Follow Us

We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message

RIM backs out of consumer markets to focus on enterprise

The troubled BlackBerry maker falls back in its historical strength, after revenues take a dive

Article comments

Research in Motion's new CEO Thorsten Heins has said that the company will abandon most consumer markets and refocus on its historic area of strength - the business market it has largely tried to escape from through a series of unsuccessful efforts to transform the BlackBerry into a gaming or social device for young adults.

Heins said he will reveal a major reorganisation of RIM this week.

The company has revealed that its revenue dropped 25 percent in the last fiscal quarter in comparison to a year earlier, a decrease of $5.6 billion (£3.5 billion), with the decline in revenues accelerating after it launched its BlackBerry 7 smartphones in autumn 2011 and had to deeply discount the poorly selling PlayBook tablet in the same period.

RIM has had to discount large numbers of BlackBerry smartphones and PlayBook tablets to clear inventory.

RIM should be licensing BlackBerry technologies

Ovum analyst Jan Dawson is not convinced that abandoning the consumer market is the best way forward for RIM.

"I'm not sure Heins yet understands, or at least isn't able to articulate, that consumer appeal is key to future 'enterprise' success," he said. That across-the-spectrum approach is what Apple used to make iOS the new platform for choice for business and what Android device makers like Samsung and Motorola Mobility are trying to do with Android.

In its presentation today to investors, RIM executives said they were willing to explore other business models, such as licensing all or some BlackBerry technologies to other companies. Some investors have suggested that RIM license or sell access to its secure messaging network or its BlackBerry Messenger instant messaging service.

Whatever it does differently in terms of getting revenues from its BlackBerry technology, the company intends to continue to make and sell BlackBerry devices. "It would be a big mistake for RIM to shut down the devices business, which drives the vast majority of revenues today," Dawson said, supporting RIM's decision to not abandon its device business as some investors have suggested it do.

RIM continues to express confidence that its forthcoming BlackBerry 10 OS - expected to hit the market in the fall - will reinvigorate the company's fortunes. But they warned investors to expect no turnaround before then, and in fact said they would no longer provide investors with guidance on financial performance, a sign of a troubled company.

Selling off unwanted BlackBerrys to developing countries

In the meantime, RIM is trying to sell its unwanted BlackBerry devices in developing countries, in hopes they'll have more appeal and help create a new market for the future. However, Nokia is aggressively targeting those same countries with its Series 40 OS-based Asha devices and already commands the majority of the non-smartphone market in most of them.

Samsung is also increasingly targeting such countries with a mix of Android and Bada smartphones, and Apple is aggressively targeted the growing middle and upper classes in those countries with its iPhone and iPad.

RIM co-founder and former co-CEO Jim Balsillie has also left the board of directors, RIM acknowledged in its earnings statement today. Balsillie and Mike Lazaridis had been co-CEOs until 10 weeks ago, when they were replaced by Heins, the former CFO, but both remained on the board.

Both had been blamed by investors and the press for RIM's clinging to its original messaging-oriented business model. Balsillie's statements in autumn 2010 that mobile apps were a fad were lambasted at the time as a sign RIM's leadership was unable to see the change in the mobile market.


More from Techworld

More relevant IT news


Send to a friend

Email this article to a friend or colleague:

PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.

Techworld White Papers

Choose – and Choose Wisely – the Right MSP for Your SMB

End users need a technology partner that provides transparency, enables productivity, delivers...

Download Whitepaper

10 Effective Habits of Indispensable IT Departments

It’s no secret that responsibilities are growing while budgets continue to shrink. Download this...

Download Whitepaper

Gartner Magic Quadrant for Enterprise Information Archiving

Enterprise information archiving is contributing to organisational needs for e-discovery and...

Download Whitepaper

Advancing the state of virtualised backups

Dell Software’s vRanger is a veteran of the virtualisation specific backup market. It was the...

Download Whitepaper

Techworld UK - Technology - Business

Innovation, productivity, agility and profit

Watch this on demand webinar which explores IT innovation, managed print services and business agility.

Techworld Mobile Site

Access Techworld's content on the move

Get the latest news, product reviews and downloads on your mobile device with Techworld's mobile site.

Find out more...

From Wow to How : Making mobile and cloud work for you

On demand Biztech Briefing - Learn how to effectively deliver mobile work styles and cloud services together.

Watch now...

Site Map

* *