06-03-12 10:58 PM
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  1. Stewartj1's Avatar
    Good read. TheRecord - Things are far from over for RIM

    Things are far from over for RIM

    Research In Motions decline will lure Canadas tech sector out of the shadows

    Its easy to get caught up in the torrent of bad news coming out of Research In Motion this week expected mass layoffs, the hiring of bankers J.P. Morgan and RBC Capital Markets to help with a restructuring and possible asset sale, anticipated operational losses and investors racing senior leaders for the exits and assume its all over.

    It isnt. RIMs tumultuous present could just as easily be the harbinger of a more prosperous future for the company and the region it grew up in.

    On the surface, of course, its hard to see the hope, especially if youre a RIM employee hoping to survive another frightening chapter in the companys history.

    In advance of major job cuts that could approach or exceed 6,000 employees, current and former staff say the company has already cranked up the pink slip machine, preferring to announce layoffs on Thursdays. Employees have taken to calling them Goodbye Thursdays, and no one would blame them for not seeing beyond next weeks cull. Both the company and the community that surrounds it are on pins and needles.

    But beyond the immediate gut-wrenching impact, a number of longer-term, wider-range and ultimately more positive impacts are already beginning to emerge:

    A leaner, meaner RIM

    The restructuring now underway will, if chief executive officer Thorsten Heins pulls off this high-stakes balancing act, result in a reinvented company more connected to its markets than its ever been. The old RIM was overly bureaucratic, hamstrung by layer upon redundant layer of management that couldnt decide what to have for lunch, let alone how to build and market a better smartphone. Its former leaders, Jim Balsillie and Mike Lazaridis, famously ignored calls for change, insisting until and beyond the bitter end that they knew what consumers really wanted, that their increasingly long-in-the-tooth BlackBerry devices were more than enough to remain competitive against iPhones and Android devices.

    RIM missed the boat because first it wouldnt listen and later couldnt respond to a changing market. The substantively smaller and more agile RIM that will ultimately emerge from this process wont make those same mistakes again, and will be better positioned to pursue outside-the-box paths the previous regime would have waved off.

    Fair talent competition

    The flip side of so much talent being let go from what was once Canadas unassailable tech superstar is clear: RIMs loss is the industrys gain. Smaller companies in Waterloo Region as well as the broader southern Ontario market are already benefiting, with anecdotal reports of ex-RIM employees joining software firms in London, Toronto and elsewhere. Until RIM hit the skids, these smaller companies simply couldnt compete for engineering talent. Now, theyre just as likely to land the best of the best. The resulting redistribution of top talent ultimately makes the entire sector stronger.

    The end of attention deficit disorder

    Smaller tech companies and startups being incubated in places like Waterloos Communitech and Londons Research Park have long had difficulty getting on anyones radar because RIM has been such a dominating force in the market. Like Nortel before it, the smartphone maker absorbed the bulk of mainstream media and industry attention, which in turn made it difficult for smaller players to attract investment and market themselves and their products. As RIM recedes from top-tier status, these emerging players shine through.

    The building of community

    Waterloo Region has long been seen as an excellent example of partnership between industry, government and academia. These close relationships have opened up opportunities that have positioned the region as Canadas version of Silicon Valley, a convergence point where great, leading tech stories happen because the ingredients are all there. RIM largely grew up because of this uniquely enriched environment, and now that its faltering the region has a chance to validate its integrated value proposition.

    Larger numbers of smaller, now-better-resourced and supported companies will ultimately fill the void left by the once-dominant smartphone maker, absorbing the displaced talent as they contribute to rebuilding Canadas reputation as a tech innovator.

    Quite frankly, the story was a lot more difficult to tell when RIM was riding high and hogging the limelight. As difficult as RIMs decline may currently seem, the end of an era where the sector was dominated by one player will help Canadas tech industry move beyond the stigma of a one-trick pony.

    Carmi Levy is a London, Ont.-based independent technology analyst and journalist. carmilevy@gmail.com
    05-31-12 10:01 AM
  2. Chrisy's Avatar
    Good article. I believe it. Enough with doom and gloom. Keeping it positive.
    Stewartj1 and zar1964 like this.
    05-31-12 10:04 AM
  3. JDukeOSBB's Avatar
    Thank you for posting this. I am glad to see some writers are still using their brains.
    05-31-12 10:12 AM
  4. inicophone's Avatar
    That was an interesting read. The only thing that worries me, is the long term viability of BlackBerry. If they are sold - what would happen. I love my BlackBerry and I don't want to leave
    Stewartj1 likes this.
    05-31-12 10:18 AM
  5. bilianajones's Avatar
    As long as Blackberry still has its die hard fans it will survive any tides.
    05-31-12 10:29 AM
  6. OzarkaTexile's Avatar
    As long as Blackberry still has its die hard fans it will survive any tides.
    The facts say otherwise.
    purijagmohan likes this.
    05-31-12 11:11 AM
  7. _StephenBB81's Avatar
    The facts say otherwise.
    How so?

    RIM has survived 2 years with a less attractive product portfolio than their competition, they've faced their first Operating loss, whilst securing liquid capital,

    Though they are being devalued on the stock market, that doesn't negate their ability to operate as a niche player, if RIM continues to be beat up by the markets they very well could go private if the CASE program works as they hope it will, and if the growth in Alternate markets besides North America continues, it will be slow, but they can still survive.
    houshinto#IM likes this.
    05-31-12 11:15 AM
  8. Rob1's Avatar
    As long as Blackberry still has its die hard fans it will survive any tides.
    Yep - just like Palm and Nokia.....
    waker likes this.
    05-31-12 11:17 AM
  9. Superfly_FR's Avatar
    in RIM ... well, you know the song.
    thanks for sharing.
    05-31-12 11:30 AM
  10. 1812dave's Avatar
    How so?

    RIM has survived 2 years with a less attractive product portfolio than their competition, they've faced their first Operating loss, whilst securing liquid capital,

    Though they are being devalued on the stock market, that doesn't negate their ability to operate as a niche player, if RIM continues to be beat up by the markets they very well could go private if the CASE program works as they hope it will, and if the growth in Alternate markets besides North America continues, it will be slow, but they can still survive.
    Hmm...so you expect that they can operate for years with an ever-declining user base? You aren't pinning your hopes for a rosy (read: surviving) RIM future on BB10, are you?
    waker likes this.
    05-31-12 12:26 PM
  11. Stewartj1's Avatar
    Hmm...so you expect that they can operate for years with an ever-declining user base? You aren't pinning your hopes for a rosy (read: surviving) RIM future on BB10, are you?
    The facts show their user base is steadily growing.
    05-31-12 12:37 PM
  12. _StephenBB81's Avatar
    Hmm...so you expect that they can operate for years with an ever-declining user base? You aren't pinning your hopes for a rosy (read: surviving) RIM future on BB10, are you?
    I'm confused here sorry


    RIM has yet to have a declining user base.

    But yes, RIM could survive on a declining user base if they address the decline with proper alignment of staffing and service, they survived with far less than they have now, and there are many strategies available to maintain the company without being the market leader.

    My HOPES are pinned on a exciting and explosively popular BB10 future for RIM
    My Tax Free savings investments are Hoping for a Rosy and exciting BB10 future

    my expectations are not so rosy, because of some of the management structure, and my fear of their ability to execute a sales and marketing strategy, but that's beside the point that there are no facts supporting RIM couldn't survive as a niche player
    05-31-12 12:42 PM
  13. kennyliu's Avatar
    The facts show their user base is steadily growing.
    But the market share is dwindling. In other words, RIM's user base is growing at considerably slower rates than the smartphone market itself.
    05-31-12 12:44 PM
  14. _StephenBB81's Avatar
    But the market share is dwindling. In other words, RIM's user base is growing at considerably slower rates than the smartphone market itself.
    and that has financial relevance to a company's ability to maintain operations?
    Thunderbuck likes this.
    05-31-12 12:50 PM
  15. Thunderbuck's Avatar
    But the market share is dwindling. In other words, RIM's user base is growing at considerably slower rates than the smartphone market itself.
    Bingo. Yes, they're still growing. No, they're not growing at the rate the competition is.

    There's some controversy on just how important market share is in the current market, which is still far short of maturity.

    Sony actually holds an even smaller market share; I don't hear anyone saying THEY should go out of business. Oh, they're also losing money, too. Ditto Nokia.

    I'm not going to pretend RIM's in good shape, by any stretch, but it isn't as bad as some would have us believe.
    recompile and Stewartj1 like this.
    05-31-12 12:53 PM
  16. jonty12's Avatar
    But the market share is dwindling. In other words, RIM's user base is growing at considerably slower rates than the smartphone market itself.
    and....????

    They were a thriving business with 5 million users, with 12 million users, etc. They don't have to grow at the rate of the market to be successful. That's the beauty of going private... they don't have to "grow" at all, they can stay steady and do it without media pressure.
    05-31-12 12:57 PM
  17. kennyliu's Avatar
    and that has financial relevance to a company's ability to maintain operations?
    Absolutely. People forget about network effects.
    05-31-12 01:28 PM
  18. kennyliu's Avatar
    Bingo. Yes, they're still growing. No, they're not growing at the rate the competition is.

    There's some controversy on just how important market share is in the current market, which is still far short of maturity.

    Sony actually holds an even smaller market share; I don't hear anyone saying THEY should go out of business. Oh, they're also losing money, too. Ditto Nokia.

    I'm not going to pretend RIM's in good shape, by any stretch, but it isn't as bad as some would have us believe.
    Sony doesn't rely on its own OS, whereas RIM does. And as I mentioned above, how successful an OS is is largely dependent on network effects.

    Besides, Sony's operations and product portfolios are much more diversified than RIM's.
    05-31-12 01:29 PM
  19. Stewartj1's Avatar
    I'm actually hoping they announce taking the company private during the earnings call so they can regroup and get the job done. Can you imagine how much time and effort that would free up??
    05-31-12 01:32 PM
  20. katiepea's Avatar
    sorry but a company with an expanding user base doesn't have over $1 billion in products sitting on shelves unsold.
    05-31-12 02:11 PM
  21. sosumi11's Avatar
    The article does not mention the fact that handset only makers are not thriving. As much as RIM produces (produced?) a good product, only price and true innovation will drive this sector.

    And if price is the deciding factor, then RIM will become another Dell...living on tiny margins on a commodity product.

    RIM is obviously building toward an exit scenario with BB10 being used as bait. Just as WebOS lured HP.

    However, what can a new owner do that RIM couldn't? RIM has the cash. They have the brand. But nothing saved the typewriter, CB, PDA or other placeholder tech industries.

    Sometimes one just has to step back and actually look at the big picture. And I don't see "phones" being in their current form in the next three years.
    05-31-12 02:26 PM
  22. sleepngbear's Avatar
    First off, thanks OP for a much-needed breath of fresh air around here.

    Yep - just like Palm and Nokia.....
    Spoken like a true iPhan. And you people wonder why you get slapped around so much in here. RIM is not Palm, and RIM is not Nokia. Besides the fact that one of those also isn't dead yet.

    But the market share is dwindling. In other words, RIM's user base is growing at considerably slower rates than the smartphone market itself.
    Market share trend is an insignificant metric right now. The fact that their customer base is expanding and not declining is a huge positive for a company that is in the process of rebuilding itself almost from the ground up. And their decent cash position and negligible debt means they can withstand a few quarters of operating losses, especially considering that they are nearing the end of executing a major turn-around plan. It would be a different story if they had waited until the losses started being reported to start the rebuilding; but that is not the case. Yes they could have started sooner, but there's nothing we can do about that now, is there.

    This is not guaranteeing that everything will come up roses; RIM's long-term success still depends on perfect execution of BB10 on all fronts. The two key positive points here are that the company will be around long enough to see BB10 through; and, if that is successful, it will be leaner and more nimble to be able to more quickly adapt to future market changes and not get caught with its pants down again.
    05-31-12 03:13 PM
  23. OzarkaTexile's Avatar
    Sony doesn't rely on its own OS, whereas RIM does. And as I mentioned above, how successful an OS is is largely dependent on network effects.

    Besides, Sony's operations and product portfolios are much more diversified than RIM's.
    Every division of Sony loses money except for their financial services division.
    05-31-12 03:34 PM
  24. PineappleUnderTheSea's Avatar
    RIM is not Palm, and RIM is not Nokia. Besides the fact that one of those also isn't dead yet.
    I pointed out in another thread (had to do with the press being so negative) that a reason for negativity might be due to the past performance of tech companies who got into trouble. So here you have Palm and Nokia, but you could also look at others such as Yahoo, HP, heck even Nortel or Corel, their issues persist even after restructuring and layoffs.

    So of course RIM is none of these companies, but it is far easier to count how many tech companies are having trouble staying relevant as opposed to counting the ones that pulled off a miracle and thrived.
    morganplus8 likes this.
    05-31-12 03:36 PM
  25. PimpMyBBM.com's Avatar
    The biggest problem right now is controlling the damage that denial has caused them for the past year. The new CEO seems to understand that acknowledging problems is a must, which is the complete opposite of what the old management did.
    Stewartj1 likes this.
    05-31-12 03:44 PM
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