Ben Bajarin is the Director of Consumer Technology Analysis and Research at Creative Strategies, Inc, a technology industry analysis and market intelligence firm located in Silicon Valley.
Research In Motion (RIM), makers of the venerable BlackBerry devices, will always be remembered as the company who liberated corporate email from the PC. In fact, you could make a compelling case that the first BlackBerrys kicked off the post PC era. They freed mobile workers from being chained to their PCs, letting them email and be productive anywhere. In fact, RIM pioneered working from anywhere at anytime.
Unfortunately that may be all RIM is remembered for, as the company is battling a range of issues from waning customer interest, declining market share and fierce competition. How is it possible that a company once so dominant is now facing so many uphill battles? Two reasons:
It Lost Sight of Who Its Customers Were
Losing sight of your core customer is one of the most dangerous things a company can do. It’s a business rule that transcends every industry. RIM, unfortunately, in an attempt to capture the more glamorous but also very finicky consumer market, failed to innovate and compete for its core customers, which were businesses.
RIM’s business was built around robust corporate solutions that included hardware, software and secure services specifically targeting the enterprise. It did this well and defended it well even against Microsoft’s continued assault through advancements in Exchange Servers and Windows Mobile.
I firmly believe that the turning point was when RIM began chasing mainstream consumers. Not because a company can’t offer products and solutions for two completely different market segments, but because RIM’s core value and business strengths did not translate into value in consumer markets.
What consumers want is very different from what corporate customers want. RIM was positioned well to serve one and not necessarily the other. To successfully enter the consumer market RIM needed to re-invent itself specifically for that market, and that is exactly what it did not do. In short, making consumer products was not in the company’s DNA.
RIM Failed to Innovate
When talking about the most innovative companies over the past five years, RIM rarely enters the discussion. When you dominate a market like RIM did, there is a tendency to become complacent and believe you are untouchable. However when you combine the rapid pace of technology advancements with a free market society, no company is ever really safe at the top.
A company’s ability to innovate stems directly from the culture cultivated internally. Some companies do this better than others. In my article last week I pointed out why Apple’s fostering of a culture of innovation internally is one of the main reasons competing with it is so hard. In creating products for consumers, RIM only copied competitors.
Is There Hope?
Because I am an optimist I have a hard time saying there is never any hope for any company. However, if drastic changes do not happen within RIM I am skeptical that a turnaround can happen.
RIM needs to change leadership at the top, regain a laser focus on its corporate and business customers, focus on innovating for the core needs of these customers and exit the consumer market entirely.
There is also talk of RIM being an acquisition target. This is another viable option for a turnaround, although one that I find less likely to happen.
Ultimately, focusing purely on enterprise customers is not as elegant or flashy as the consumer market; however it is a solid business and one that is still lucrative if done right.