Cutting Room: RIM’s gamble could turn gruesome


Michael Garwood thinks it will be extremely difficult for RIM to rise back to prominence, even with the help of BlackBerry 10, and suggests it could follow Nokia’s lead in finding another operating system to use

Oh, how the mighty have fallen! Last issue the hot topic in Mobile News was Nokia’s decision to shed 10,000 jobs in a move described as do or die for the Finnish firm.

Not to be outdone, BlackBerry manufacturer RIM quickly announced its own bad news: that it too was shedding a further 5,000 from its team (a third of its staff headcount). It’s like a game of Top Trumps for failing firms.

This news followed yet another disastrous quarterly performance that saw takings down from $4.9 billion to $2.8 billion year on year.

Such headlines are becoming all too familiar to the firm. Looking at the archives, just a year ago Mobile News ran the headline ‘RIM to cut 2,000 jobs as cost-cutting begins.’ Clearly its strategy hasn’t worked and it’s becoming increasingly difficult to see how the firm can recover.

Its decision to suspend all handset releases until next year, as well as delaying its much talked about BlackBerry 10 operating system, seems like financial suicide.

Lost loyalty
Loyalty to the brand has been tested to the maximum in recent years – but this is on a whole different scale.

Is RIM really so naive as to expect customers due for an upgrade to wait until 2013 for a new device? Or does it expect them to buy one of the older existing models currently doing the rounds?

The move will be a breath of fresh air to rival manufacturers who have been eating away at RIM’s shrinking market share for the past year. The next six months could be catastrophic for the firm.

The company is fading fast. One analyst went as far as to compare the events that are unfolding at the firm to the struggles of a dying puppy.

It is difficult to imagine any other manufacturer trying to rectify their problems by stopping their production line. It’s a massive gamble.

Serious questions need to be asked. RIM surely had a portfolio of handsets scheduled for release this year, so something has clearly gone wrong. Perhaps this range was not considered good enough to change its ailing fortunes?

And what about the innovation team? Does RIM even have one? It seems the firm is playing catch-up on every level.

Past glories
RIM could once answer its critics by pointing to its email capabilities. It can’t do that now. And little seems to change from one device to the next, with the same old niggling problems repeatedly inherited by newer models.

In a world where everything seems to move more quickly, powering up a BlackBerry remains soul-destroyingly slow – taking up to five minutes in some cases. This was once a sacrifice customers were willing to pay in exchange for functionality – but that’s no longer a viable get-out.

For example, I received a test handset from Huawei – the Honour, a more powerful and spec-heavy device – and it took less than four seconds to switch on and be ready for use.

In addition, gripes still surround BlackBerry’s online capabilities. The firm is miles behind other manufacturers in this regard – its offering takes longer to render pages and often freezes up completely.

Arguably its best attribute is BlackBerry Messenger (BBM), which remains popular with businesses and consumers. But this says more about its rivals’ inability to provide more appealing alternatives.

The BlackBerry App World market remains a frustrating experience. While the apps themselves are not terrible, loading them requires considerable patience, as does uninstalling them. The likes of Android, Apple and Windows simply do not plague their customers with these most basic of problems.

Possible partners?
Can RIM rectify these problems by next year? It’s a big ask. And even if BlackBerry 10 and the new handset range are as near to perfect as can be, it will have lost a large chunk of its base to a rival firm.

Nokia realised its Symbian platform was not able to compete against the likes of Apple and Android, so made the brave move of partnering with Windows. It has struggled to make the impact it hoped for, but the future of the OS remains positive.

It would be difficult to imagine RIM swallowing its pride and making such a drastic move. But operating systems are key to consumers’ decisions – RIM could do a lot worse than open up to the possibility of having a range of Android or Windows Phone-powered handsets.