Cutting Room: Between a rock and a hard place

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Canadian handset manufacturer Research In Motion is sinking further into trouble and with its new operating platform BlackBerry 10 still months away, Paul Withers reckons 2012 is looking increasingly bleak

RIM is in trouble, and the coming months don’t look too promising for it.

Last week, the BlackBerry manufacturer posted a loss of £78 million for the three months ended March 2. Revenues slid 25 per cent to £2.6 billion compared to £5.6 billion in the same quarter a year earlier.

IHS Global Insight telecom analyst Dexter Thillien says these results weren’t a surprise as it was a period in which BlackBerry faced strong competition from the launch of the iPhone 4S and the emergence of new Android devices running the Ice Cream Sandwich 4.0 operating system.

RIM CEO Thorsten Heins (pictured) announced RIM’s new strategy was to “refocus on the enterprise business and capitalise on our leading position in this segment”, adding “We believe that BlackBerry cannot succeed if we tried to be everybody’s darling and all things to all people. Therefore, we plan to build on our strength.”

So RIM is going to concentrate more on the market that it has built its success on. It may seem like the right move. But industry observers have doubts. Gartner research director Roberta Cozza says to be successful in the enterprise market, a company has to be successful in the consumer market too. The distinction between business users and consumers is becoming more blurred, she believes.

So RIM is between a rock and a hard place, its market share eroded by Apple’s iPhone and the range of handsets that now run off Android.

Its attempts to compete with Apple and the iPhone have not been great. Its PlayBook tablet was an unmitigated sales disaster selling 1.3 million units since launch last year compared with the 40.5 million iPads sold in 2011.

The PlayBook was not helped by being released without email capabilities. This only become available on the device in February with the updated PlayBook 2.0 OS. RIM can’t compete with Apple’s loyal fan base while Google’s Android has devices across different price points. Microsoft and Nokia are also making renewed attempts to gain more of a foothold in the market.

Full article in Mobile News issue 511 (April 9, 2012).

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