As Johnny Ringo said in Tombstone – “Smell that Bill? Smells like someone died.” It sure is looking that way for RIM, the once dominant and undisputed smartphone market giant. With an enormous business user base, RIM failed to convert that into the consumer market. As the iPhone hit the market, the beginnings of RIM’s decline in the smartphone market was immediate. That was been followed by a swarm of Google’s Android devices and the manufacturers behind them. So much that their market share has gone from one time dominance to where it is now forecast to 5 percent or less.
Despite gloomy predictions and a recent 30% workforce reduction, RIM’s CEO Thorsten Heins publicly assures that there is nothing wrong with the company.
“This company is not ignoring the world out there, nor is it in a death spiral,” Heins told the CBC.
“Yes, it is very, very challenged at the moment — specifically in the U.S. market. The way I would describe it: we’re in the middle of a transition,” he said. “All that is in the making, it’s in the works. This company is in the middle of it and I’m positive we will emerge successfully from that transition.”
As cheerful as that may sound, and while there are a number of points of glimmer and even a potential way out, there remains a question of whether such a comeback is likely. They rest their hopes on a continued presence and share of the worldwide market and the delayed release of Blackberry OS 10 (BB10). Blackberry OS 10 is RIM’s albatross whose release has been delayed until the first quarter of 2013, more than a year later than once announced. The entire future of the company appears to rest heavily on the release, and it is hoped that when it is released that it will be accepted and pave the way back to significance in the smartphone market.
RIM’s board is said to be seriously exploring options, these are hard decisions to be sure and were perhaps unthinkable not so long ago. Those options likely include a sale, and the list of speculative suitors could include a number of names. It could also mean RIM may break up the software and hardware components of the company. In fact, it was recently rumored that Microsoft had offered to run their Windows 8 phone operating system to run on Blackberry hardware handsets at one point. Whatever the company is considering behind the scenes, it is clear that it has fallen behind in development and delivery; the product as a whole has taken significant reputation damage. The current business model cannot and will not stand, the writing is on the wall and they must reorganize and execute or face a break-up.
The pressure for BB10 to perform is so significant, there can be little room for error. Even still, RIM must deal with the unlikely challenge that the enterprise, their traditional base, will accept and reconsider their revamped offerings once the new OS does arrive. This does not appear likely as the company has traditionally not been well-known for outstanding support and their history of significant regional service outages and subsequent lack of timely response hardly serves the needs of the enterprise well. The Microsoft offer may be their only tangible lifeline. If the Microsoft arrangement isn’t formally announced soon, the play will indeed be on BB10. We could be looking at RIM’s last stand.