The Outer RIM (Part 2)

12/31/2012 3:12:43 PM

Where RIM currently stands would at least seem to be on firmer ground, as opposed to spiralling wildly out of control, but getting there wasn’t without some painful decisions. After the Q1 results, and that huge half a billion dollar loss, analysts were predicting imminent death-throes if the Waterloo, Ontario based firm didn’t break up or put itself up for sale. However, RIM instead went about closing manufacturing sites and cutting 5,000 global jobs. While on a human scale such decisions are are always detestable and saddening for those involved, as a business move RIM thought it had no choice. Cut the costs and believe in the products was the message.

A statement in September by PR manager Morgan Evans, sent to website The Inquirer read, “Our financial target is to drive at least $1 billion in savings by the end of fiscal 2013, based on our Q4 2012 run rate, and headcount reductions are part of this initiative. RIM has reduced some positions as part of this programme and may continue to do so as the company methodically works through a review of the business.”

Such business speak overlooks the impact of that on livelihoods and families, but come the Q2 2013 results, it seemed those hard decisions had some positive company impact.

Dusting Off

The Q2 2013 fiscal results showed that things had somewhat improved. Revenue was up $2.8m to $2.9 billion, and losses down from $518m to $235 million. Obviously, to continually operate at a loss just isn’t sustainable, but to cut losses in half in one quarter isn’t a bad step in the right direction.

HP’s TouchPad showed how demanding the mobile market has become

HP’s TouchPad showed how demanding the mobile market has become

RIM allowed itself a bit of optimism but had to recognize its position. With Windows 8 and the Windows Phone 8 ecosystems on the horizon, it had a direct challenger in being the third option (or choice, perhaps) for end-users. Quietly confident about BlackBerry 10 and potential licensing opportunities, RIM would need to not only battle against Microsoft’s Windows 8 and Windows Phone 8 but provide a viable alternative to Apple and Android (or Android and Apple, based on global market-share). More than that, it would need to convince hardware manufacturers of the attraction of its coming release to a global audience – hardware manufacturers that have already signed up to produce devices for other ecosystems.

For its part, RIM seems to have been doing some legwork to ensure 10 gets as good a start in the market as it can. Although it’s now likely to be a March rather than January 2013 launch, RIM has declared it’s received good feedback from developers and has also managed to sign up TomTom for its navigation know-how and respected mobile games developer Gameloft. Gameloft is responsible for Android titles The Amazing Spiderman and The Dark Knight Rises, and Apple titles Wild Blood and NFL PRO 2013.

“During the past couple of years RIM seems to have lost its edge”

It’s not a bad start, particularly as 11 Gameloft titles will be available on launch, but when Microsoft has the backing of Electronic Arts and a four-month headstart, it’s not enough on its own. Equally, not all developers seem impressed with RIM’s ambitions. Paragon Software’s PR director, Katia Shabanova, recently told our sister title, Know Your Mobile, “As a multi-platform software developer, we no longer develop for BB, and don’t even consider developing for this platform anymore. We don’t have faith in RIM.”

Smarten Up

Some might take convincing, yet generally specific responses to BlackBerry 10 have been pretty positive. A video of a live demo from this year’s BlackBerry Jam Americas Keynote shows some interesting strengths of the new operating system, strengths that could be key to reinvigorating RIM’s smartphone and tablet fortunes.

Demoed by Vivek Bhardwaj of the BlackBerry 10 product team, a Dev Alpha B device is used in the video to show the critical importance of single touch gestures using what BlackBerry is calling ‘BlackBerry Peek’. Peek allows users to, at all times, peek at notifications from things like Facebook, Twitter and LinkedIn and then have instant access to the ‘BlackBerry Hub’, which is the integrated home of messages and events. Of even more use for business (or just busy) users is the way that events provide details of others who are attending the meeting, right in the hub - their details, but also details of your previous and future activities, in one place.

The BlackBerry 10 product team 

The BlackBerry 10 product team

Perhaps even more impressive is the BlackBerry 10 approach to text and messaging. Not only do 10 have predictive text and predictive phrases based on your use - suggested words appear on the keyboard as you type - but it also caters for multilingual messaging for BlackBerry’s 30% of users who message in more than one language. So if you’re writing in English and switch to another language halfway through the message, BlackBerry 10 knows. However, quite how many languages are catered for we don’t yet know.

Another feature called BlackBerry Balance allows the neat separation of work and personal use. A dragged ‘pull down’ gesture from the top of a multi-touch device will allow users to choose between personal or work very simply. BlackBerry 10 is multi-threaded so has separate and secure parameters for personal and professional identities, and a company can even allow only certain access to App World in the ‘work’ identity. If you leave the company and keep the phone, then that part of the OS can be wiped clean.

A New Frontier

Tellingly, CEO Thorsten Heins is convinced that the ‘application grid’ experience is getting old. Multi-tasking is BlackBerry’s focus here in its ‘multi-tasking space’, allowing users to move seamlessly from one application to another. What you don’t have to do is to come out of one application, go back to the application grid and then go into another like you would with Android or iPhone devices. This, combined with the BlackBerry Hub, which takes Windows Phone 7’s people and personal tiles and runs and jumps with them (and then throws in an integrated calendar), should be attractive to anyone who craves a neat and tidy mind and device.

The BlackBerry Bold: struggling to thrive in the smartphone space

The BlackBerry Bold: struggling to thrive in the smartphone space

It all sounds very impressive. In the last year the BlackBerry brand has anecdotally fallen out of favor in global markets. However, RIM has continued to support its tablet and smartphone users and points firmly to an 80 million strong – and growing - user-base. That, combined with the belief that it is the quality of its BlackBerry 10 operating system that people will be happy to wait for, is what is keeping RIM’s candle burning bright, even as Android and iOS updates appear and Windows Phone 8 establishes a strong hold in the market.

RIM’s future market impact will certainly be interesting. What it comes down to for the market is that more choice for users is always good and that RIM is looking to deliver a mobile ecosystem that is as slick as it is useful. Having counted some heavy losses and having had to make some tough decisions over the last year, RIM is looking forward to 2013 as its time to regain a place of respect in the mobile market. Recent financial results have shown an upturn in fortunes, and if the feedback from BlackBerry 10 continues to be positive, it might only take the platform’s release and the deliverance on promises to return the company to favor. And if that happens, RIM may redefine the mobile experience and once again establish itself as a serious contender.

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