Matt Martorana & Andrew Terefenko
MacDebate & the Silhouette
Q: Will Research in Motion be able to survive the year in light of its recent struggles?
Matt: With Jim Balsillie and Mike Lazaridis stepping down as Research In Motion’s co-CEOs, RIM hopes to send a message to its investors that it is ready to make the necessary changes that will turn the course of the company around. Despite this change in leadership, I argue it is unlikely that RIM will actually have renewed success. The main problem that RIM faces is their failure to innovate against their competitors. RIM’s Blackberry and Playbook offer nothing to consumers that other smart phones and tablets – from Apple, for example – do not already offer. This poses a serious problem.
If RIM cannot increase its customer base, it will not be able to survive in the competitive market. In the case of Apple products, users have access to millions of “apps” that can perform almost any action. RIM’s competitors are making further innovations to their products while RIM is not. In the case of the Blackberry, one may argue that BBM is unique to RIM, but BBM alone is not enough. (iPhones now have a feature called iChat that does many of the same things as BBM.)
Others may argue that RIM has now created a number of apps for the Blackberry, but the selection of apps for the iPhone is much wider. It is difficult to see how RIM can innovate its products to make them more attractive to the consumer, and hence why I feel that they will not be able to turn the fortunes of their company around.
Andrew: As a company, RIM has had a lot of trouble dealing with the innovations of their competitors, but I feel that their chief executive board was aware of this in their most recent choice of CEO. By promoting industry-veteran Thorsten Heins, they know full well their need to draw upon his extensive R&D experience to come forth with a new flagship product. Having risen from his starting position to CEO in only five years, coming from his highly relevant previous position as Chief Technology Officer at Siemens AG, he will be a great asset for a company that desperately needs to reinvent both their public image and their core product. In a recent video he posted to the web, he outlined a few key concrete plans he has for the company, which bodes well for a CEO who has to take the reigns of a fairly tumultuous corporate entity.
Matt: The appointing of the Thorsten Heins to be the new CEO may be a great short-term solution, but I am skeptical about how this will impact RIM in the long run. Besides luring customers away from Apple and other competitors, RIM also needs to ensure that its own clientele will not switch from using RIM products to Apple products (or products of any other competitor). This has proven to be a difficult task, especially in the last year, in which RIM experienced two network failures. These network failures have created great disdain and mistrust between consumers and RIM. The Blackberry was supposed to be a dependable phone that the businessperson could rely on, but these failures have tarnished that image. This trust with the consumer is especially difficult to gain back when RIM’s competitors do not have a track record of network failures. Although appointing a new CEO may seem like a step in the right direction, I question whether this CEO will be able to do anything different than what Balsillie has already done.
Andrew: The recent three-day service outage was certainly inexcusable for a device that many rely on for day-to-day activities. On that note, RIM sincerely realized the failure on their part to ensure a reliable product and, to that end, offered $100 worth of free apps to affected customers as a gesture of goodwill. Additionally, it can be speculated that the CEO change was a response to that same outage and poor fiscal year. If their Board is willing to go as far as replacing the two co-founders of the company, they can be counted on to make drastic changes for the better future of the company.
Matt: RIM has always been a leader and innovator in targeting the business community. I would agree with anyone who claims that there is no better phone for business than the Blackberry (although I am sure some may disagree). But in the last year and a half, RIM has tried to expand their products from the business community to the consumer market. So far they have failed to reach the consumer in the way that many of their investors had envisioned.
I see no reason why in 2012 RIM should be any more successful in reaching these consumer markets. Many of RIM’s competitors have bigger budgets and more human capital so that they can put out a better product. Thorsten Heins may be aware of the problems that currently plague RIM, but this does not mean that he is equipped to solve these problems.
Andrew: It was not premature for RIM to try to enter the highly congested consumer market, but it was clear that their marketing model did not succeed. That being said, it is clear through Heins’ initial ascension statements that he has big plans for the company, as far as a decade away. He wants RIM to go back to what it became famous for, and also its namesake, that being of research. Under his leadership, the company will put a far greater focus on R&D and quality assurance if his plans come to fruition.
Despite that, 2012 will still be a difficult year for RIM, as they come to terms with bad press and unknown leadership, but it is because of their renewed drive to innovate that I believe their future may not be so grim. They conquered the business world with their aesthetically professional, compact and surprisingly durable device, and with many consumers’ aversion to using touch-screen devices, the Blackberry will still see many years of use in light of their competitors’ extreme focus on removing buttons altogether.
They may have fallen behind in the communications race, but clearly have the right set of ideals needed to get back to their former glory.