October 1, 2012 1:00 PM
RIM shared some good news with the world recently. (The less charitable among us will characterize the news as “less bad than expected” but we’ll ignore those people for now.)
The company showed off its upcoming BB10 handsets and got positive reviews; its global user base increased to 80 million, from 78 million last quarter; in the same quarter its revenue is up two per cent (although that is still down 31 per cent from last year); and its net loss was 45 cents per share when analysts had expected 47 cents or worse. Perhaps most importantly, the stock is up: at noon on Oct. 1 it was $7.58. Yes, it was hovering around $15 at the beginning of the year but as recently as Sept 24 it was $6.13. So it’s up.
But that’s really where the good news ends. Why? Because the stock bump was caused largely by two factors — reduced costs following massive layoffs and the positive response of a few analysts to the previewed BB10 devices — that RIM can’t repeat.
The company could shed some more workers, but at some point the losses will make innovation impossible, so that well is one RIM certainly can’t draw from too deeply. As for BB10, those devices will hit the market in the new year, so arguably the good news they will deliver is yet to come, but I don’t think so. Here’s the problem: reviewers may genuinely like some specifics of a device or platform, but analysts and press reviewers aren’t the mainstream buying public. The cash-in-hand public doesn’t look at any one device, they look at multiple devices, and they make buying decisions in relation to all the other options.
In other words, RIM’s new BB10 handsets could be really solid, great even, and still fail. To succeed they have to not only be better than Apple and Android devices, they also have to be better than the marketing, app selection, momentum and coolness factor of those devices.
This is the exact same problem Microsoft faces in the mobile space. Reviewers like Windows Phone hardware and software, and yet no one buys them. IDC reported recently that Windows Phone was on a paltry 3.5 per cent of all mobiles shipped worldwide in Q2 2012. That’s with good reviews, solid hardware and all of Microsoft’s marketing muscle.
The bad news amid RIM’s good news is that the company could deliver killer BB10 handsets and still fail miserably in a market that has simply moved on.
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Peter Wolchak has been a professional print journalist for more than a decade. Starting as a news photographer at a community newspaper, Peter then worked as a staff writer at ComputerWorld Canada, a national trade magazine, and later served as the editor of that publication for four years. Peter then moved up to the national business magazine arena as the editor of Backbone. In addition to these journalism activities, Peter has also worked as a public speaker and discussion moderator, served as a judge for the McLuhan Festival’s Vortex awards, and sits on the E-Business Program Advisory Committee at Sheridan College.
Posted by Sue Ansell at October 1, 2012 1:00 PM
Categories: New technologies Trends