How Research In Motion Lost the Smartphone Battle All By Itself
Over 10 years ago, a little Canadian company called Research In Motion released a device so advanced, it set the stage for the mobile office and the forthcoming smartphone era. A phone with email capabilities and security for the enterprise was a game changer. Businesses realized that with this device, the office became truly portable. Everyone became addicted, giving the Blackberry device the nickname Crackberry. RIM sold millions of these things. Every quarter the company would grow and grow and grow, selling more than 11million units this past quarter. But while RIM was enjoying brisk sales of its Blackberry device, it had secretly awoken two sleeping giants. Enter Google and Apple. Google and Apple both entered the mobile space with different game plans. Google needs eyeballs for its ad platforms, so it created an OS called Android and gave it away for free to any mobile handset company that wanted a modern OS. Apple on the other hand, decided to create a closed system, called iOS, that it controls in order to ensure a great user experience. Both of these operating systems are extremely advanced, allowing users to have a rich, user experience and they have both pioneered the app era. The Apps The application era took off shortly after it exploded with popularity on Apple's iOS platform. Copycats emerged from every OS provider, including Google, RIM and Nokia. However, still to this day, no one has been able to catch up to Apple and this is the single biggest reason why RIM and Nokia will be nothing more than fairytales in a few years. RIM took way too long to launch AppWorld. They sat back and watched as the iPhone continued to sell and set several launch date records. They underestimated the power of the Apple fanboy and they're paying for it now. RIM tried and failed with the Storm. Now they're rumoured to be releasing a tablet called the BlackPad, yet what they fail to realize is that the reason the iPad is so popular is due to the apps, specifically the games. The Blackberry OS lacks the ability to run such rich applications and gaming programs, limiting the forthcoming BlackPad to nothing more than a large device for BBM and email. Hardly worth the $499 price tag it is rumoured to be selling at. Furthermore, the only one competitive advantage Blackberry has right now is BBM (Blackberry Messenger), which is being backed by a huge marketing campaign. This product can be easily duplicated. What RIM needs is a complete overhaul of their OS. Something that can compete on equal terms with Android and iOS, but they missed that opportunity by letting HP purchase Palm, the only thing that could have saved RIM. What's Next? As RIM's margins begin to shrink and their market share begins to stagnate, the stock will continue to drop (as it already has). Rumours will then start about RIM being acquired by another company, yet that is exactly what will happen. I believe it'll be Microsoft who will buy RIM, hoping to reinvent the Windows 7 platform (another dud). It will be sad to see such a great Canadian company go down this way, but you can't be too greedy when you're on top of the world.