Mike Mace has done an excellent job of breaking down the financials on RIM and has gotten a lot of press for it recently. His two core articles are here and here, well worth the time to read them. His facts back up my beliefs about RIM: that there is something seriously wrong with the company and the BlackBerry platform even though their numbers look good on the surface. What I have been trying to figure out is why.
A product is only as good as those willing to advocate for it. Flipboard and Instagram are two recent examples of this and both have found a very strong user segment to advocate for them. The advocates for Flipboard, a media app in essence, was media folks who consume tons of data and spend tons of time on Facebook and Twitter. Instagram was picked up by photography/social stalwarts in the tech community. Consumer apps/technology that doen’t appeal to that tech advocate crowd don’t seem to do as well, at least not here in the States.
So, RIM… RIM has failed to enlighten the imagination of the tech crowd and now the company is paying for it, at least in North America. As Mike shows, North America sales are near 0% growth and new customer subscriptions are trending downward.
Why? RIM’s products feel stale compared to iOS, Android and Win Phone 7 devices. The perception is that enterprise users would use something else if only the IT departments would let them. So the influencers, the tech paparazzi, doesn’t talk about them in glowing terms. A second group of influencers, developers, have continually been treated like second class citizens by RIM: horrible (there isn’t a word for how bad) developer tools, constant switches in OS strategy (non-touchscreen, touchscreen, QNX), and zero marketing support from the company itself, even for its paying partner companies. Thus, the crowds that usually kicks off technology products is paying zero attention to the company.
Internationally, however, there is a different story going on. A group unswayed by media punditry, teens who text, are dying for the BlackBerry due to its well-done BlackBerry Messenger app and excellent keyboards. This group doesn’t care what the tech crowd thinks, doesn’t care that the developer infrastructure stinks, only cares what their friends do, and that is text with BBM.
So I can see how RIM’s sales have split, how they have flattened in the US and how they have exploded overseas.
The problem is I don’t see it as sustainable. RIMs key customer bases are de-stabilizing. Teens grow older and move onto different technology or something else becomes the hot texting tool. And with that the International gains disappear. And here in the States? The tech crowd is waiting for something amazing, something new and modern. A transition to QNX feels imperative but that has been downplayed by the company’s co-CEOs. And the developers don’t pay much attention because the customers either don’t buy software or are behind IT-constructed walls.
So things can get worse, much worse, if RIM is not careful. 2011 will be a critical year.