Is RIM going the way of Palm?

[BB_Storm4me]

Do you remember the early days of the BlackBerry and when it surpassed the Palm Treo? Palm had nice lead in the emerging smartphone market and they failed to innovate, had some hardware reliability issues, and the OS would required frequent battery pulls (or resets with the stylus). Sound familiar? As a Storm1 owner I know this all too well. New BlackBerry models are being exchanged for hardware defects at an alarming rate. Palm went into a deep slide as Blackberries sold like crazy. I think RIM has been complacent and is now standing on the edge.

How many millions of iPhones have been sold? Why? The user experience. While these phones target different audiences, consumer versus business, wasn't the Storm going to be the bridge between them? From the get go the Storm suffered from hardware compromises (low application memory and lack of wifi), a slow/buggy OS, and mixed reviews on SurePress. The Storm2 has answered some of those shortcomings, but the core OS still remains firmly entrenched.

The BlackBerry OS is largely unchanged since inception. 5.0 should be named 4.8 at best and it lacks any innovative features. Maybe its too much to ask for RIM to freshen up their OS and it just can't be done. Maybe their business model doesn't care about the consumer and they will ride the business user for as long as they can. 3rd party applications and other smartphone OS's are making it easier for the consumer to stay connected to the office without BES. Unless RIM makes major improvements to their OS, the slide will continue and it will pick up steam.

I see tons of "Crackberry" users and basic BlackBerry users leaving for iPhones, Android, and others. For some it's hardware failure after failure. For others, it's the shift from business phone/email, to needing to be connected to the world, not just the office.

The Storm2 is a decent phone (I'm still hearing/reading about wide spread hardware defects) but now the OS is so far behind the surging Android. Putting themes on BlackBerries can help dress it up, but the browser is a joke by today's standards. There are countless band-aids for the lacking RIM OS that are making some developers money. I just wish RIM was able to incorporate many of them into the OS. I've spent an incredible amount of my life (probably a couple hundred hours) rebooting, reloading, downloading and installing all sorts of leaked and hybrid OS's. Why? Because RIM just can't make a decent OS.

I've done my own round robin and anaylsis of the latest smartphones, my conclusion is that the HTC Passion (or whatever it will be named) with Android 2.1 and Sense UI holds most promise of being "The Smartphone" for a while. The MotoDroid is decent, but it's only because of Android. To me, the MotoDroid looks like a beta engineering prototype, not a finished product and it's keyboard is much worse than just about any BlackBerry version. The Eris and other HTC products show that Android is a solid OS with a great future, and HTC makes some good looking phones. Samsung has some cool phones too, but their attempts with the TouchWiz UI fall well short of the HTC Sense UI. Give them a little more time and they will be in the game.

I think its fair to say that the BlackBerry world is in decline as other smartphones eat more market share and more dumb phone users buy other smartphones. If I were an investor in RIM, I'd get out before the bottom falls out like it did for Palm. Innovate or die. If VZW gets the iPhone and something like the Passion...RIM is in deep trouble and there may be no going back to a leadership position, much less profitable.

Do you think RIM is the next Palm?

[dcgore]

Keep focusing on the corporate consumer and they'll be fine.

[davecbb8330]

I'm hanging on until Fall 2010, if RIM doesn't at the very least resolve the browser issue I'll be getting some flavor of HTC Android. I can upgrade in June but will wait until Fall.

Posted from my CrackBerry at wapforums.crackberry.com

[smithbt5]

Wow - I enjoyed reading your analysis. I am a previous Palm user (Tungsten E, TX, Treo), and now I am a Blackberry user (Pearl, Storm2). I understand your concerns, but I feel the need to point out some key differences.

First, BES still stomps the mud out of anything else on the market IF you are willing to pay for it. If you are a business that requires highly reliable messaging and corporate email server access, there simply isn't another viable option. I am one of those that doesn't use BES, and I still find the experience to be very good. I can add 10 email addresses and my battery isn't blistered because of the push email and BIS.

I know that the Storm 1 was problematic. I can assure you that the Storm 2 is quite solid, as are other Blackberries. Unlike Palm, where all the devices started to get unstable, Blackberry seems to have one oops (storm 1) and I understand that most if its stability problems were corrected. I've got friends with Droids, Iphones, and WM phones. Blackberry seems to be more stable that the Droids and the WM phones, and at least on par with the Iphone. Given Apple's restrictive nature with their 3rd party developers (no multitasking!!!), Apple cheats a little.

I agree that the Blackberry needs to make some improvements. I applaud their efforts to get the App World going, but it's way smaller than the competition. There is apparently a great effort to get the browser updated too, although we won't know how that will turn out until something is released. I'd like to see a UI update, but it's a tricky balance to keep your old users happy and attract new ones. They haven't done too badly. My reboots seem to be largely limited to software uninstalls, and I would like to see that go away. It's annoying, but certainly not an indicator of stability issues or a show stopper.

Palm also suffered from a lack of money. Blackberry isn't having that problem, so they should be able to make adjustments to their products as needed.

If you look at the market share numbers, Blackberry was outselling the Iphone with one model (curve) as recently as the first half of 2009. That's not much of a slide. Apple has retaken that lead with newer models. You should also note that while other's market share has grown, RIM's hasn't really fallen significantly. The market is growing and a lot of competition isn't getting its customers at the expense of RIM.

It will be interesting to see how it goes over the next 12 to 18 months, but I expect RIM will not fall into the same pattern as Palm.

[Awryter]

Short answer: no.

Long answer: Absolutely not. Palm wasted their lead updating dated hardware with more dated hardware. Their Palm OS, while intuitive with a stylus, could never be properly adapted for touch-screen use, thus the clunky Treo series we had before the company killed off support for the OS.

The differences between OS 4.5 and OS 4.6 were significant, and even if they were predominantly aesthetic, they appealed to a wider audience, increasing their market share. RIM has been extremely cognizant of the mainstream consumer: the Pearl was an extremely versatile addition to the BB repetoire, and, like a gateway drug, brought people into the fold.

RIM also has BBM, which, for many people, single-handedly keeps them glued to their screens. While OS 5 was mostly evolutionary, this past BB Developers' Conference showed that RIM is willing to abide a more open distribution structure if it means more revenue for them in the long run. The addition of a) Flash and b) a Webkit-based browser, will likely cement their inclusion the mainstream sphere.

Sure, Android and Apple are going to surpass RIM in market share, but there is room for all three. Because of Android, RIM for the first time has to appeal to both enterprise and everyman users; before, I feel like they were resting on their laurels with the knowledge that Apple could never penetrate the business market. Android will change that, and quickly.

But the BB is a capable platform, with active development, probably more so than any current software platform, however minor each update is. There is a community gnashing for increased software usability. Hardware, IMO, has almost been perfected. The Bold 9700 is about the right size, with the right keyboard.

Sure, there are problems. I am not a 100% RIM fanboy, nor will I ever be. Apple has done something unimaginable with the App Store. They have essentially forced people to abide by their walled-in garden and have racked up huge profits in the process. But I also see potential in platforms like WebOS, with its web standards, and Android, in its... well, everything Google. Just today Android surpassed 20,000 apps, and it will grow fast in 2010.

The smartphone industry is limited mainly by the networks in the US and Canada. We need LTE, and we need cheaper data, and we need all these things before we can replace our computers entirely with these tiny devices in our pockets. I can foresee the day when I will no longer have any use for my laptop.

[BB_Storm4me]

I really appreciate the comments so far. I agree that RIM has a firm (not solid) base in the enterprise. However great BES is, and nothing else comes close, companies with tight budgets are looking for less expensive and more open ways to keep employees synced to the mothership. BBM is great, but only for BB to BB.

Some of my other concerns:

Hardware - high return rates on the Tour...many multiple returns per user on the Storm1...frequent new reports of Storm2 failures.

Software - three BBM leaks in a few days? Why can't they get it right? Maybe too many RIM resources are being used for things like Facebook, Flickr, MySpace, and other applications. 3rd parties could take of these, RIM should FOCUS on improving the OS!

OS - The 5.0 release wasn't handled very well. I still see major bugs and releases seem to cause as many problems as they fix. There is very poor execution/response fixing the breaks, much less innovating new features. Why do I need a 3rd party application to reboot my phone? Why does memory management continue to be such a challenge? Why does it take so long to get a decent web browser by today's standards? Again I have to turn to 3rd parties. There are many 3rd party utilities that should be built into the OS as mature as the BlackBerry OS is.

Android will either kick RIM in the pants or kick it to the curb. What RIM does in the next 6 months will seal its' fate. Google has money and as long as they stay hardware neutral, they will be a force to be reckoned with. Microsoft will be too late with Mobile7. The other existing mobile OS's like Symbian, WebOS, and the new bada will play small parts.

LTE is a potential game changer for the hardware manufactures, but the OS wars will be won and lost based on the user experience and applications. The enterprise that RIM is the leader in, will shrink in importance as the increased consumer use of smartphones as mini-computers, linking together everything in their life, becomes a greater driving force than tethering employees to the corporate office. People are not going to carrying two phones or devices. The hardware manufacture that best blends work needs with home life will be the lead dog. LTE will give people a bigger pipe (faster way) to stay connected and consume media. This will drive more people to smartphones. RIM doesn't look ready for increased consumer demand and needs.

[fecurtis]

Frequent hardware defects in Storm2's? Man that's news to me.

The only issue I know of are that in some cases, the screen doesn't sit properly and in other rare instances, the battery door isn't tight, causing random reboots as the battery will get loose.

The buttons at the bottom not clicking was resolved with the most recent leak.

I'm still a very happy Blackberry owner as I've had 0 issues with my Storm2 and I've had it since release day. The only part of your rant that I agreed with was the browser, I have high expectations for the upcoming webkit browser from RIM...and if it fails, I'll be jumping ship. The browser is the only weak point of Blackberries IMO.

I don't expect RIM to be the top dog in the future with all the competition coming in, but I certainly don't see it going the way of Palm earlier this decade.

In fact, RIM's biggest ace in the hole...which I'm surprised was overlooked her, is their simplest advantage......they make a lot more different phones. A phone for every type of user. You also overlook the fact that the most popular RIM device is the Curve....remember, most users on here are hardcore users (be it hardcore business users who need it globally or hardcore consumers who use it for everything from music, videos, and enjoy messing with the UI through the way of themes)...for the average consumer/business user, the Curve is just fine.

[fecurtis]

Originally Posted by dcgore

Keep focusing on the corporate consumer and they'll be fine.

They stopped doing that a while ago....or have you not been paying attention to RIM's ads and services? Or did you think that the "Do What You Love" advertising campaign with young 20 somethings is meant to get more corporate users to buy Blackberries?

[l.a.rossmann]

There are certain niches at the moment that only RIM fills, so I do not see them going away or out of business. I do see the days of their phones being hot consumer items going away as people flock to phones that do not lag, stutter, or have underdeveloped apps.

[smithbt5]

It seems like this thread ignores the glitches and shortcomings of the competition. As we gripe about what we don't like about Blackberry, the competition's customers do the same - check out the forums. The Iphone's weaknesses are well documented. Android phones have issues that vary by device. Don't kick BB to the curb just yet. BB has a strong footprint in the marketplace with consumers, and a much stronger one with business. RIM is not exactly standing still --- Palm did. And yes . . . . Google will present formidable competition. I think that is very good for BB users.

[BB_Storm4me]

Originally Posted by smithbt5

It seems like this thread ignores the glitches and shortcomings of the competition. As we gripe about what we don't like about Blackberry, the competition's customers do the same - check out the forums.

You're right...people with other phones do suffer from shortcomings too. And I'll admit I haven't checked out their forums to see what kinds of trouble they have with them because I've been so busy backing up my Storm, and loading a new OS for the 49th time in hopes that it stops the remaining lags, bugs, and adds a few new features common on other smartphones.

Come to think of it...I don't remember my co-workers and friends with their other brands of smartphones getting their phone exchanged for the 4th time this year due to hardware failures or having 1/2 (according to some reports) of all phones produced exchanged for faulty trackballs (Tour). The reports of faulty/defective Blackberries seems to be increasing, not decreasing.

I do admit that my friends and co-workers with other BlackBerry models don't seem to have as many problems as Storm or Tour users, but the number of phone exchanges are troubling. I'll have to ask around to see what the return/exchange rates with other smartphones has been.

At least RIM could send me a free Storm2 for being an unpaid beta tester for a year now.

[twester65]

Nokia still leads the world's smartphone market share but it's declined about 3% from 3rd quarter last year. RIM is still ahead of Apple by about 5%, but both companies gained market share at about the same rate.

RIM's not going anywhere with 21% of the market share.

Gartner Says Grey-Market Sales and Destocking Drive Worldwide Mobile Phone Sales to 309 Million Units; Smartphone Sales Grew 13 Per Cent in Third Quarter of 2009

[DrewCSchultz]

Originally Posted by fecurtis

They stopped doing that a while ago....or have you not been paying attention to RIM's ads and services? Or did you think that the "Do What You Love" advertising campaign with young 20 somethings is meant to get more corporate users to buy Blackberries?

I definitely see what you're saying, but I wouldn't go as far to say that they stopped focusing on corporate consumers. My take is that they don't need to advertise to corporations at all in the traditional sense. Companies know the value of BB in the workplace, and BB dominates in the corporate atmosphere. The TV and magazine ads are an attempt to get non-corporate consumers in on the action.

Posted from my CrackBerry at wapforums.crackberry.com

[ChuckH0308]

Originally Posted by twester65

Nokia still leads the world's smartphone market share but it's declined about 3% from 3rd quarter last year. RIM is still ahead of Apple by about 5%, but both companies gained market share at about the same rate.

RIM's not going anywhere with 21% of the market share.

Gartner Says Grey-Market Sales and Destocking Drive Worldwide Mobile Phone Sales to 309 Million Units; Smartphone Sales Grew 13 Per Cent in Third Quarter of 2009

Yes, but Apple's share is HUGE when you consider that they only have one phone on one network. If Apple makes another phone and opens to other networks they will easily take the lead. I also see HTC coming on strong in the next year.

RIM may not be going the way of Palm, but they can't just sit back and rest on the push email thing. They need to step up their game if they even want to maintain their market share.

[jlsparks]

Originally Posted by fecurtis

They stopped doing that a while ago....or have you not been paying attention to RIM's ads and services? Or did you think that the "Do What You Love" advertising campaign with young 20 somethings is meant to get more corporate users to buy Blackberries?

Have you not been paying attention to the firm grasp (death grip?) RIM has on government entities, not to mention the Fortune 50+? Do you realize that they don't *need* to advertise to major corporations, or the government? They have dedicated sales and service teams for those high-cap BES users.

With the knowledge that they'll continue to make money hand over fist on their major BES customers they can now afford to dip their toes in "consumer" (eg: pure BIS) users. Hence the ad campaign you reference. It isn't designed to convince the FBI's Director of Information Systems to migrate to RIM... because the FBI already uses RIM exclusively.

RIM's going nowhere.