Friday, June 17, 2011

RIM approaches the edge

Research In Motion is Canada's leading tech company, the inventor of the BlackBerry and the smartphone category it once dominated.

Then, in a stunning oversimplification, along came Apple and Google and changed the name of the game. The BlackBerry's uniquely secure and robust messaging was no longer enough. Apps were the thing, as were touchscreens and sleek and sexy industrial design that caught attention and spawned coolness. BlackBerrys have been getting better all the time, but they're no longer cool. It isn't enough to evolve the design. Only revolution, apparently, will do, and resting on your geek laurels is quite the no-no in this industry.

Since the iPhone's debut in 2007 and Google Android's emergence two years later, the clouds over the BlackBerry patch have been darkening. Yesterday, they turned black after the company announced disappointing results: lower profit than the year-ago quarter, shrinking market share and, almost unthinkably, impending job cuts.

To say this has had a seismically frightening impact on Canada's tech industry would be an understatement. This is Nortel all over again, another sign that we depend too heavily on the fortunes of too few superstars. Mom taught us never to put all our eggs in one basket, yet we've done exactly that. Again, And that basket's in trouble.


I wrote the following piece for Yahoo! Canada Finance:
I'll be speaking with Calgary radio station QR77's Angela Kokott at 7:40-ish pm, and then off to the studio for a live hit with CTV News Channel's Marcia MacMillan at 9:00 p.m. (all times Eastern. Update: Video stream here.) I spoke with the Globe and Mail's Gordon Pitts for this piece:
And with the Kitchener-Waterloo Record's Chuck Howitt for this article:
And with 570 News's Mike Farwell:
(The Record is RIM's hometown paper, and 570News is their hometown talk radio station.)

Your turn: The company still made $695 million last quarter. Is it fair that investors can turn a massively profitable company into a pariah? Does the system work?


Alexia said...

I enjoyed reading this article - very thought-provoking.

I've just bought my first smartphone - a Samsung Galaxy - yep, an Android. As you say, Blackberry is no longer the default choice. In fact, I didn't even consider one. In my mind, they are
a. businessperson-oriented
b. too expensive
c. not cool :( - (your word)

I'm a google user, and besides, I've read so many glowing reviews about Androids.

I'm looking forward to using it!

rashbre said...

There was something a bit similar to this with the Finnish superstar Nokia who held the lead for many years (at least in Europe) for the conventional mobile phone (cellphone). Everyone in business used them.

Fast forward and the game has changed. It appears that Nokia have been struggling (less so with 'new' markets like Chindia) hence the arrangement with Microsoft and the apparent demise of their proprietary operating systems.

Who was it said that in bigbiz only the paranoid survive?

Mark said...

To answer your question is a complex task, requiring me to write a bit of an essay...

My understanding is that corporations are legally bound, regardless of anything else, to turn a profit. Strong companies (Monsanto, Google, Macintosh, et al.) get stronger and the 'weaker' ones die in a weird sort of financial natural selection.

From a financial point of view, I think the system "works" as designed - larger corporations choke out smaller ones to increase profits. And the rich are getting richer...

HOWEVER, the system was designed from a financial and economic perspective and didn't take into account social or political impact. We reached the point long ago where (some) corporations are more powerful than government and more easily accessed than religion. Being legally bound to, above all else, turn a profit has turned into sweatshops, deception to consumers, and cutting standards, etc.... And because a corporation isn't a flesh and blood person, there's nobody accountable for any of it.

It's kind of scary. Kind of REALLY scary.

So, from a sociological standpoint and from the perspective of the future of our human race, the system absolutely does not work. Like you said, we're putting all our eggs in one basket, and that basket has potential to be a very powerful, destructive, and deceptive device.

On an even larger scale, I think it's safe to assume that if we stay this course there will eventually be only one basket containing all of the eggs. A huge basket with infinite power, questionable morals, and absolutely no accountability.

sunflowerkat said...

Ironically, I just posted an entry about how much I like my iPhone. However, it's not the PHONE function that sets it apart. It's everything else the device can do. I didn't even consider a blackberry. I perceive it as a tool for business communication...a niche that didn't match my needs.

My husband has been in the high technology industry for 30 years. I have observed the business end of the industry from the sidelines but as a non business person, the basis for decisions often make no sense to me. It often seems counter intuitive. What's indisputable though is that the consumer market is ALWAYS looking for the cool factor. Business theory aside...sleek, cool and multifunctional and user friendly is what consumers want. Be it RIM or anyone's a tough, tough industry if you're not ahead of the curve.