RIM leaning toward new chairman: sources

The Financial Times reported yesterday that RIM was likely removing co-Chairmen Mike Laziridis’ and Jim Balsillie’s titles, installing an independent chairperson. The two would remain co-CEOs.

There is a great story in the Steve Jobs biography involving Larry Ellison of Oracle, Gil Amelio who was at the time CEO of Apple, and tech journalist Gina Smith:

That spring Larry Ellison saw Amelio at a party and introduced him to the technology journalist Gina Smith, who asked how Apple was doing. “You know, Gina, Apple is like a ship,” Amelio answered. “That ship is loaded with treasure, but there’s a hole in the ship. And my job is to get everyone to row in the same direction.” Smith looked perplexed and asked, “Yeah, but what about the hole?”

Yeah, RIM. What about the hole? [1]

—

[1] The problem is execution and mixed messages from the CEOs. Who gives a damn who is running the Board right now?

In Flop of H.P. TouchPad, an Object Lesson for the Tech Sector

Two days ago, Brian X. Chen wrote an article for The New York Times regarding the flop of webOS. I’ll sum up the article for you here: it is the operating system’s fault that Palm and HP failed. The world of hardware and users weren’t ready for a web-based operating system.

Excuse my french but… bull shit.

The operating system was fine. I remember rushing over to a Sprint store to play with it and really enjoying the OS, actually. I thought it was smartly designed and although it had a couple of learning curve issues it was a solid system. While I have had my moments hating on Palm, I really was excited about developing for it because it used technologies I could use in other places, too. The hardware was good enough in my opinion (although I do remember there were some device manufacturing issues that took a few months to iron out).

Even the strategy of starting on Sprint, in my mind, was not a bad one. Focus on a smaller niche that you can dominate and then, with momentum, spread to other niches. Sprint is the smallest of the big four niches here in the US. Sprint helped with marketing and gave Palm time to work out any problems before also adding AT&T, Verizon and T-Mobile to their platforms.

Palm (and HP) failed because Apple sucked all the air out of the room. Then Google did a good enough job of copying Apple that any remaining air went to Android. webOS went cyanotic almost immediately [1]. And the one thing any good pyromaniac knows is that you can’t start a fire without any oxygen [2]. It’s that freaking simple.

Folks at HP and Palm can come with all the complicated reasons they want to make themselves feel good. But the reality is the software and hardware failed because there just wasn’t any oxygen left in the room. Sometimes you make history and sometimes you are made by it.

—

[1] My 5 and 3 year old love that word. I always wanted to use it in a blog post.

[2] I’m not one but my wife might be.

There has been a lot of hubbub this week around Eric Schmidt’s Android comments. Eric, the chairman of Google, said at LeWeb that “whether you like [Android] or not, and again I like it a great deal, you will want to develop for that platform, and perhaps even first.” He set a six-month time horizon for this Android-first change. Android has a lot going for it, that is for sure. Its smartphone “market share” is over 50% and clearly many customers prefer Android over other platforms.

Marco Arment, the creator of Instapaper (an iOS, web and Kindle app), asked why anything would change in the next six months? Developers aren’t making money on Android right now (link). Gene Muster from analyst Piper Jaffray backs up Marco’s assessment. He claims that Apple has sent $3.5 billion to developers while Google has paid out $240 million (link). That’s a huge difference. The folks at Shifty Jelly, an iOS and Android developer, have had the opposite effect, though. Their Android sales far outweigh their iOS sales (link).

“Market Share”?

I put “market share” in quotes before. Why? Because market share numbers to developers is completely different than how most consumers view the popularly reported figures.

As others have pointed out before me, we can’t really compare Android market share to iPhone market share. That is a platform versus a device. As a developer we generally write for a platform. To compare apples to androids, we would need to count iPhone, iPad and iPod touch market share, combined called iOS market share, to Android market share. And given Apple’s commanding lead on the iPad and the number of iPod touch devices sold, that number favors Apple. According to comScore, Apple’s US market share as of August 2011 is 43% to 34% (source). Worldwide as of October 2011, according to Net Applications, Apple is favored 61% to 19% (source).

A Touch of Accounting

This comparison comes into even sharper contrast, favoring Apple, when you realize that Android (and all other mobile device) sales are counted completely different than Apple sales. Apple’s sales are counted as the actual sales to a customer. I walk into a store, buy an iPad and Apple adds a 1 in the sales column. Android’s (and other mobile device’s) sales are counted as sales to channel.

The difference is huge. A sale to channel is a sale to Verizon or Best Buy, not a sale to a customer. Samsung, HTC, Motorola, RIM, and Nokia all get to count the sale into the channel as revenue and as a sale toward market share [1]. But it doesn’t mean that device was sold to the public. RIM just showed why the two — iOS market share and other operating system market share — aren’t equivalent as it is taking a write-down (meaning the channel sent back devices) of $485 million and possibly as many as 2.4 million devices (link). RIM, when figuring BlackBerry/QNX operating market share, got to count those 2.4 million devices toward their share.

I only care about devices sold to customers.

If Market Share Really Mattered…

Even if you think I am full of it and don’t believe the numbers from above, then why are many developers focusing on iOS over other platforms with much greater penetration? John Gruber points out, for instance, that Windows and the web have much larger installed bases than Android and iOS combined. If market share matters so much, why do developers ignore the web and Windows, choosing to develop exclusive for iOS, Android, RIM or a combination of these “low market share” devices (link)?

The real answer, which John misses, is they don’t and you can’t, at least when it comes to the web [correction: I mean Internet so I might not actually disagree with John]. The hottest applications of 2011 are all web-connected applications. Instagram was just named Apple’s app of 2011 (link). The year before, I believe, it was Flipboard. Neither app works without the web. Both require a web connection to share images and gather stories with your network. Just because the front-end isn’t in a browser doesn’t make them less of a web application. Neither of these apps could have existed before the web, even on a desktop computer.

If you want to create a highly successful mobile app today, I believe, you better figure out how the device and web work together.

I’m No Idealogue

Look, I’m not an Apple fanboy nor am I an Android one. My allegiance is to the platform(s) that pay the bills. For that matter I write apps that work with numbers and have made a living at it (sometimes just barely) on multiple platforms for 14 years now (link to powerOne). I do put a lot of stock in the numbers and so far they are telling me that for an app like powerOne, one that relies on customers paying me $4.99 per copy, and for a team like we have, which is too small to focus on many platforms, that iOS — iPhone, iPad and iPod touch — is still the primary game in town.

—

[1] Amazon Kindle Fire sales are most likely counted like Apple sales since they are sold directly to customers. I’m not certain how Barnes and Noble accounts for Nook sales.

Watching (and caring at all) about RIM is an exercise in frustration and futility. Here is a company who can’t learn from their own mistakes nor anyone else’s. For anyone who cares about the article that got me going, I’m going to link over to Ronen Halevy over at BerryReview.com.

If you haven’t heard, RIM announced a new operating system a week or so ago called BBX. BBX is the love child of QNX, which they are currently using in their PlayBook tablets, and the BlackBerry OS which runs on all their smartphones. BBX development can include either HTML5 development (called WebWorks) or Native C/C++. Both of these are now available for the PlayBook as well so anything written for the PlayBook will also run on the new smartphones.

Let’s start with problem number 1: What about apps previously written for BlackBerry OS? Even though BBX is partially the spawn of BlackBerry OS, nothing written in Java (almost all apps) for RIM’s previous OS will run under BBX. In reality this means almost the entire collection of apps currently available for sale for BlackBerry devices will not run on upcoming devices.

Which leads me to problem number 2: Those devices are shipping when? According to this Pocket Lint summary of the BBX announcement, sometime in 2012. Sometime. So RIM just announced a new OS that won’t run much of its previous software for an unknown device that will ship sometime in the next 15 months.

Do you see any problems with this?

There is a long and bloody history of companies who have screwed this transition up and RIM is following the playbook (no pun intended). A few points of why RIM’s approach is so wrong:

1. Nokia has gone from almost 70% market share to low-teens in less than a year because they cancelled a platform before they had another. RIM just pulled the same stunt. Why oh why would I bother continuing to write, support or develop for the BlackBerry?

2. If I am in IT I just heard that the huge investment I made in RIM over the years is no longer applicable, and RIM left me no recourse. The choice between staying with RIM or switching to iOS or Android are even par. There is no switching cost now.

3. Palm, who at least made it possible to run Palm OS apps, also tried to transition and failed. Why? Partly because they couldn’t get and keep developers interested. My choice as a developer: write for RIM’s BBX, with almost 0 devices sold or write for Android, iOS or Windows Phone, which have millions of devices sold? No brainer.

4. Two companies made technology transitions recently and did it very well: iOS and Android. Developing for smartphones and developing for tablets are two very different things. With the iOS example, they made it simple to run your existing iPhone apps on an iPad, in either a 1x or 2x mode. Perfect! Hundreds of millions of apps on Day 1. But the experience was clearly inferior and millions of apps were upgraded quickly. On top of that, Apple made it really easy to support both platforms at the same time so I could re-use a lot of code. And finally they included a bunch of developers before-hand to ensure that many apps supported iPad out of the gate and then relentlessly featured those developers. RIM did none of this.

RIM: I have given you guys the benefit of the doubt for a long time, even as your market share has shrunk. I thought, there are a bunch of smart people in Waterloo and thought they are going to get this transition right. I no longer have faith in your ability to pull this off. Unless something amazing is happening behind the scenes we will be talking about RIM along with Symbian and Palm, systems that could have been major players but are now left in the dust of history.

For better or worse, so far, my predictions of platform dominance are coming true. Smartphones look to be an Android, iOS, Windows Phone world. The remaining question may be market share.