Research In Motion Ltd.’s decline has diehard BlackBerry fans harking back 15 years to the days when another fruit-themed company was losing market share, posting losses and spurring talk of its imminent demise.
In 1997, Apple Computer Inc. lost more than $1 billion, saw sales tumble 28 per cent and was as little as 90 days away from bankruptcy. Co-founder Steve Jobs returned to Apple that year and did many of the things RIM is attempting now: He simplified the company, embraced a new operating system and revamped the culture to focus on products that were true breakthroughs.
RIM faces long odds in trying to replicate Apple’s success story — for one, it lacks Steve Jobs. A RIM comeback also hinges on challenging a hit product that Jobs himself introduced: the iPhone. Still, RIM has rabid fans and can rely on Apple’s approach of controlling both hardware and software, letting it make products that tightly integrate the two pieces.
"Apple and RIM are both innovative companies with very loyal customers,” said Ron Adner, an associate professor of strategy and entrepreneurship at the Tuck School of Business at Dartmouth College in New Hampshire. “For RIM to follow that story line, they need a lot of innovation in not a lot of time — not impossible, but not likely.”
RIM Chief Executive Officer Thorsten Heins took the helm in January and made some big changes, including a plan to fire almost a third of the workforce and shut down manufacturing sites. The Waterloo, Ontario-based company also hired JPMorgan Chase & Co. and RBC Capital Markets to study strategic options. Heins says selling the company isn’t the goal of the review. RIM would prefer to find a partner or license its operating system.
Apple and RIM are both innovative companies with very loyal customers,” said Ron Adner, an associate professor of strategy and entrepreneurship at the Tuck School of Business at Dartmouth College in New Hampshire. “For RIM to follow that story line, they need a lot of innovation in not a lot of time — not impossible, but not likely.”
RIM Chief Executive Officer Thorsten Heins took the helm in January and made some big changes, including a plan to fire almost a third of the workforce and shut down manufacturing sites. The Waterloo, Ontario-based company also hired JPMorgan Chase & Co. and RBC Capital Markets to study strategic options. Heins says selling the company isn’t the goal of the review. RIM would prefer to find a partner or license its operating system.
Apple and RIM are both innovative companies with very loyal customers,” said Ron Adner, an associate professor of strategy and entrepreneurship at the Tuck School of Business at Dartmouth College in New Hampshire. “For RIM to follow that story line, they need a lot of innovation in not a lot of time — not impossible, but not likely.”
RIM Chief Executive Officer Thorsten Heins took the helm in January and made some big changes, including a plan to fire almost a third of the workforce and shut down manufacturing sites. The Waterloo, Ontario-based company also hired JPMorgan Chase & Co. and RBC Capital Markets to study strategic options. Heins says selling the company isn’t the goal of the review. RIM would prefer to find a partner or license its operating system.
Apple and RIM are both innovative companies with very loyal customers,” said Ron Adner, an associate professor of strategy and entrepreneurship at the Tuck School of Business at Dartmouth College in New Hampshire. “For RIM to follow that story line, they need a lot of innovation in not a lot of time — not impossible, but not likely.”
RIM Chief Executive Officer Thorsten Heins took the helm in January and made some big changes, including a plan to fire almost a third of the workforce and shut down manufacturing sites. The Waterloo, Ontario-based company also hired JPMorgan Chase & Co. and RBC Capital Markets to study strategic options. Heins says selling the company isn’t the goal of the review. RIM would prefer to find a partner or license its operating system.
Apple and RIM are both innovative companies with very loyal customers,” said Ron Adner, an associate professor of strategy and entrepreneurship at the Tuck School of Business at Dartmouth College in New Hampshire. “For RIM to follow that story line, they need a lot of innovation in not a lot of time — not impossible, but not likely.”
RIM Chief Executive Officer Thorsten Heins took the helm in January and made some big changes, including a plan to fire almost a third of the workforce and shut down manufacturing sites. The Waterloo, Ontario-based company also hired JPMorgan Chase & Co. and RBC Capital Markets to study strategic options. Heins says selling the company isn’t the goal of the review. RIM would prefer to find a partner or license its operating system.
“Before Jobs returned, Apple had been fumbling very badly for a number of years on the product side,” Kunstler said. The product discipline he instilled in the company is hard to replicate, he said.
In a bid to tighten its product focus, RIM plans to sell fewer BlackBerry models when the new generation arrives — probably no more than four, Heins says. Even so, the products will be late. Last month, Heins delayed the arrival of RIM’s first BB10 phone until early 2013, meaning it will now debut more than a year after it was originally expected.
Heins took over as CEO from Mike Lazaridis and Jim Balsillie, who ran the company as a team. Lazaridis, RIM’s founder, remains a director, is vice chairman and heads up the board’s innovation committee — its own attempt to think different. The company’s next breakthrough may be just as hard for outsiders to predict as its initial success, Lazaridis said in an email.
“One thing we’ve seen over the years is that game-changing innovation can come from anywhere, including a company that got its start over a bagel shop in Waterloo, Ontario,” he said.
Jobs had instant credibility with Apple employees because he helped start the business and wasn’t around during most of the lean years. Lazaridis doesn’t have that distinction: RIM gained and then lost most of its value under his stewardship. He’s also been criticized for not anticipating the popularity of camera phones and mobile browsers. By stepping aside this year, Lazaridis put Heins, a former Siemens AG executive who joined RIM almost five years ago, in the role of would-be saviour.
RIM declined to say if Heins is taking cues from Jobs’s career. His inspiration comes from 78 million BlackBerry fans, who want to see the company succeed, Heins said.
“The excitement and commitment that all of these people, our customers, fans and employees, show on a daily basis gives me all the inspiration I need to navigate through this period and guide RIM to once again transform the way people communicate and to generate long-term value for our shareholders,” Heins said in an email.
The linchpin of Apple’s operating-system comeback was NeXT, an OS Jobs had built while in exile from Apple. The company acquired the business and then retooled it to create the basis of the Mac OS X. Similarly, RIM bought QNX Software Systems for $200 million in 2010 and began reconfiguring it as the basis for BB10. RIM’s future depends whether the new operating system can similarly disrupt the market, said Mike Abramsky, principal at Toronto-based consulting firm Red Team Global.
“That’s the $64,000 question,” said Abramsky, a former analyst who tracked both Apple and RIM. “It’s almost like they have to revolutionize the market the way Apple did to change their fortunes around — and that I think is beyond them.”
RIM also needs to appeal to developers, who would have to make the apps required for BB10 to compete with Apple and Android devices, said Jean-Louis Gassee, a venture capitalist who worked at Apple for almost a decade. No matter how good BB10 is, it will lag too far behind Android and Apple, he said.
“Assuming Thorsten Heins manages to lead his engineers into creating an OS on par with Android and Apple, RIM does not have the ecosystem,” Gassee said. “The killer problem is the ecosystem.”
One outcome for RIM would be to sell off the company — something Apple had discussed doing before Jobs returned. Mike Kwatinetz, a partner at venture firm Azure Capital Partners in San Francisco, would like Microsoft to buy RIM.
Tony Imperati, a spokesman for Redmond, Washington-based Microsoft, declined to comment on that possibility.
“RIM needs to somehow change the war,” said Kwatinetz, a loyal BlackBerry user who covered Apple as an analyst during its turnaround. “They just do email better than anybody.”
Barring a Microsoft deal, RIM should focus solely on corporate customers, who have no interest in “Angry Birds” games or YouTube videos, Kwatinetz said. RIM doesn’t have much of an alternative, he said. “Are they really going to outflank Apple as a consumer company?”
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