Saving Private RIM

Today, RIM’s situation isn’t nearly as dire as Apple’s was then. Unlike Apple, it doesn’t need a cash transfusion and, in the words of Thorsten Heins, RIM’s new CEO: “If you look at the platform it’s still growing, if you look at the devices we’ve got a single phone that’s sold 45m units.” RIM will pull off an Apple-like rebound and live happily ever after.
Equating RIM 2012 with Apple 1997 is, in so many respects, delusional. With Microsoft’s 95% market share, it wasn’t even a two-platform race. Second, ecosystems. In Stephen Elop’s ringing (if infelicitously timed) words, yesterday’s platform struggles have become all-out ecosystem wars. How will RIM’s approach be different from – or better than – the competing ecosystems?

RIM acquired QNX, the foundation for BB10, a mere two years ago. Weren’t most of these engineers already on board when RIM fell asleep at the switch?

Using Apple 1997 as the model for turning around a once-great company invites challenging comparisons. The prodigal Jobs returned to Apple having known stellar business success with Pixar, and just-as-stellar lack thereof at NeXT (despite the company’s technical prowess). Heins, by contrast, is an insider. RIM’s CEO has conceded that the company might have to license its platform:

Dumbfoundingly, the licensing idea (which, presumably, will include BlackBerry Messenger), has been met with approval: “RIM is in trouble and is seemingly finally listening to reason.”

This gambit doesn’t work. The Mac clones quickly underpriced the original products and siphoned profits out of Apple’s income statement. If it decides to license the software layer of its (formerly) proprietary platform, RIM will indisputably see hardware dollars disappear much faster than software licenses can be signed. If RIM wants to do something bold, such as focusing on software and services, it might consider taking the company private. In theory, the company re-emerges smaller but stronger, with a highly profitable software and services business model.

Will this work for RIM?


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