Will RIM be this decade’s Nortel? Why they should be scared of how to stay relevant

Summary: RIM needs a stronger consumer play, or a new mobile killer app, if it’s going to be relevant this decade.E-mail. Tweet.

Being back in Canada for the holidays, has me a little nostalgic – recalling my days at Waterloo, and since watching the meteoric rise of RIM in the past decade, along with Nortel’s precipitous fall from grace. Watching the new wave of mobile devices (formerly known as “smartphones”) and related consumer behavior patterns emerge, it got me thinking about what lies in store for RIM in this upcoming decade, and I’ve come to the realization that RIM may be on it’s way to become this new decade’s Canadian poster child as a high-tech also-ran.

How can I “picking on” RIM?!
It’s almost taboo to be in the Waterloo technology community and speak ill of the almighty RIM. Their contribution to the local and national innovation economy was unprecedented, and deserves to be lauded. However, in watching the rise of iPhones and Android phones, along with RIM’s innovation stagnation of the past few years, I can’t stay quiet. As a long time RIM / BlackBerry proponent, even living across the street from their world headquarters, I need to give them some “tough love” in hope they’ll pull things together.

Warning signs of trouble ahead
To-date, RIM has dominated the enterprise market, and in recent times the rising tides in the mobile market has lifted their boat, along with many others. However, the consumer market will define mobile’s next generation – and RIM is extremely weak there.

We’ve seen this movie before
With mobile reaching a new level of maturity, the next major battleground is in the consumer business. If we learned anything in the 90’s in the way Microsoft upended IBM in corporate PC market, with Microsoft’s Windows made inroads in the consumer market, the capability it offered made it’s way to displace the “monochrome” technologies in the enterprise market. So if similar dynamics play out in mobile 20 years later, we could see Apple and Google inevitably cut to the core of RIM’s market.

RIM’s consumer offerings are weak
RIM has come out with a dizzying array of products and features aimed at the consumer – where they really started to amp up those efforts in 2006 with the Pearl, and then with a more concertedly effort in 2007, with the Curve. Despite those releases, nothing has really changed since then. As the iPhone caught fire, and the new wave of Droid phones followed, the BlackBerry offerings remain uninspired, with little meaningful advance in the last two years.

Personally, I’ve been waiting for the “any day” when RIM wised up and put a usable browser into it’s BlackBerry, or really embraced the developer ecosystem. However, with only minor improvements, like a better camera here (which is still pitiful behind the iPhone’s), WiFi, GPS, and a media player — they’re playing catch-up behind their competition. Meanwhile, I watch as my longtime BlackBerry using friend pop open their iPhones to show off pictures of their kids, in some cases to replace their BlackBerry or in others relegating their “work e-mail device” to second class citizen. So when your hardcore brand advocates start fleeing it’s time to take things seriously, I have to admit even I am left envious and I own the latest and greatest BlackBerry Bold 9700 and I’m certainly not the only one.

What’s scarier (if you’re RIM) is watching new consumers come into the smartphone fold, from first-time buyers to grandparents, who would rather use the iPhone or Droid to be their mobile device of choice. This wave of new consumers, will enter the business world and demand those capabilities, directly or indirectly, for enterprise use…and guess what’s going to happen.

Compounding dynamics in the next decade
To make matters even worse, the winds are not in RIM’s favor. Again, looking at the way the broadband, PC, and other markets have evolved, we can see the following trends on the near-term horizon:

  • Network ubiquity
  • Falling price of access
  • Increased standardization of OS and over-the-top services
  • Proliferation of devices & device manufacturers
  • Lower cost and higher capability devices

RIM’s competitive advantage today lies in its existing enterprise relationships, and “real-time” e-mail / messaging delivery over its network…the later of which has had its own well documented troubles, with accompanying analysis.

You put these dynamics together, with the manufacturer without a real ecosystem play (above e-mail) with hardware that is being outpaced by competitors, and it spells real trouble.

What can they do?

While maintaining the status quo will certainly spell disaster, short some breakthrough innovation, here are some very tactical moves that can be executed relatively quickly, that would help win them gain real presence in the consumer market, as a means of fortifying their enterprise positioning.

1) Simplify the product line
Between the Bold, Curve, Tour, Storm, Pearl, and all of their numerical variants, there seem to be over 20 different BlackBerry versions. I say this out of my own experience at T-Mobile trying to figure out which BlackBerry I wanted to upgrade to — they are indistinguishable as the differences are trivial to what I actually care about. In fact, I almost said “forget it” and was about to get the latest Droid phone, until I felt the guilt of my years in Waterloo hanging over me. Can they please just take a stand and develop a real consumer product lineup??? If you can’t make it simple for your consumers, then you can’t capture any mindshare in a cluttered market – especially when you’re playing from behind.

2) Make the easy things easier
Getting e-mail is par for the course nowadays, and RIM still makes this difficult for consumers. You simply can’t just buy an unlocked BlackBerry, add the data plan, insert your SIM and be off to the races. You have to register your device to get your internet mail setup. Again my first hand experience helping an excited Christmas Day BlackBerry recipient diagnose this helped m fully appreciate the frustration an “average” consumer goes through – simply unacceptable. And then there’s the browser….can’t they just buy one and stop making this so painful?

3) Make it just work
So, I get it the current RIM backbone network may not be up to the job for today’s demands but my question is – how much does it really matter? With Gmail offering push e-mail, and better Synch capabilities from Google overall, how much does the “real-time” nature of the BlackBerry network matter anymore to consumers? I don’t care what they do, just make it work somehow, even if you need to give up your sunk cost bias, and change the game for consumers.

4) Find a next-generation killer app
The other three suggestions above, are necessary, but not sufficient. To win they need to do something very big in the applications space. Let’s face it, they’re not going to beat Apple nor Google with their dreadful App World — that ship has sailed. Originally RIM won based on having an integrated system designed to deliver on one killer application, e-mail. This enabled them to stay ahead of handset only makers like Nokia, Qualcomm, and the many other comers who have been relegated to a commoditizing corner of the market. Meanwhile Apple and Google are at the other extreme with very open platforms with well over a hundred thousand applications each. I think RIM needs to take one main killer app (or maybe a relevant suite of apps) and tightly integrate them into their system.

Who knows exactly what that is, be it the augmented reality space (that Google Goggles and others are making a play), mobile payment / wallet systems (like NTT DoCoMo has done in Japan), or another area where handset + network + software + install base can be brought to bear.

In all likelihood the next killer app requires adaptation vs. innovation, as there are many ideas to pick from in the existing iPhone and Droid app stores, as well as looking at Japan and South Korea; the trick will be to find on that adapts best to the RIM/ BlackBerry strengths and that can create a big enough separation form competitors.

Looking ahead
As a long time fan of RIM, and what they’ve done to put Waterloo on the map, I’m using their stagnating products and feeling pretty envious of all those iPhones and Droids out there. So the real question is: how long can RIM / BlackBerry stay relevant amidst challenges from Apple & Google? Nothing will change overnight, but I can tell you wireless calendar synch and push e-mail simply aren’t enough to ward off the advances happening all around them. They need to get serious and show the consumer market what they can do, before they lose the enterprise market too.

What would you do if you were RIM?

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