Predictions 2012: Will RIM sink or swim?

Each year, the IT World Canada editorial staff locks itself in a boardroom, dissects the year that was and prognosticates on the year to come. It’s an hour of reflection, discussion, argument, passive-aggression and often foul language. This is the first in a series of more-or-less verbatim  transcripts of our 2011 round table, with the hemming, hawing and name-calling excised for the sake of readability.

Today’s transcript focuses in the future of Waterloo, Ont.-based Research in Motion Ltd. (RIM), whose woes made frequent headlines in 2011.

Dave Webb, Editor, ComputerWorld Canada: Let me kick it off by throwing this one out there: What’s RIM going to look like this time next year?

Paolo Del Nibletto, Editor, Computer Dealer News: I think they’re going to make a turnaround.

James Speedy, Staff Writer, ComputerWorld Canada: Not a chance.

Mike Lazaridus (left) and Jim Balsillie are the embattled co-CEOs at RIM.

Webb: I don’t think they’re going to exist in the form that they exist right now. Somebody buys them, or there have to be radical changes there, because they are not going to get their foot in the door in consumer technology against the Apples of the world. I think they have to focus more on enterprise

Del Nibletto: I’m sort of walking the plank on this one, but I read (analyst) Rob Enderle’s report on RIM and I’m buying what he’s selling. He says it’s great technology, but they haven’t developed a strategy for mass market, and their new devices rock with end users, so I just think if they have someone that can develop a mass market strategy and communicate that well in 2012, they’ll rebound.

Jeff Jedras, Assistant Editor, Computer Dealer News: They have a mass market strategy. There were line-up this week out the door in Indoenesia for the new BlackBerry devices. But the media is so focused on North America that those things don’t get the same play.

Speedy: But what’s the cell phone user base in Indonesia compared to North America?

Jedras: BlackBerry’s big in India, which I think …

(Indecipherable passage as everyone talks over each other, trying to name markets where the BlackBerry is big).

Webb: .. pretty much everywhere but North America, really.

Del Nibletto: Their margins are better, too.

Jedras: They’re bigger outside North America than inside North America.

Speedy: That’s the thing. Can you make money without being big in North America?

Brian Jackson, Associate Editor, ITBusiness.ca: Look at Nokia. They were the top smart phone manufacturer for years, until very recently, and their markets were almost all Asia-based. They owned the Pacific regions.

Howard Solomon, Assistant Editor, Network World Canada: I’d like to weigh in with a report from National Bank Financial, which notes that the iPhone leads in smart phone customer loyalty. iPhone users are the most loyal, with 93 per cent of owners in the U.S. saying they would probably or definitely purchase another iPhone. Eighty-eight per cent in Europe. They’re quoting a Strategy Analytics survey in August and September. In the United States, RIM was third in customer loyalty with 72 per cent.

Jedras: Apple fans are lemmings.

Speedy: It’s not that they’re lemmings. You want to know why they’re going to stick with an iPhone? Because you buy all of those apps and you invest in it. When you get your next i-device, they carry forward. If you don’t, you lose all that. It’s not even customer loyalty, it’s just an incredibly smart branding strategy.

Jedras: It’s a cult.

Jackson: One thing you’ve got to be concerned about with BlackBerry is their apps store has never really taken off.

(More indecipherable arguing, the gist of which is, it depends on what you want a smart phone for whether that matters or not.)

Jedras: Teens aren’t looking for apps, they’re looking for messaging.

Jackson: How are they making their money off of messaging? You’re not making money when people are exchanging BBM messages. Look how much money Apple is raking in from the iTunes store and App Store.

Jedras: There is a significant portion of the market that does not want smart phones.

Jackson: You can’t just own the market. You have to upsell once you own it. Apple does that very successfully.

Shane Schick, Editor-in-chief: There’s one way that RIM can do it, and I think somebody mentioned it. They talked about RIM getting more focused on business. There may be a lot more iPhones in corporate enterprises, but one thing RIM has still in corporate enterprises is the BlackBerry Enterprise Server, something that actually manages all these devices. Wouldn’t it be interesting if, realizing that it’s losing ground in the handset business, RIM decided to extend the capabilities of the BlackBerry Enterprise Server to manage iPhones and other competing devices?

(PRESCIENCE ALERT: This observation was made less than a week before RIM announced its Focus smart phone management platform, which allows single-dashboard management of RIM, Apple and Android devices.)

Jackson: Another way they could branch out their business is with their new acquisition, QNX. It’s actually integrated into all sorts of hardware, aside from cell phones.

Speedy: They’re big in cars.

Jackson: And QNX has presence in all sorts of machine-to-machine technologies.

Speedy: But how do they tie that back to BlackBerry? They can’t make it one device. They have to make it useful with everything. It can’t just tie into BlackBerry. It’s still just going to be them selling QNX. What are they going to do different with that?

Jedras: They can be an open platform. Take the opposite approach of Apple, where you have to have all of our stuff or it doesn’t work.

Del Nibletto: Don’t forget something here about the business side of it. We’ve all interviewed lots of CEOs, and one thing they’ve told me a lot is, it’s okay to be No. 2. You still make a lot of meoney, you still make a lot of shareholders happy by being No. 2.

Webb: But they’re not making shareholders happy.

Harmeet Singh, Staff Writer, Computer Dealer News: And they’re not No. 2.