BlackBerry maker, Research In Motion, recently released disappointing Q4 2012 financial performance results. New CEO Thorstein Heins has acknowledged RIM is in need of significant changes if it is to survive, much less stay relevant. The odds are heavily stacked against RIM at this point, but there are still things the company can do to regain its footing in the market.
While some believe licensing the BlackBerry OS is a potentially winning strategy, it’s not going to work. The simple truth is the BlackBerry OS is no longer cutting edge and has fallen behind Android and iOS. Why would HTC, LG, or Samsung license the BlackBerry OS over much better alternatives? There is no conceivable reason.
In order for RIM to pull out of its downward spiral, it must make bold moves and recognize the “triumph of software over hardware”.
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Adopt Android OS and maintain its own App Store
RIM is too far behind to establish a developer ecosystem for this generation of smartphones; it needs to accept this fact and use Android. Amazon’s success with the Kindle has shown that Android can be used as a foundation for creating a unique experience. Because Amazon has heavily modified the Android OS, it can’t use Google’s cloud services like Google Play (the Android app store formerly known as Marketplace). But, Amazon has shown that building its own cloud services and custom apps (e.g. Silk, Kindle Reader app) is actually a benefit. It allows Amazon to monetize the app marketplace by taking a cut of in-app purchases just like Apple.
RIM should follow in Amazon’s footsteps and deliver a new OS for its smartphones and tablets by customizing Android (to support RIM’s unique push mechanism) and integrating BlackBerry’s great email functionality as an app. RIM still makes a better phone than most Android smartphones, and I’d gladly purchase a BlackBerry that has the great email functionality one expects from a BlackBerry but happens to run Android so I can take advantage of the large library of apps for the Android platform.
Partner with Walmart to deliver an answer to the Kindle
Tablets have become popular devices for shopping and watching videos. RIM isn’t in a position to maintain its level of investment and focus on the consumer market. It needs to protect its core enterprise market and find a partner for the consumer market. That partner is Walmart. That’s right, Walmart. Amazon is one of Walmart’s biggest threats, and the Kindle is as much about making it easy for consumers to purchase physical goods from Amazon’s website as it is about purchasing Amazon’s digital goods (video, music, books). A partnership with RIM will give Walmart a credible tablet with which consumers can easily make online purchases from Walmart.com as well consume video from Walmart’s Vudu video service.
Walmart would provide RIM with a large-scale consumer retailer able to drive high volume sales of the BlackBerry Playbook, purchasing power when negotiating with suppliers, and enough volume to generate meaningful revenue from a new Android-based app economy.
Attack the enterprise market with integrated solutions
With a modern mobile OS in place and a strong partner for the consumer market, RIM can re-focus on innovating and protecting its core business market. While smartphones have been mostly a consumer phenomenon to date, they are increasingly pushing into the enterprise market, and RIM must thwart this encroachment in order to survive. RIM’s superior security and email capabilities give it some breathing room. By innovating on top of Android, it will be able to meet the needs of enterprise IT managers under increasing pressure to support smartphones and apps at work. Enterprises need a way to securely distribute internal apps via a corporate app store; they need the ability to protect corporate data that is stored on devices along with employee personal data; they need a way to make data available from internal corporate systems (such as SharePoint, SAP, and custom developed solutions) available via apps for employees while maintaining security. RIM can provide a tightly integrated software, hardware, and cloud solution for the enterprise much like Apple has done for consumers.
While it still may turn out to be too late for RIM, these bold steps would give it a chance to leverage its strengths, stem the bleeding, and strengthen its position so it can potentially mount a stronger comeback down the road. Holding onto the belief that the yet-to-be released, and already delayed, BlackBerry 10 OS will turn things around is not the answer for RIM, nor is licensing its OS and email technology to others. It will take bold steps and a willingness to walk away from long held beliefs, but if the sales and revenue figures continue to erode as they have, there is little left to loose.
Alex Castro was founder and CEO of Delve Networks, a leading online video platform acquired by Limelight, where he served as VP/GM. He has an extensive background in cloud computing, digital media, mobile devices, and SaaS business application. Previously he worked for Amazon and Microsoft.