RIM In Repair: Company Vows Success With BlackBerry 10 Release, Hefty Developer Investment

on July 10 2012 4:11 PM
Broken iPhone
Apple, Google and Microsoft came up short in 2012 in their own ways. Flickr

Research in Motion CEO Thorsten Heins has been saying the same thing for weeks: Pay no attention to the man behind that curtain. Despite massive layoffs, dramatic drop-offs in market share and a rapidly decaying portfolio for investors, Heins firmly believes that RIM's best is yet to come.

In Tuesday's meeting with shareholders in Waterloo, Ontario, Heins admitted that he isn't satisfied with where the company is now, but with a new investment in developers and the company's much-ballyhooed upcoming operating system (BlackBerry 10), he believes RIM is on the comeback trail.

RIM lost 95 percent of its market share since 1998, and after announcing its plans to shed nearly 30 percent of its workforce, RIM is pivoting and putting a great deal of emphasis on BlackBerry 10. According to the e27 blog, RIM has reportedly invested $100 million in attracting the developer community to help build applications and platforms for Blackberry 10. Given the increased competition in the smartphone department from Apple and Google, RIM has finally realized that it needs many, BlackBerry-friendly applications to compete with these dominant operating systems.

As we prepare to launch our new mobile platform, BlackBerry 10, in the first quarter of next year, we expect to empower people as never before, Heins said. BlackBerry 10 will connect users not just to each other, but to the embedded systems that run constantly in the background of everyday life -- from parking meters and car computers to credit card machines and ticket counters.

In a Toronto Globe op-ed published on July 3, Heins reminded critics of BlackBerry's former prominence, noting that RIM is simply at the beginning of a transition to truly mobile computing.

I am the first to admit that RIM has missed on important trends in the smart-phone industry -- especially in the consumer domain, focusing on its core value system for successful products and services, Heins said. We are working diligently on BlackBerry 10 in order to provide a compelling experience for our loyal enterprise customers and consumers. While we are in a very competitive and constantly changing market, customers benefit from this competition and continued innovation.

Can RIM Actually Turn It Around?

Don't count BlackBerry out, Heins began his op-ed. In recent weeks, it's become fashionable for pundits and market watchers to alternately eulogize Research In Motion as a fallen pioneer and demonize management for not chopping up the company to sell for parts. As President and CEO of RIM, I understand the frustration and impatience of RIM's shareholders and their eagerness to see the company start to surface the underlying value we all know exists at RIM. But we do not believe RIM is a company at the end. Nor do RIM's current challenges hint at a larger Canadian problem of not being able to sustain successful technology companies.

More or less, RIM has lots its tight grip over enterprise and working professionals; those former CrackBerrys have moved into mainstream smartphone culture, opting to pick up iPhones and Androids for their intuitive features and tight integration with the desktop experience. If RIM has any chance of succeeding with BlackBerry 10, it must find a balance between enterprise professionals that used to love BlackBerry and consumers that prefer the more intuitive touchscreen experience.

RIM is doing everything it can to build a viable, profitable system around BlackBerry 10. RIM is looking to distribute 12,000 BlackBerry 10 Alpha devices to developers to get a head start in developing applications, and the company also plans to expand its own developer team from 40 people to 130 people by the end of the quarter. RIM is also bringing back its certified developer program to ensure BlackBerry developers have the tools and information they need to build for BlackBerry.

The good news for RIM is that BlackBerry actually has the legs to perform well revenue-wise. According to a VisionMobile study, BlackBerry actually tops the list in terms of average revenue, raking in nearly $3,900 per application per month. Apple's iOS platform is the next best in revenue per app-month; which actually generates about 35 percent more average revenue than Android.

BlackBerry is also ramping up the number of total mobile apps. Over the last three months, RIM has built its small App World platform to more than 90,000 applications, which is a 220 percent jump from three months ago.

While this emphasis on the mobile product will be great for BlackBerry 10, the fact of the matter is, most of the world has moved on. The majority of owners are split between iPhones and Androids, and Windows Phones pick up the slack at No. 3. RIM is barely in the mix at all; after so many years out of the game, BlackBerry 10 would need to be an absolute smash sensation to get RIM back in the game. Unfortunately, this is highly unlikely.

Apple and Google continue to improve their already-popular smartphone offerings, and that intense competition doesn't look to slow down. The Samsung Galaxy S3 has performed extremely well in its early release, and Apple will likely reveal its iPhone 4S successor in either September or October. It's possible that today's smartphone competition is simply too stiff for RIM to get its mojo back, as much as that may upset Heins.

Yes, [RIM] is very, very challenged at the moment - specifically in the U.S. market. The way I would describe it: we're in the middle of a transition, Heins said on CBC Radio. All that is in the making, it's in the works. This company is in the middle of it and I'm positive we will emerge successfully from that transition.

RIM currently stands at a major crossroads, but it can do little besides putting all its energies into BlackBerry 10. Despite its delays and the declining number of BlackBerry shipments and subscribers, RIM hopes to have one more go at the smartphone market. If it doesn't succeed, the Age of BlackBerrys may soon be just a memory.