11-17-12 11:24 AM
- Investors have witnessed the once great smartphone leader Research in Motion (RIMM) make an epic fall from grace. Once the undisputed heavyweight champion of the segment,it has now been reduced to the brink of extinction. Investors are divided as to whether RIMM can make a comeback. This article will attempt to make the case that indeed there still is some "motion" left in this company.
The Financial Argument
One cannot argue the fact that RIMM has been hit quarter after quarter with a financial hammer. I certainly do not want to get into any debates about the mess they've got themselves into nor into the minute details of their balance sheet. I simply want to point out (3) key facts that I think negate the financial argument:
BB10- RIMM has a new OS ready to launch. This is no small feat. Developing a new OS costs money and takes time. This isn't something they are "working on" or have in the early stages of development. It's done and it is in for carrier testing.
Cash- RIMM has over 2.3 billion in cash reserves. This is significant as it will need this cash to be able to effectively market the new OS and carry itself through until Q1 2013 when BB10 hits the shelves.
80 Million Subscribers- Despite not having a very competitive phone on the market, RIMM surprised analysts and investors by growing the BlackBerry subscriber base in Q2 to over 80 million users. This fact cannot be ignored.The (3) solid facts above combine to make the current negative financial points mute. RIMM has a revolutionary new OS in BB10 that is ready to go. They have 2.3 billion cash to market BB10 and they have a strong, loyal and growing subscriber base to launch from. If RIMM were in a position of trying to stay afloat with it's current OS investors (including myself) would be foolish to stay with them as an investment. The fact is..All of the key ingredients are there to climb back to relevance.
The Problem With Apps
There are those who claim, and rightly so, that lack of Apps is what drove consumers into the arms of iOS and Android. The leadership at RIMM finally gets that point and have taken measures (some would argue desperate measures) to address this issue:
BB10 will launch with somewhere between 100,000 and 150,000 Apps available. This is more than any other new OS has ever launched with.
RIMM is courting App Developers in very creative ways. Their recent "BlackBerry Jam Roadshow" sessions were a hit with developers and allowed RIMM to showcase the features of BB10 and what it offers for Developer assistance. These BlackBerry Jam sessions are targeting both the consumer app development market as well as the enterprise side.
RIMM also recently announced the opening of (4) four BlackBerry App Developer Lab locations as a place where developers can team up with BlackBerry technical people to assist in getting apps developed.
RIMM has guaranteed App Developers a minimum of 10K in profits as an incentive for writing Apps for the BlackBerry Apps store. In addition to this they have hosted several "hack-a-thon" events for game developers.
I think RIMM will finally have laid to rest the "lack of apps" issue. In fact, they are taking the right steps and listening to what the App Dev community wants and needs to support them. If BB10 can show that RIMM is still a player then the developers will come. In fact...a recent survey stated that BlackBerry users were more willing to pay a premium price for an App and that Blackberry users utilized the apps they download more frequently than other OS.
The Smartphone Market
The reality is that the smartphone market is still relatively untapped. In fact, smartphone penetration in the North American market is just at 50% (and even less if you discount Android splinters like Gingerbread and Froyo ). It took 15 years to reach the first 1 Billion in smartphone sales and analysts predict that we will hit the next 1 billion in the next 3 years. With the explosion in smartphone sales BB10 is timed and positioned well for this growth. In fact...they may be positioned better considering where that growth will be.
RIMM has had no choice but to implement a strategy of rest of World marketing to keep up sales while developing the new BB10 OS. This strategy has led to RIMM becoming the market leader in areas like India, Africa and South America. These areas are the next generation of Smartphone consumers and with BB10 in the pipeline RIMM will be able to offer these consumers the premium phones they will be clamoring for.
BB10- The next generation OS
What exactly are the innovative features of BB10 that will help RIMM climb out of it's hole? Here are some of the highlights of the features that RIMM has unveiled to date:
BlackBerry Balance- This feature is very innovative and one that in my view is selling feature that will win back a significant number of users on it's own. RIMM has devised Balance to allow each phone to have (2) separate and distinct user profile. One is the "Business" profile which IT managers can load up with Company approved apps and rest assured that their data is safe and protected. With the flick of the thumb a user can switch to their "Personal" profile which can be used however they want. Both profiles are fully secure and encrypted. Users cannot "cut and paste" company data into a personal email. very ingenious and puts RIMM at the cutting edge of the BYOD (Bring Your Own Device) trend. Have a look at the attached video that showcases this feature.
BlackBerry Peek, Flow and Hub- These unique features allow for a great UI experience. Users can "Peek" at any given time at other Apps without moving in and out/opening and closing Apps. The BlackBerry Flow means you are always on and can move seamlessly throughout the OS. BlackBerry Hub consolidates all of your messages, notifications, social media etc into one view and one view that can be viewed and used without moving in and out of Apps. Everything is "always on."
BlackBerry Flick touchscreen and qwerty keyboards- BlackBerry was made famous for its keyboard features that gave users the ability to type at lightening speeds. they take that experience a step further with BB10. The touch screen and hard key versions both come equipped with Flick technology. This means that the keyboard is intuitive to the point that it recognizes HOW you type in terms of where your fingers land on a button and adjust accordingly to Learning to anticipate the words you type and putting the anticipated word above the next key you would hit, allowing you to "flick" the word into place in the sentence. This will save a considerable amount of time when typing an email. It also allows users to type in multiple languages without changing language settings. Writing an email using French and English words...no problem. Flick will become accustomed to your style and offer up word suggestions in multiple languages. This is a game changer in terms of keyboards and i am glad to see RIMM focus some much attention to detail in this area.
Camera Hardware and Software- BB10 offers us an 8mp camera with a "Time warp" feature. Time Warp takes a few seconds of video before and after each photo. lets say you were taking a group shot and everyone looks great except for grandpa who has his eyes closed. With Time warp you simply tap grandpa's face and either rewind or fast forward until he looks the way you want and "voila"...perfect picture every time.
General Features- BB10 offers best in class screen resolution, a mini HDMI port, front and rear facing camera and all of the multimedia features one has come to expect from a smartphone offering today.
Security and Reliability
Security has always been the bedrock of BlackBerry support. BB10 delivers this same iron clad security RIMM has built its reputation on and in fact BB10 recently became FIPS (140-2) certified just last week. This marks the first time an OS has been approved ahead of launch. No other OS comes close to the security that RIMM offers and as the mobile future moves into areas more attractive to hackers and criminal elements that security will become even more important.
Other platforms like Android and Windows 8 have recently been exposed as posing significant risk. A 16 year old Indian student just developed a maleware for the new Windows 8 platform that can steal data files, and read text messages. Not good news for an OS that just hit the market.
Android, while gobbling up market share at a blistering rate, has also been ranked the poorest when it comes to security. The fragmentation of the Android OS makes it very difficult to manage from a security standpoint and thus has makes it an easy target for those with malicious intentions. Android is ranked as the most malware-ridden OS on the market.
Vision for the future
The team at RIMM has lost a lot of credibility over these last couple of years. The new CEO Thorsten Heins has slowly been at work picking up the pieces left behind by the former CEO team. By delivering on key dates in recent months and quietly assembling a team of seasoned turn around experts he is gaining some supporters as a CEO who can deliver. He recently outlined some vision of the future in Mobile Computing where the smartphone becomes your key tool in the workplace. He see's a future where we no longer have desktop PC's but rather employees coming to work and porting in their smartphone device to work with.
Research in Motion built this segment. Their fall from grace was filled with blundering missteps and missed opportunities. I think they have taken a step back and understand clearly where they failed and have devised a strategy that can get them back in the game.
BB10 is their "Hail Mary Pass," and iI think they have enough receivers in the end zone to make the catch.
RIM: Making The Case For A Comeback - Seeking Alpha11-17-12 06:28 AMLike 1
- While I would like to agree with the OP's message there is a glaring problem with Research In Motion's claim of 100,000 to 150,000 applications available at launch. What they are not telling you is the application count includes Google Android applications, BlackBerry OS 7/6 applications, and only a relatively small number of native BlackBerry PlayBook applications. As for the quality of those applications we will not know until after people begin downloading and using them. Thus far the track record on quality applications is disappointing to put it mildly. I doubt there will be 100,000 high-quality native applications.11-17-12 08:56 AM
- While I would like to agree with the OP's message there is a glaring problem with Research In Motion's claim of 100,000 to 150,000 applications available at launch. What they are not telling you is the application count includes Google Android applications, BlackBerry OS 7/6 applications, and only a relatively small number of native BlackBerry PlayBook applications. As for the quality of those applications we will not know until after people begin downloading and using them. Thus far the track record on quality applications is disappointing to put it mildly. I doubt there will be 100,000 high-quality native applications.11-17-12 09:17 AM
- 11-17-12 09:18 AMLike 1
- 11-17-12 09:20 AM
whats your definition of a high-quality app?
because.... again... even iOS and Android don't have 100k high quality apps, 100% sure of it
so how do you expect BB 10 OS (which will launch with 100k+ apps) to have 100k high quality apps?
i don't get it, it's impossible
i love bb10, super excited for it, but what you're asking for is impossible - of course there'll be many high quality apps, and RIM knows we expect that
but all of them?
they'll launch with 100k apps... and are trying their best to get the most important ones on BB 10, and i believe we won't be disappointed.
i'm fine with that
then again... im sure your definition from a high quality app differs from mine11-17-12 09:28 AM
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