It is hard to pick up any Canadian newspaper or listen to any Canadian television news program without getting the latest update on the fortunes of Research in Motion (or RIM as it is affectionately known). The two founders who said they would never step down, did in fact do so. Their replacement is an internal corporate type who does not seem to engender the kind of pizzaz that seems to drive technology companies.
I have read (and reread) the current book on Steve Jobs. Setting aside his persona (which at best was bizarre and at worst was inhumane) I consider the book to be one of the finest business books written in recent years. It is a textbook on how to get creative people to work together, how attention to detail trumps "the big picture" and how looking at products from the customer's perspective "changes everything". When asked if he worked with focus groups on the iPod, Jobs shot back: "Did Bell work with focus groups when he invented the telephone?". Make it well and they will come. The most fascinating aspect of the book was what his co-workers called Job's "altered reality". Jobs believed that if he said it enough times, asked for it enough times, insisted upon it enough times (the "it" being any objective that others said couldn't be done) it would eventually get done Jobs' way. Most business is about making compromises. Job's approach to business is that if the product was good enough it would engage his customer.
When Scully took over the company after Job ran it into the ground, he, in turn, ran the company into the ground. When Jobs returned to the company some years later his first job was to review every product that the company made and focus on the "core products" that the company made well. Employees who did not subscribe to Job's view found themselves out of work. I had always wondered where Jobs thought that he could take over the music business when Sony had invented the Walkman. The similarities between the iPod and the iMac is that they are a consistently integrated business. The iMac was a completely close ended system that encapsulated both hardware and software. The iPod was a completely close ended system that encapsulated both hardware and music content. The iPhone was less a telephone and more a computer and web surfer in the pocket of the owner. The iPad was fully integrated to the iMac and iPHone. Outside developers' applications (apps) drove the demand for the phone and the tablet: utterly brilliant.
RIM had a brilliant idea too: integrate a telephone with a device that had access to a close ended email system. As other "smartphones" began to use webmail email accounts the singularity of the close ended email system began to fade. Sure, Blackberrys ran on dedicated servers but not everyone needed high ended security.
Also, there were disturbing demands from countries that wanted the right to peek into email accounts that email security had to, in some small way, be breached. The close ended email system was not so close ended. However, where RIM seemed out of touch was that the phone and even the email service was a small part of the consumer satisfaction as it related to the phones. People wanted to surf the web and see webpages as they saw them on their computer. They wanted to play games. They wanted apps that were business friendly. Little or none of this could be done on the Blackberry. When RIM decided to offer its web-ready phone it was too late for the North American markets. Blackberrys sell well in emerging markets where web-ready phones are less popular but that will end soon. The Arab Spring was fuelled on
Facebook and Twitter--both web based applications. So, it appears, that RIM is selling into a dwindling market. Web based phones are now carrying apps developed by their employers where job related tasks are now being done on their iPhones and iPads.
RIM is not the only company that is suffering. Smart phone companies worldwide are hurting. The phone itself has become a commodity. It's what else they do that counts. So Microsoft has developed an operating system that's pretty good. Google has done the same. But these operating systems have a ways to catch up to Apple. Notwithstanding Jobs' decease, Apple users form a formidable cult. A recent survey indicated that while general computing systems in large corporations are PC based most of the bosses and senior managers sport Apple gear.
RIM's next mistake was to follow Apple into the tablet market. Aside from producing a clunker it failed to realize that it was not in the same business as Apple. The iPad was mainly entertainment--really a large iTouch. RIM was not. It should have stayed out of the market and let the others blow their brains out. Tablet sales, other than iPads, are dismal. Apple apps numbered in the hundreds of thousands; RIM developers quickly deserted the company.
Where does RIM go from here? It has enough money to withstand the onslaught for some time. It should not be dismembered a la Nortel. It has an admirable R&D facility. However, it should stop following and start leading. It has gone through stage I of the Apple saga--that of near ruin. It now has to go through stage II--that of renewal and reinvention. It's biggest asset is its innovation and its entrepreneurship. All it has to do is to use these assets on the "next big thing". Apple was rescued from bankruptcy by Jobs' altered reality. RIM has to do the same thing.
Bernie
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