Research in Motion: Blackberry is now a follower product line.

What really ails Research in Motion and the Blackberry brand?

by Tom Thorne

Research in Motion’s (RIM) Blackberry brand has managed to get inside the heads of business and government leaders with an innovative product  designed to serve the communications needs and mores of  a more conservative smart phone customer. These customers are a big segment of the smart phone market.

Blackberry is the smart phone of choice for politicians, government bureaucrats and business people. Although they are innovative Blackberry smart phones are stolid and largely function without the outward pizazz of an Apple IPhone.  The individuals who use Blackberry products are for the most part people looking for a network entry system that looks like they are for business users. Blackberry meet the needs of corporate information technology departments who consider Apple iPhones as some kind of toy. 

Of course the smart phone competitive field is filling up. RIM cannot expect that Google, Microsoft and Apple are going to let them dominate this lucrative sector of the high tech industry. And so RIM is under stress by bigger, well funded companies who want their piece of the smart phone pie and are determined to get it and  expand at RIM's expense.

It is also interesting that tech stock financial analysts have now downgraded RIM equities and decided that the bubble has burst for Blackberry and Research in Motion. This situation was amplified when the much heralded and equally disappointing introduction of the  Blackberry PlayBook tablet which went over like a lead balloon. Think of it.  PlayBook, the very word signals to conservative Blackberry users that RIM management  doesn't take tablet technology seriously. Who plays or admits to playing in business and politics?

Roll up the RIM to lose...
RIM’s customer base doesn’t play unless its competitively on a squash court. There is nothing laid back about RIM users. They are "A" personalities who enjoy and revel in a 24/7 relationship with their employers where they are always on call and in touch using RIMs superior security systems and software. They want to live in the world of constant communication even if it interrupts a child’s birthday party. So calling a tablet product a PlayBook was a big mistake for their established market.

RIM has done a lot to stimulate the smart phone market and they have done it with a focused attempt to wrap up business and government. They really don’t know how to get the younger cooler market except on price point and offers with smart phone network suppliers who are willing to provide cheap plans for older Blackberry models. They have managed to expand away from the business and government markets by attracting young people who cannot afford the entry capital costs for the Apple iPhone. But it’s not enough.

RIM’s Blackberry PlayBook  tells you something about where the current RIM thinking is focused. Apple obviously had a run away success with the first iPad and seems to be having further success with the iPad2.  Apple has captured the pad market and anyone else who enters it has to play second fiddle. All sorts of knockoff products have now flooded this market as RIM brought out the PlayBook. They appear as an also ran choice compounded by a large expanding field of follower products.

Apple strategy is get competitors to follow them into uncharted waters...
Apple has strategically drawn its biggest smart phone competitor into a new uncharted market place. RIM’s thinking was to follow and to understand the market in terms of playing not working.  Apple sees the iPad as a serious computer and has the apps to prove it. RIM looks to technical performance but countering Apple with small software differences like  iPad doesn’t run certain web animation software like Flash seems petty and self defeating. No one cares about this type of flimsy comparison. 

The main problem for Research in Motion is that their marketing is stalled. They have the software and hardware smarts to build good 3G phones and tablets but they are off the mark about their customer base. In addition, they decided to follow others into the market instead of leading the industry. They have lost their marketing edge in  sea of change and it may continue to cost them as they now have to compete in the tablet market with many competitors and with the leader who is already into their second generation product. RIM is playing competitor catchup, which is always a dangerous game.

If their key smart phone business begins to falter further and if there is a downturn in government spending on communications equipment they will suffer a deeper gash in their revenues. If the economy also goes sour in the private sector then they will continue to slide. And in a downturn someone in the US Congress is going to ask why Americans are buying Canadian made and designed products when budgets are being cut. 

© Copyright 2011, Tom Thorne, All Rights Reserved