what has happened with RIM was that via their BES they because the symbol of a up to speed exec, keeping in touch with the corporation at all hours of the day. This then spread to the rest of NA as people wanted to pass themselves off as execs and such. Basically, what was once a utility terminal for the office heads became a fashion and status symbol.

    This however has faded as first Palm and Windows Mobile phones, and then iphone and Android allowed similar features in a more available package. Also, the latter two moved the goal from email to web, and now social networks. I wonder if not more people communicate via facebook then via email and sms these days (if dumping photos from ones holiday trip via Android phone can be considered communicating). And if the same happens with Google+, Google may be sitting on a virtual gold mine.

  38. Anonymous says:

    What exactly does RIM do? Is it an operating system? A way of transfering data? I couldn’t find a specific description here or in the link.

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