Posted in Marketing
15/12 2011

What Can RIM do to Survive?

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AllthingsD asked the question this morning “what can RIM do to survive?” and it’s a very interesting question. It seems that almost everyone, except RIM, realizes that they have been disrupted in the smartphone market and are doomed to see their market share erode to irrelevance.

They need to consider what their core competence is. My take is that it’s not smartphones, but secure communication for highly sensitive industries such as banking and government. That’s the future of their business, so here’s what they should do:-

  • Continue making smartphones for one more generation and then sell them in a cash cow model until that business is no longer profitable. There is still a lot of money to be made in some non-US markets with relatively expensive bandwidth, and as a way to provide low income families with a smartphone at a lower subscription cost.
  • Create secure messaging software for iOS, MacOS, Android and Windows Phone. RIM can then sell this on to companies and government.
  • Leverage their expertise in consulting and grow that business. RIM will essentially become a services company.
  • Offer a dividend. The value of the company will be from the services side and not the hardware, so offering a dividend will be more appropriate.
  • Licence WindowsPhone from Microsoft and resell with their messaging app integrated to their corporate and government customers.

This changes how we perceive RIM to be, but it seems almost impossible to see them pulling back their lead in smartphones. They are just not good enough at building the software, even Google is not good enough at building smartphone software to beat Apple, so what chance has a hardware company like RIM? It’s time for a radical change in direction.

Image: http://stevekovach.tumblr.com/post/1295169596

  • but what you are advising is a slow death? would that give them the lead?

    I think Apple nailed what a phone should be (and google smartly copied Apple with Android), and RIM needs revolution not just evolution

    • Anonymous

      Heri,

      They are dying a slow death today. They can’t make competitive hardware, they’ve failed to make competitive software, they’ve failed to build a competitive app store when they had a huge installed base.
      They do need revolution, and they should do so around what they are good at, which is convincing business and government that they can provide secure communications. Basically they should enable BYOD.
      Is it a different business? Yes. Will it generate the same revenues? no. But the way RIM is heading now is to insignificance and a distress sale. It won’t be pretty.