I have just doubled my position in Research in Motion Ltd. stock after being a shareholder for more than 10 years.
Last week, I flew to Orlando to attend RIM’s BlackBerry World conference along with 6,000 others. I wrote an article here outlining the challenges I saw for RIM and how I planned to use this conference to gain insight into the company’s future. In three jam-packed days, I got more answers than I had hoped for.
In last week’s article, I focused on the need for RIM to become a stronger software company and to reflect this strength in developer tools and compelling applications. In my mind, software execution is more important than marketing, more important than hardware, and poised to be the crucial factor in moving the stock over the next 12 to 24 months.
RIM started off the conference with the announcement of the new BlackBerry Bold 9900, featuring a super-fast processor, powerful graphics, a touch screen and physical keyboard, along with the new BlackBerry 7 operating system. I was shocked by how light, thin and fast this device feels. Even though this is still a “legacy” Java operating system, it delivers a great user experience.
I realize there is short-term risk in buying stock because RIM absolutely has to get the new BlackBerry Bold and other devices out in time for back-to-school shopping late this summer. If they miss this window, the stock will get crushed. Judging from the demo unit I tested, though, I think the chances of a miss are small: It feels close to being market-ready.
The real story here is about three companies that RIM has acquired over the last year: QNX Systems, Torch Mobile and The Astonishing Tribe (TAT). They bring to the table a new operating system, a fantastic web browser and, in a first for RIM, slick user-interface design skills.
We’ve already seen the QNX operating system and Torch browser implemented in the recently launched BlackBerry PlayBook. The Swedish TAT team is now poised to solve one of RIM’s most visible problems – a lack of what RIM co-chief executive officer Jim Balsillie refers to as “consumer delight.” Too many of RIM’s applications lack the good looks and suave effects of Apple’s iOS and Google’s Android operating systems.
Let me tell you about the fall of 2008, when RIM held its first BlackBerry Developer Conference, which I attended. Apple had just released the iPhone 3G, and it was a weird time for RIM: Inside the conference presentations, the topic was BlackBerry, but in the hallway, everyone was talking about getting busy with iPhone development. There was concern over RIM’s future, and I would say that this concern continued during RIM developer conferences in 2009 and 2010.
Last week in Orlando I detected the return of BlackBerry enthusiasm among developers. QNX, Torch and TAT are the primary reason for this, helped by a partnership with Adobe. This technically savvy audience is buying into the reinvention of RIM.
Why is this not reflected in the stock price? The Street is too distracted by the near-term shortcomings of the new products, such as the PlayBook, and RIM’s recent profit warning, driven by a slip in BlackBerry 7 launch timing.
There is no denying that the PlayBook is unpolished. It is riddled with relatively minor bugs, and the BlackBerry Bridge app, which lets you get e-mail on the PlayBook, is far from a perfect experience out of the gate.
But the bones are solid. The way developers responded in Orlando is akin to watching an architect look at a beautiful piece of undeveloped coastline. And the new developer tools that are either available now, or will be within the next few months, are akin to the building materials that the architect uses to craft the house of your dreams.
Ask anyone where else RIM has fallen down and you’ll inevitably hear about poor marketing. I agree that the company has done a poor job communicating its capabilities and road map to investors and the media. But there is hope even on the marketing front.
In Orlando, RIM had attendees saying things like, “This was the best conference I’ve ever attended.” How did they achieve this? They put on a good show, but they put on an even better party. They rented out half of Universal Studios and provided great food, music and an open bar. They also gave every single guest a free BlackBerry PlayBook. This set of decisions was probably the best marketing move RIM has ever made.
Apart from convincing developers that their new QNX-based BlackBerry platform will deliver the goods, they’ve just invested in 6,000 ambassadors who are walking around telling their customers how much they love their PlayBook.
That’s an uptrend I want to be in front of.
Hi, I'm Chris Umiastowski. I'm a 10-year veteran of sell side equity research and this is where I come to connect with friends on all things related to tech investing.
I appreciate your blog. I’m on the long side now, too (ouch). Looks like the price may collapse to US$40 or below.
But in fact, RIM is my best idea right now. I think that in one or two years, this stock will be soaring. I posted the following text in an investment forum, I’ll repeat it here.
I believe that the pessimisim about RIM is largely a case of information assymetry, or what we in France would call “nombril”izing (contemplating your own navel), i.e., (mis)-judging RIM from a US-centric point of view.
1) The Nokia Windfall — One set of figures for 2010 had, in the worldwide corporate/enterprise sector: BlackBerry=39%, Nokia=35%, other Symbian (mostly Japanese)=9%. Of course, this situation is invisible in the US, where Nokia’s share for its E-series phones is probably near zero. With Nokia shifting to Windows 7 (which has practically no security/enterprise features and no security track record), the Nokia share is up for grabs and a very large part should shift to BlackBerry. Enterprises will be buying not just the phones, but the whole BES server infrastructure. The blogger who details this best wrote that, if RIM can get its salesforce out and execute, “It should be a banner year for RIM’s corporate sales force, and the year the top salesguys buy their yachts and summer homes and luxury cars with their bonuses.”
2) BBM (BlackBerry Messenger). Analysts appear to believe that consumers outside the US are buying BlackBerry phones because they are the cheapest smart phones. So, when cheaper and cheaper Android phones hit those markets, Blackberry will be killed. Wrong. The incredible BlackBerry growth is mainly due to BBM. BBM is RIM’s “secret weapon” — at least, it appears to be a secret in the US. It may be going too far to say that these customers are behind a moat. But they are “sticky” customers, they are parts of large communities in which BBM is important, and they will not simply be switching over to other smart phones because they are cheaper. How important? The situation varies from country to country, but I’ll just provide one example using forum comments about the situation in Latin America: “And BB just dominates Latin America. As in if you don’t have BBM you’re not worth talking to dominates. // The Latin American thing is 100% accurate …you want to get some Latin girl action best be equipped with BBM.”
3) Enterprise adoption of the PlayBook. The PlayBook, exactly as it was rolled out (minus various software bugs and rough edges), is the exact answer to security-conscious CIOs’ prayers. One Canadian bank technology executive called the employee iPad pressure “the tyranny of consumerization.” The iPad has no corporate support channels from Apple, must be tended to by iTunes (really, a massive rollout of iTunes in the enterprise?), has no corporate purchase channel for apps (employees must use credit cards), is expensive to support, has security concerns, is difficult/impossible for enterprise app deployment (no Flash and no Java permitted), … The PlayBook will respond to all of these concerns. The “bridging” solution, so derided in the press, is precisely what will permit rapid rollout in large security-conscious organizations. The Canadian press described an insurer who had preproduction samples and already had its application written by the end of 2010 and was waiting to order 1000 PlayBooks — I believe there is a real pent-up demand in large enterprises for something more appropriate than the iPad, so strong that RIM had to get the PlayBook out the door even if the consumer side wasn’t ready.
4) The PlayBook is (or will be, when the final developer C SDK’s become available) a developer’s dream. It will be the most open/most complete development environment in the smart telephone/tablet world (except, possibly, Microsoft’s). The current situation for BlackBerry phones is a developer’s nightmare. So this change will be a major plus for RIM. Enterprise software development relies heavily on Flash and Java frontends (think SAP, Oracle, …). The PlayBook will be ideal for these enterprise needs. By contrast, on non-jailbroken iPads: it is impossible to use Flash or Java in web apps; it is now possible to port standalone apps by translating the Flash/Java into C and using the Mac development system (but only because Steve Jobs changed his mind after forbidding such translation, but who knows if/when he could change his mind once again).
5) Within the next year, RIM will come out with additional PlayBook models which will be more oriented towards consumers and small businesses (3G, 4G, also larger 10″ models). The initial takeup by enterprises and BlackBerry enthusiasts, along with the open development environment, will help attract app developers. My prediction: a year from now, RIM will be the #2 company in the tablet market, and may even outsell all the Android tablets combined.
6) If, as planned, RIM gets the bugs out of the PlayBook system and adapts it to phone-size devices (overcoming problems like controlling power usage and adapting finger-swiping control down to a smaller screen), then RIM will have some wonderful phones. Apple developed its appliance approach with a cut-down highly controlled system on small devices, and then moved it up to the iPad. RIM is developing a more powerful and open “mobile computing” platform on the PlayBook, and intends to scale it down to its phones. There is a real difference of approach.
I have read no analyst’s reports (no access), but I’ve read and collected many news stories about these reports. Only Citi’s Jim Suwa has been quoted about the Nokia windfall. I’ve seen no analyst mentioning BBM and RIM’s efforts to capitalize on it (developing sales channels in BBM, sharing this sales revenue with the telcos, etc). RIM is making determined efforts (both by buyouts and internal developments) to develop the social aspects of its products, both in BBM and the enterprise.
The headlines scream about RIM “losing market share.” The latest quarterly figures I’ve seen have RIM holding nearly constant in the number of phones sold in the US (which actually surprises me) (but losing market share because the smart phone sector is gobbling up the dump phone sector), tracking not far behind Apple in the European market, and still growing rapidly in world-wide figures.
A closing quote from Jason Perlow from the zdnet site: “… I should probably mention that not a single review [of the PlayBook] that I have read from the above mentioned authors or any of the others I have seen on the Internet from the usual New Media bloggerati suspects has been written from the perspective of an actual technologist working in enterprise environments, which is the target demographic the PlayBook is made for. This is roughly analogous to Consumer Reports or Car and Driver doing a 100 point evaluation of the M1A2 Abrams Main Battle Tank and criticizing it for lacking sufficient cupholders and getting crappy gas mileage.”
Alan
PS. I live about 45 minutes from where you will take your vacation … have a nice one.
Alan – your comment is detailed, and really great. 45 minutes from Marseillan? What village? That’s awesome! We are excited to get there, especially after it’s been raining for nearly a week here in Toronto.
I agree with you, obviously – that’s why I’m long.
Most of the bullish analysts / investors (and even the bears, I’d say) are aware of the BBM strength you mentioned. The bears know about it but think it doesn’t matter. They think BBM is not sticky. They think everyone in the world just wants a touch screen. It’s completely moronic to think that everyone wants a pure touch screen. Is there a huge market for such phones? YES. Does everyone want one? No – not even close.
Great reporting on BW and what’s happening with RIM now, but I see nothing new here. No doubt the people attending were enthusiastic but why are he people attending any different from parishioners at a church. They too buy into their ‘religion’.
The ‘bones’ may be good, as you say, but I’d say the devil is in the details and that’s where RIM is faltering. Its the thousand little details that RIM seems to have problems with (and these things that contribute to the ‘suave’ effect that both Apple and Android have). Execution is another problem and RIM hasn’t shown that they can execute for a while now and are way behind the curve. Everything with them now seems to be next year, in a few months, etc. Apple would never release a product like the Playbook and, unlike RIM, when Apple announces a product, it’s in the retail pipeline pretty soon thereafter.
I guess I don’t fully understand why someone should have faith in RIM right now. Sure, the stock is cheap compared to what it was before but that isn’t a reason to buy.
That’s a rather revisionist view of Apple’s product history. Especially given the 10-month delay of the white iPhone and the “bug” that is going to have them in front of a Congressional panel. Apple has been able to push off most of their problems onto AT&T and the pundits(who are mostly Apple users) repeated that idea.
You actually think not having a phone in white is not a big deal given there was a black version? As for the bug, Apple has already fully explained that and it’s already been corrected. Neither issue has affected Apple’s sales in the least.
I would proffer that if RIM was in Apple’s shoes they likely would have released the white phone with the light issues and still wouldn’t have issued the update to correct the location issue.
Meant to say: You actually think not having a phone in white is a big deal given there was a black version?
(damn there’s no edit feature on this blog!)
Edit only works for me
But I don’t edit other people’s comments unless they are being truly unprofessional! It has only happened once.
You are changing your argument. You said that RIM’s problem was execution and said that Apple would never release a product like the PlayBook. But they released the iPhone 3G with a malfunctioning 3G radio stack. They still can’t prevent the device from being jailbroken. That’s a big execution problem.
Saying that Apple’s inability to execute hasn’t hurt sales is a much different argument than the one you were putting forth.
Noel – of course you don’t see anything new. You didn’t attend, did you? The people in attendance are not like church goers, unless you know people who participate in multiple religions (I don’t). They paid their ticket to go, and they develop for multiple platforms in most cases. Almost nobody is “exclusive” to RIM. Why would they be. This is not a religious thing.
I know you don’t understand why people have faith. It’s probably because you’re reading the consensus views our there and not doing primary research. That’s fine. If you have no position in the stock you don’t need to do the work. I completely understand.
I don’t think one has to attend BW to make a judgement (especially with your good reporting on the goings on).
Ok, so my analogy wasn’t the best, but I think most know what I am getting at. Those attending were mostly believers.
I do my own primary research. I just didn’t attend BW. One does not have to have a position in a stock to do research. I didn’t have a position in the stock in 1998 either just before I decided it was a screaming buy.
I thought the analogy was just fine. It’s like people saying the attendees at Mac world are all drinking Steve jobs cool-aid, same difference. These BB fanboys are running out of ammo and are choosing to attack minute details of your post. All the numbers (decreasing unit sale price, margin, marketshare, unit sales volume, apps, stock price, analyst downgrades, etc) says the same thing, RIM is sinking, albeit slowly. What the fanboys have chose to do is ignore reality and instead live on hope, faith and perhaps a bit of prayer, which is fine, it’s their money, they can do whatever they want.
Jack – not everyone who goes to MacWorld drinks the kool aid either. You’re missing a HUGE point. Developers are not idiots. They would HAVE to be if they pick one platform and stick their head in the sand, ignoring the potential value of other platforms.
I’m talking about professional developers here, not hobbyists.
Professionals will have their eyes and ears open to all major platforms to maximize their revenue and profit. They go to all of the major OEM or OS developer conferences.
Yes, the crowd is going to be more BB centric at BB World, but it is the same crowd that was scared about RIM’s future in October 2008. SAME crowd.
You are a scientist. You get the importance of measuring change by holding many variables constant while changing others. The crowd was our constant. The platform tools are what have changed. The result – overwhelming change in attitude.
Noel – I think you’re missing my point in the article. I am drawing a conclusion on the enthusiasm of developers based on the change I’ve witnessed when compared to other devcon and BBworld events, attended by the same “believers”, as you call them. It’s the change that I’m noticing. Same crowd.
You may not realize it but devs have to hedge their bets too, and attending these shows can be fun for them. So they attend, even if they are skeptical of a platform’s future. They want to be sure. That’s why they go. They network, they talk, they figure things out too.
I understand what you are saying. I just don’t buy that it will translate into the sales increase RIM needs to meet their earnings this year or next.
I applaud your enthusiasm Chris but RIM is a sucker’s bet right now. Jim Cramer has this on ‘sell-sell-sell’ (I just find that funny). Anyways, RIM may very well mount a comeback, who knows, but what I really fear is their 2011 EPS. They cut the quarterly EPS but didn’t touch the year’s EPS, which implies (and they also said it) that they’re expecting a blockbuster second half to make up for the lackluster first half. Now, given that we know QNX is not arriving this year on the phones, given the the new Bold 9900 is nice but certainly no game changer, given that Playbook sales seems to indicate good response but nothing to jump up and down about, I don’t see them going through this year without another round of warnings. Which of course, would lead to another 14% bloodbath.
Like I said before, the downside risk is much greater than the upside benefit. Wake me up when they come out with a killer phone with full size screen realestate, great user experience, awesome browser capabilities, and some good games. Not just great email. And when that happens, hopefully its QNX based so that I don’t have to throw that phone into the garbage when they change platform.
Good luck on your position. Its certainly a contrarian stance (usually that’s not a bad position). Fortune, favors the bold (but not the Bold 9900, that’s just no big deal).
Let’s talk again in 6 months. You’re missing the big issue of what’s priced into the stock. Your take on Bold 9900 and Playbook is not shared by all. Held a 9900 in your hands yet? I have. Lots of people are going to salivate over this thing.
So let’s just get this on record, 6 months from now (November), I say RIMM will be below $50/share. we’ll bet a nice dinner shall we? True that I haven’t held a Bold 9900 yet, but by the looks and description of the thing, silver metal band around it, being an owner of iPhone 4, well, maybe I have held the Bold 9900 before.
Hey if you wanna fly to Toronto or meet in SF sometime (we can take Simon out) then YES. But be a man about it, ok? Don’t give me a strike price that’s out of the water. I’ll still take the bet, but if you’re so negative you should be quoting me today’s market price as the over/under. $44.23 as of yesterday’s close (sorry it took me too frikkin’ long to reply to you). Call it $45. If you accept this then I accept you as a true bear on the stock. Otherwise you’re a closet bull
DevCon is in San Fran Oct 18-20. That should be a catalyst.
Jack – you remember what the Bold 9000 looked like? Metal band around it. Guess which device came out first, the iPhone or the original Bold. It is comments like this which make me believe you aren’t able to look honestly at the situation. Remember, I’ve happily pointed out MANY of RIM’s flaws, and there are many. So many.
I find it interesting that some people think that the path to success for RIM is “make another iPhone!” I doubt that following directly in the path of another company’s strength is a great way to build a great business.
Other fallacies that I see in the ongoing discussions:
* “RIM needs to be #1 in the world in order to be a great investment or a great company.” First of all, most people don’t define what criteria they are measuring. Is it units sold, profitability, percentage of the smartphone market, percentage of electronic devices, percentage based on OS, etc. etc.? You can be number five in the world (according to some random definition) and still be a heckuva investment.
* “iPhone/Android/BB is the best and so everybody else is a loser.” Kind of like saying “The VW group makes the best interiors, so all other car companies are terrible.” Last time I checked you can count quite a few successful car companies (Toyota, BMW, Hyundai, etc.)
The thing I see about RIM is that every time there is significant criticism of the company, they have addressed it and moved forward. No, they are not perfect, but that’s irrelevant when you are discussing where to invest.
* For the very first BlackBerry, customers complained the screen was too small, so they made it bigger.
* Then customers complained that it was just for email, so they made it a phone.
* Then customers complained that it was just black and white, so they added color.
* Then customers complained that the graphics weren’t very good and the device wasn’t that robust, so they made the 8700 (which you still see people using today).
* Then customers complained that it was too bulky, so they came out with a candy-bar form factor.
* Then customers complained that it just did phone and email, so they added a media engine and microSD card slot and a camera and threw in a new navigation method and we got the Pearl.
* Then customers complained that the Pearl was too small, so we got the Bold.
…
Other improvements that were added along the way:
* voice-activated dialing
* going from trackball to trackpad
* customizable themes (good luck getting your mother to do that with her iPhone)
* BBM
* App World! (which of course sucked at first and can certainly improve, but works pretty well today)
* touchscreen! (yes Storm 1 sucked, but they got it pretty well by Torch, and now the 9900 looks amazing)
* the initial BB-dedicated IDEs were terrible, then moving to Eclipse it got better, and now there’s Flash and WebWorks and even Android is on the horizon
* processing speed was too slow so we got Playbook and now the 9900
All along the way they have supported their established user base and never had to abandon them (ahem: Danger, Palm, Nokia) to save their own skin. The value proposition that RIM has always offered has always been significantly different than any other company. That is not saying it is better in all circumstances, but for the most long-term reliable and secure communications/organization/productivity tool it is by far and away the best platform out there. So I don’t really care if you have 3 iOS devices for every BB device you own, I’ll take this P/E of less than 10 to the bank any day of the week.
How could you have been a shareholder in RIM for the past decade if you covered the stock as a sell side analyst? Doesn’t TD have a policy on not letting you own the stocks you write research on.
Matty – no. There is no such TD policy. The policy is very simple. You cannot TRADE in stocks you cover. I owned it before I ever joined TD. I owned it before I ever became an analyst.
Thanks Chris for clearing that up.
Cheers.
BTW – I am really enjoying your blog.
Chris. You’ve probably seen this already but just in case you haven’t:
http://crackberry.com/blackberry-playbook-native-email-and-pim-running-blackberry-os-emulation-makes-hybrid-phone-os-plaus
A lot of speculation by Kevin at CrackBerry but I think he’s pretty darn close to hitting the bull’s-eye, BB OS 7.0 -> hybrid -> QNX and speculation for the delay in bringing native email to the PlayBook.
The current market view of RIM has become the flip side of Alan Greenspan’s irrational exuberance.
I read his post. It makes SO much sense. The first playbook demos ran single core also. Not too many people know that. So QNX can sure run on hardware that will initially power BB7.
If you could clarify something for me Chris. I was reading your replies to the Globe and Mail article and you mentioned that you didn’t ‘double down’. What did you mean when the first line on your post is ‘I just doubled my position …’ ? Really curious.
Doubling down means buying more after losing money on your initial bet. I didn’t lose on my first bet. I made a great return after being a shareholder for so long. That’s what I meant.
It’s obvious that Lazaridis failed to see how popular touch screens phones would be.He admitted it during one of his interviews.I think their approach has been the right one to see how market reacts to touch screen phones and once they were convinced that touch screen phones are here to stay they had to come up with an answer.
RIMM’s OS is it’s problem and once they fix that NOC should give them edge over competition.Right now bandwidth and security isn’t a concern for consumers.But as the world goes mobile real fast and a research report says that around 2013 when bandwidth demand would surpass bandwidth supply , data efficiency will be a margin saver.Also important would be security, as NFC enabled smartphones start storing and sharing critical information.That would be the endgame, when all OS match each other in capability, what protects profit margin for each player.RIM’s annual report says their NOC is their competitive advantage.I am buying it 100% and staying long and strong as mobile computing gathers momentum.
RIM.TO : Sur cassure de la zone support des 44.21$, le prochain support significatif est situé à 30$ dollars.
Claude Bordeleau
L’observateur technique, analyse des marchés boursiers
Love technical analysis. Its like modern voodoo.
Chris, I completely agree with your argument. I wonder if you went to the Q&A Session For Developers.
Listen to the 40:57 mark.
“You are about to get a ton of new developers”
http://www.youtube.com/watch?v=MOmmRyxiTNE&feature=player_embedded#at=2451
Great addition! Yeah, Mike Kirkup I find to be a good speaker and I believe they are seeing a big new crop of developers coming to the system. That’s core to my thesis.
It’s nice to see an analyst who actually tries to look behind the curtains. RIM is a very technical and humbled company. Unlike Apple, it does not consider features like copy’n'paste on mobile phones as the 21st century break through and hence celebrates its release like one. It just considers it as common sense. And that’s the real problem with RIM: they are too humbled and just want to deliver practical solutions to users. Apple is great in marketing but the quality of their products at release date has become quite bad over the last three years. It wasn’t until I had to start using a BlackBerry for work till I realised: well doesn’t look as sexy as an iPhone but it works. You can rely on it and it’s solid. The iPhone can only be considered a sexy game console and app player with signal strength indicator (and even that Apple got initially wrong!!).
As for announcing new products and then selling it: Steve Jobs once said: Announce products today and sell them tomorrow. So tell me: how often was this the case with the iPhone and iPad? It sort of still holds for their traditional business of selling MacBook Pros and iMacs, though.
If you guys want to compare the PlayBook with the iPad then please compare it to the first revision of the iPad and not to the version that has seen already numerous software updates and a hardware refresh after Apple just chuck it out to the general public for, you might say, beta testing.
And please guys, do your research and understand what you are talking about: Just because BB uses Java as the core for their BB OS and programming language, it doesn’t make it a worse OS. Just because it has some history doesn’t make it legacy. What would you call Android then? Android runs a slimmed down Linux under the hood and all 3rd party apps are also written in Java. And Linux is much older than Java. Same for iOS: It’s based on BSD Unix and the apps are written in an Apple slang of C/C++. And both have been around for over over 20 years. So please tell me now which system is really legacy by your own set definition??
Daniel – I agree with you on announce today sell tomorrow. RIM needs to get closer to that goal. I think with the Bold 9900 they had to announce something at BBWorld, but they held off on the other 3 devices coming because they want to do exactly what you suggested.
Java and “legacy” old OS systems … I understand your point. Being old is not a problem. Being architected without the ability to handle new stuff IS legacy, and RIM’s Java OS is definitely legacy. They can’t handle dual core processors. They require reboots to delete apps. The radio takes precedence over everything so any heavy UI tasks get interrupted by the radio when it does anything. Hence the spinning clock icon that you see so often on BB OS.
Great comment! I really appreciate it.
I have direct experience with QNX. It is a great OS. QNX is basically BSD Unix with real time extensions (Micro Kernel). This doesn’t make it any superior to OSX as that is also BSD Unix on a Mach Kernel. Mach has real time extensions as well.
So, Let’s assume both Apple and RIM have equally powerful OS.
Now, the game is all about the SDK. Apple has a great one.
RIM, highly likely will be using what they got from QNX, which is going to be an eclipsed based.
Now the question is: Apple has 200+ K games. You figure out the number of iOS developers out there. Guessed right! Apple has made it so easy for Joe-nobody to develop and sell their apps on the app store. Companies have hard time hiring iOS developers as everyone is developing their own apps and selling’m directly.
Now what does RIM have? well nothing so far!
Sure they can pay people to go and tell everyone how great Playbook is.
But I don’t think that will do the job.
Don’t get me wrong, I like to have a Playbook. If RIM sends me one for free I take a look at it. But I won’t buy it, due to lack of apps / games.
So, RIM has some catching up to do. Now can they do it?
Also, Apple is going to make FaceTime available on all platforms.
What is RIM’s story on that?
Nokia will be responding to that using Microsoft+Skype on their phone / Tablets?
What is RIM going to do?
It’s a wild west out there. Apple has 60+% of the pie and the others are just running to catchup. You can’t stop a now ball by chasing it? It will get bigger and bigger. You have to pass it and then stop it. Can RIM pass Apple?
What is amazing about this story, is that Apple was nowhere to be found 4 years ago.
They came along and are eating Everyone’s lunch. What make anyone think that they will give up that position that easily?
RIM’s CEO is more about buying hockey teams than running the show.
They are so disengaged.
Don’t get me wrong, I hope RIM doesn’t go down as I live in Waterloo and that will impact me directly.
But what Google did to Yahoo is what Apple is doing to RIM/NOKIA/MOTO/PLAM, and everyone else.
Time will tell.
Good post Chris.
Thank you for the comment back RIM. I am really happy to read your comments with a more technical background than all those sound and smoke comments of all the other wanna-be technical analysts. I am really angry sometimes to read what they say without even understanding the slightest bit of it.
I was lucky to get my PlayBook for free from RIM and I have to say it’s great. The form factor is much better than the one of the iPad even if Steve Jobs says that 7″ tablets are dead on arrival. I am in the UK and hte PlayBook hasn’t been released over here yet but everybody who sees it is impressed even people that have an iPad and they do like the fact that you can easily link it with your BlackBerry and access it directly from the PlayBook and share the 3G connection with it. When do all these important analysts start telling the real feedback and not what they think. The best thing about the BlackBerry Bridge is that I can leave my PlayBook at work on my desk and go for lunch just taking my BB and knowing that nobody will be able to take a look at my Emails or PIM data because when the Bluetooth connection is lost, all this data is being locked immediately.
The browser is so great that you don’t need a separate app for Gmail or Hotmail. It’s a nice to have but nothing that justifies to declare the PlayBook as being released half finished. Take Chris’ site here: I opened it on my PlayBook this morning and where able to watch the PlayBook / Telus ad clip straight away via my BB’s 3G connection. I didn’t need to open an extra app to do that. Why would I? The PlayBook’s browser offers near desktop browser experience unlike iPhone and iPad where you can’t see many things because Apple decided it isn’t something they want to deal with. I want to make this decision as a user and not Apple for me!!
I do look forward to see QNX on the BB and on top of that a solid Java implementation that is more in line with the desktop Java. It will open up a whole new world of opportunities without having to re-implement everything that’s already perfect, solid and secure.
RIM has always been a very humbled company, from the beginning. That is where Mike Lazaridis’ influence shines through.
Apple has become extremely arrogant and über-confident. They rose fast they will also fall fast. Give it another three to four years and also Apple’s ‘Windows Vista’ moment will come.
There is one big good thing about Apple and the iPhone: It did with it what it always did well: it broke with the mould and showed that it can be done better. That woke RIM and many others from their beauty sleep as they thought there isn’t anything else to make better. I do agree that BlackBerry’s wouldn’t be as good and also quite sexy today if it hadn’t been for the iPhone. But that’s where the good thing ends. The iPhone has given Apple the power to turn into a bad version of Microsoft. For many years people were complaining about proprietary solutions from Microsoft etc. But if you take a closer look, Apple is worse. They don’t allow you to install apps from other app stores or websites than their own. They don’t allow you to sync it with anything else than iTunes and the list goes on. Apple just wraps everything nicer than MS did but there is certainly one thing MS never did: forcing you to use one particular thing. You always had and have the option to use an alternative application. And RIM is equally open.
Remember this Daniel,
Power bring arrogance, and arrogance is the demise of an empire.
For some “magical” reason, history will always repeat itself and Apple will be no exception.
I am a buy side analyst, and I do not cover RIM. However I was recently at a luncheon and once the presentation finished the conversation quickly turned to smart phones and tablets and I was surprised to see how negative everyone in the room was towards RIM ( I must add everybody in the room had a Blackberry product except for one about fifteen people in the room). One comment I heard that I have heard plenty of times is that the IT department was getting ready to approve Apple products to receive and send company emails. Everybody in the room said they would get an Ipad and or Iphone if the company allowed them (that is something I have never seen). I believe this feeling towards RIM is becoming the norm, thus I do believe that RIM would have to come out with something that would blow the consumers mind, I am not sure that apps is enough given that Apple has such a lead in the cool factor for their products.
Hey Chris,
I’m glad to see someone is enthusiastic about RIM’s future, but as a person who’s been in the IT world for over 15 years I can honestly say from my side RIM has just driven off a cliff.
I recently switched 35+ users from one mobile provider to another and in the process was able to offer everyone a free upgrade from a BlackBerry Pearl, Bold 9000 or Bold 9700 to RIM’s latest Bold 9780 or Bold 9800 (Torch). The result: Torch users moved to iPhones after complaining their cheek either silenced a conversation or changed their language to Chinese, Bold 9780 users moved back to 9700 or iPhones after being tired of dealing with the 8 different scroll menus to choose from and those upgrading from Pearls are happy finally having a QWERTY keyboard and a track pad instead of a scroll wheel that does that locks up due to residue buildup.
From my view, the Bold 9700 was a solid product and an excellent platform upon which to move forward, but instead of doing so, they regressed in the most painful of ways. The mere fact that within two click you can disable your entire mobile network by accident on their “improved” OS 6.0, which is dead in the water given there’s no upgrade path to 7.0, implies that they’ve hit the Windows ME of mobile operating systems. The additional pain of “Always Allow” or “Reboot Now” after removing or installing a new application shows how broken their user implementation of apps actually is. Nevermind the 6-10 minute startup when doing the classic battery pull to resolve any cellular network issue. Lastly, keeping the enter and delete button on a touch screen one on top of each other is a complete fail. Might as well put the power button next to the space bar.
I used to hate how closed the Apple architecture was and did everything to avoid them (i.e. original Diamond Rio MP3 player, Wintel platforms, PS3 instead of Apple TV), until I realized that what Apple does right are two fold: they make the best physical devices and completely understand and craft the end user experience.
In RIM’s corner, the hardware is sub-standard (processor, camera, screen size, memory), the user experience is extremely painful and the only strong selling points they still stand upon is their data encryption, BBM messaging and e-mail on a BES server. But once people realize that there are free “exchange” (ActiveSync) configurations for for Hotmail and Gmail accounts and alternatives to SMS (see Kik, Viber, LiveProfile), then no one will restrict themselves to the BB platform.
The final nail in the coffin for me was the fact that their next great upgrade was to release a new version of the Bold 9780 with a tactile screen. Great. So now trying to zoom in on a PDF with the screen the size of a thumbnail can be done through pinching and stretching and trying to click on a web-link will be that much easier (/sarcasm). I just hope the realize they need to disable the screen when you bring the phone to your face so I don’t suddenly start a 3-way call with China.
In my mind it’s a clear choice when dealing with a company that quarter after quarter exceeds analysts’ expectations, can’t build devices fast enough to sell (i.e. iPhone 4 and iPad 2), has stores that are always swarming with people and creates new markets every few years vs. one who’s future is so uncertain and still doesn’t know how to convince people why their products are “the best”.
Mike! It is great to hear from you!
I loved your comment. You explained yourself clearly, made some great points, and used plenty of facts to backup your opinion. Honestly these are the kind of comments I value most. Your ending remarks on Apple having great products, busy stores and happy customers … that’s exactly why I’m a big shareholder of Apple also. I’ve made bets on RIMM, AAPL and GOOG in this space, while I’m short NOK.
Some of your comments were first timers for me. Great point about the delete and OK button being so close together. I have accidentally hit the wrong one many times and this should be an easy fix. In the world of thumbwheels, when RIM had done a great job inventing a nice navigation method, this worked fine. But for pearl wheels and touch screens (especially touch screens) it’s too easy to make a mistake. I hope the TAT guys from RIM are reading this because I bet they’d agree, and change things.
There are a bunch of things you missed about RIM’s strengths, but being in IT in North America they are not things you’d normally see. Carrier capability to turn on just the services a customer wants to pay for (BBM, for example) is a huge strength in the prepaid markets around the world (the vast majority of cellular subs are prepaid). The true push-data experience of the NOC (forget email, think about true multi-tasking in-app push data experience).
My take on it is like this: RIM build some awesome devices during the 950 / 957 days and carried them forward to the GSM and CDMA world where the BlackBerry capabilities made them shine. They only got “good” at building phones by the time the Pearl was launched (impossible to argue with its success, definitely easy to argue with the trackball annoyances). Then they got stuck competing with Apple who beat their pants off in UI. They were stuck with a legacy Java OS and were unable to innovate for many years. They were unable to get out a decent browser, unable to fix the reboot requirements of the device, unable to put together a decent touch experience (until the Torch, which finally comes close in responsiveness).
And now RIM is in major turnaround mode. The ENTIRE future is based on QNX, TAT and Torch Mobile. All of the problems you described with respect to OS and UI should disappear. That is, if RIM doesn’t collapse under poor execution.
Globally, carriers do not want to be faced with Apple only, nor do they want a choice only between Apple and Android. I think RIM’s market share was a complete overshoot when they had 50% of the market in NA a couple years ago (off the “success” of selling Storm at Verizon and legacy Pearl users who were about to have contracts expire). But I do think the race is a 3-horse race and RIM is in that race. They’ll survive (with scars) just fine.
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