RIM Will Abandon The Consumer Market, Focus On Enterprise
As we told you yesterday, BlackBerry maker Research In Motion released its earnings report for the fourth quarter of the 2011 fiscal year, and the news was not good. The company, which stood unchallenged at the top of the smartphone market just five years ago, reported a 19% drop in revenue for the quarter, a 7% drop for the year, and a 25% drop from the fourth quarter of last year. Meanwhile, they shipped 11.1 million BlackBerry smartphones in the fourth quarter, a 21% drop from the third quarter.
With news that bad, you can expect RIM to start making some major changes in the near future if they want to survive. Accordingly, RIM announced several measures designed to keep the company afloat. First, co-founder and former co-CEO Jim Balsillie will step down from his position on the company’s board of directors. Balsillie stepped down as co-CEO (along with Mike Lazaridis) in late January with the appointment of Thorsten Heins as President and CEO. Current CTO for Software David Yach and current COO for Global Operations Jim Rowan will also be leaving the company. Yach is said to be retiring, while Rowan “has decided to pursue other interests.”
RIM also announced a change in their device strategy. RIM’s efforts to produce BlackBerry smartphones that appeal to consumers in the same way as iOS and Android devices have been largely unsuccessful. Acknowledging that, RIM is planning to refocus its efforts toward making phones that are suited to the enterprise market, and that appeal to customers who will purchase the phones for work. This move represents a return to RIM’s roots, and an increased focus on the one market where RIM still enjoys some advantage (albeit small and decreasing) over iOS and Android.
Before Apple introduced the first iPhone in 2007 the smartphone market was primarily business-oriented. After all, consumers didn’t need or even want to send emails from their phones, right? In those days, the BlackBerry was the undisputed master of the business smartphone market. With the iPhone, though, Apple proved that there was a market for consumer smartphones after all, and Google followed suit with its Android operating system. In fact, early versions of Android smartphones looked very much like BlackBerrys until the iPhone proved the appeal of the touchscreen. Since then, RIM’s road has been mostly downhill.
The increasing popularity of iOS and Android phones, combined with some unfortunate business moves by RIM, including a few products that basically flopped, have left the company on decidedly shaky ground. The company’s market share has plummeted as iOS and Android continue to grow. In fact, recent data showed that more iPhones than BlackBerrys were sold in RIM’s native Canada, where BlackBerry has long held a special place in the hearts of consumers. To make matters worse, consumers aren’t the only ones who are turning to iPhone and Android over BlackBerry. Corporations and government agencies – including the ATF, the NOAA, and Halliburton – are making the switch away from BlackBerry as their mobile platform of choice.
While a refocus on the enterprise market that made RIM successful is certainly a good move, and the forthcoming BlackBerry 10 will no doubt give the company a boost, it remains to be seen whether such measures can save the struggling company.
What do you think? Can RIM come back from the edge? Is refocusing on enterprise a good idea? Can BlackBerry 10 save them? Let us know in the comments.