Full article here. Nothing new here. Every smartphone is portfolio of in-house innovation, patents, third party apps and licensing of technology. iPhone & Android phone are no different.
RIM's New BlackBerry 10: The Patchwork Smartphone
By WILL CONNORS
When Research in Motion Ltd. RIMM +3.56% unveiled the prototype of its upcoming BlackBerry last month, two features stole the show—a predictive touch-screen keyboard and a camera that takes a series of near-instantaneous images for the perfect shot.
But unlike with earlier BlackBerry models, RIM didn't design either tool—it's licensing the technology from two different European developers. In fact, most of the device's critical features are a patchwork of hardware and software obtained quietly through about a dozen acquisitions and multiple licensing deals over the past two years.
RIM CEO Thorsten Heins holds up a prototype of the new BlackBerry.
The features include the device's interface, which allows a user to navigate through the phone's features, and the operating system itself.
Buying up or licensing the latest technological gizmo is nothing new in the arms race that has broken out among the world's top smartphone makers. Apple Inc. AAPL +1.53% bought the technology that powers its popular Siri voice-activation software. Other industry players—from Google Inc. GOOG +1.78% to Samsung Electronics Co. 005930.SE +0.59% —regularly bolster their own devices and operating systems with deal making.
But RIM has taken the strategy farther than most big players, at a crucial time for a company that practically invented the smartphone and once held unrivaled dominance over the market.
It's also a big departure for RIM, which once prided itself on its in-house engineering. That all changed as the iPhone and other popular smartphones overtook the BlackBerry as the mobile device of choice, leading RIM to look for outside help.
Now RIM executives are racing to sew together all of these pieces in time for the device's launch expected this year. Converting to an entirely new operating system is an enormous task all by itself.
RIM also has to integrate the new technologies—and the many employees—of several smaller companies in globally distant offices while shedding jobs tied to older phone models. It must cut costs associated with those older BlackBerrys while maintaining the services for existing users.
The number of acquisitions going into this one product may make it especially challenging, said Maribel Lopez, principal analyst at Lopez Research, a San Francisco-based research firm. "It's almost too many things to integrate at the same time," she said.
New Chief Executive Thorsten Heins has promised the new phone by the end of the year. Amid crumbling market share in the U.S, falling BlackBerry sales around the world and a tanking stock price, RIM is essentially betting the company's future on the new device.
Mr. Heins is also weighing a broad range of strategic options for the company, and has hired investment banks to help sift through alternatives.
RIM's recent heavy reliance on acquisitions and licensing deals means that, on top of all that, he will need to seamlessly combine all these variously sourced technologies into what has to be a near-flawless launch.
RIM has revealed very little of what the phone will look like. Early in May, it handed out prototypes of the device, loaded with a working version of its operating system, to allow developers to start creating apps.
RIM said it's up to the task, and the resulting phone—while using its own and acquired or licensed technology—will be "uniquely BlackBerry," according to a spokeswoman.
"We use a number of ingredients including our own unique inventions and designs to create the best user experience," the spokeswoman said in a statement.
RIM says the key to the new phone is its new operating system, called BlackBerry 10. It's a system based on technology it obtained in the 2010 acquisition of Ottawa-based QNX Software Systems Ltd. for about $200 million.
The system has powered nuclear power plants and medical devices, and RIM is already using it to run its PlayBook tablet. The company expects it will eventually power all of its mobile devices.
Meanwhile, the new phone's interface—the system that lets a user move back and forth between features like email and gives apps their distinctive look and feel on a device—is largely based on technology developed by a small Swedish tech company called The Astonishing Tribe, which RIM bought in 2010 for an undisclosed sum.
RIM licensed the camera technology of the new phone from Scalado AB of Sweden. U.K.-based TouchType Ltd. makes the predictive touch-screen keyboard, called SwiftKey, which RIM has licensed for the phone.
RIM has also bought a host of other small companies whose technology is expected to help power or enhance the phones' video sharing, Web browsing and messaging tools. Last month, RIM announced a licensing deal with Dutch company TomTom International BV to power traffic and map-related apps on BlackBerrys.
RIM has already struggled with fully integrating some of its technology acquisitions.
When RIM acquired QNX and The Astonishing Tribe, the company was still run by longtime co-CEOs Mike Lazaridis and Jim Balsillie, who both stepped down in January. Mr. Lazaridis, who founded the company and has long spearheaded its engineering innovations, remains on the board.
At the time of the acquisitions in 2010, Mr. Lazaridis insisted that both companies stay in their respective home cities of Ottawa and Malmo, Sweden, largely to allow them to continue developing their technology while avoiding the bureaucracy at RIM's Waterloo campus, according to people familiar with the matter.
This all didn't sit well with existing RIM employees working on other projects, according to these people. Executives would also often set staffers working on different projects to work against each other, a tactic from
RIM's early days meant to drive creativity and productivity, but one that often led to resentment and less cooperation, according to people close to the company.
Mr. Heins has tried to remedy that internal strife since taking over by focusing on the BlackBerry 10. But it is still widely believed at the company that RIM employees who are not working on the new device are in jeopardy of losing their job, say current employees and those close to the company.
"Anyone working on [the new operating system] is safe," said one current RIM employee. "Anyone working on legacy projects is preparing their resumes. I don't know anyone that isn't going to take a buyout if they offer one."
In response, the RIM spokeswoman said in an email: "While BlackBerry 10 is clearly a top priority for RIM, it is not the sole priority; and it would be inaccurate to imply that employees not working on BlackBerry 10 are not considered valuable to the company or our customers."
There have also been more minor skirmishes between RIM and its partners.
Fadi Abbas, the founder of Scalado, the company behind the camera technology that RIM showed off last month, said he was originally miffed that RIM didn't refer to his company's role during the presentation in Orlando.
RIM acknowledged the licensing agreement after a public presentation of the feature.
Mr. Abbas said it hasn't affected his relationship with RIM. He said his partnership with RIM was based on "strategic licensing that covers a lot of things," but declined to provide further details.
Write to Will Connors at [email protected]