OT: RIM Is Not Doing Well

[Fugu]

You can take what you think you see on the streets, but I work in the industry. Blackberry is a more expensive platform to operate and an inferior product. Five years ago, you couldn't get by without them, but now, they're a sinking ship from a corporate perspective, and everyone in my fairly sizable network of well-placed colleagues is taking their business elsewhere. You're pissing money away to stick with them. Their reputation is bad enough tha the would have to do something groundbreaking to even start getting consideration again.

I think what he's saying though is that very few companies have actually abandoned or switched over from BB. Almost everyone I know in several industries still use Blackberries. There's no talk yet of a massive changeover.

 

[Crazy_Ike]

I think what he's saying though is that very few companies have actually abandoned or switched over from BB. Almost everyone I know in several industries still use Blackberries. There's no talk yet of a massive changeover.

Inertia.

 

[Fugu]

Inertia.

Probably. I agree with the geeks (affectionately) that the other platforms are better, wave of the future, etc., but at the moment the corporations who made RIMM what it is are still customers who buy replacement phones. How quickly that can change over is anybody's guess, but service providers are also going to have to package the sexy new phones at reasonable rates. They may still feel they don't need to do that.

 

[berklon]

I think what he's saying though is that very few companies have actually abandoned or switched over from BB. Almost everyone I know in several industries still use Blackberries. There's no talk yet of a massive changeover.

Yes, I was refuting the point that only lawyers and politicians use blackberries now. That's utterly ridiculous. Blackberries market share in North America is shrinking, no doubt... but some are exaggerating how much they've dropped. RIM still sells plenty of devices.

 

[Fugu]

Just putting this chart here.

Given the current discussion, the question I have is what are total unit sales?

Is it possible that BB has held on to a good chunk of its customers, while all the market has grown? That means they may even have increased sales during that time, but the competition has created new segments and customers? I am able to select my own device, but most BB users are handed their unit by the company.

In a sense, we're looking at two segments, one with a gatekeeper and one that is direct to consumers. An analogy would be over-the-counter pharmaceuticals, which the consumer chooses directly, sees ads geared at them, etc. The gatekeeper side is the ethical pharmaceuticals where a prescription is required, and in most cases, the doctor tells you what you'll get (now with insurance input, but that's beside the point here). You may have some input, but to get any of the options, you still have to go to a doctor.

BB targeted corporations and group sales; Apple totally neglected this segment and even lacked the applications that would allow its use with the MS controlled PC and software applications markets.

 

[kdb209]

Given the current discussion, the question I have is what are total unit sales?

Is it possible that BB has held on to a good chunk of its customers, while all the market has grown? That means they may even have increased sales during that time, but the competition has created new segments and customers? I am able to select my own device, but most BB users are handed their unit by the company.

In a sense, we're looking at two segments, one with a gatekeeper and one that is direct to consumers. An analogy would be over-the-counter pharmaceuticals, which the consumer chooses directly, sees ads geared at them, etc. The gatekeeper side is the ethical pharmaceuticals where a prescription is required, and in most cases, the doctor tells you what you'll get (now with insurance input, but that's beside the point here). You may have some input, but to get any of the options, you still have to go to a doctor.

BB targeted corporations and group sales; Apple totally neglected this segment and even lacked the applications that would allow its use with the MS controlled PC and software applications markets.

I believe that chart is Market Share for new handset sales - not subscriber base.

Other numbers I've seen for the NA Subscriber Base show a ~30% share - although that dropped by over 5 pts in a single quarter - and that was the quarter before AAPL started selling iPhones on Verizon's network in Feb.

edit: other sales numbers show a handset unit sale market share dropping by over 2/3's in 9 months - from 32.5% (6/2010) to 10.6% (3/2011).

The story is no more encouraging for RIM, which according to Kantar has seen a huge fall in the number of sales in the US, the world's biggest smartphone market. There its share has fallen from 32.5% in June 2010 to just 10.6% in March 2011, meaning that it only sold an estimated 1.4m devices there.

 

[Fugu]

I believe that chart is Market Share for new handset sales - not subscriber base.

Other numbers I've seen for the NA Subscriber Base show a ~30% share - although that dropped by over 5 pts in a single quarter - and that was the quarter before AAPL started selling iPhones on Verizon's network in Feb.

Much better. Shows the importance of asking the right questions. We still don't know if the entire segment has grown, as eyeballing that chart might lead one to believe that Google was the only company that gained users, and that it was at RIMM's expense.

The other chart isn't exactly encouraging, but it might also indicate that companies in the US have already bought in so you're not going to see a huge growth in subscribers (especially if they're actually cutting jobs...).

 

[nomorekids]

I think what he's saying though is that very few companies have actually abandoned or switched over from BB. Almost everyone I know in several industries still use Blackberries. There's no talk yet of a massive changeover.

I know what he's saying, and I'm flat out disagreeing with it. I work in Nashville, which is the epicenter of the healthcare technology industry. There are 5 shops in the healthcare field alone that employee 20K+ employees. I've worked for two of them, and have contacts at the rest. Of those 5, 3 have already moved off of BB's platform (2 android, 1 iPhone) and another is going to do so when they finish their Exchange upgrade from 2007 to 2010. I no longer work in healthcare IT,but my company ( a government agency) has abandoned Blackberry over the last year, as well, in favor of Android devices. We have one legacy BES that is still active, for employees with personal devices linked, but we've notified them that the server will be retired on September 1, and if they wish to continue receiving e-mail, they need to switch to an ActiveSync-compatible device.

It's a no brainer from a cost perspective. Either way, you have to pay for the Microsoft Exchange CAL(client access license), but with Blackberry, you ALSO have to pay for an expensive BlackBerry Enterprise CAL, essentially doubling your cost. That's not even accounting for the cost associated with running the BES (hardware, cooling, power, OS license, etc). Conversely, ActiveSync is native to Exchange--it requires no additional hardware or licensing.

From a device standpoint, we can get our Android devices (HTC EVO Shifts) at about 75 percent of the cost of the Blackberry Curve, our previous corporate device, and our users like the experience and features of the Android better. Again..it's a no brainer.

Obviously this is all somewhat speculative, but I consider myself pretty connected with the IT world, and as I've mentioned, I have a lot of contacts. Unless Nashville is some sort of vacuum, the movement is, without a doubt, getting away from Blackberry. Being conscious of all of the factors I just mentioned, I can't think that it's any different anywhere else. To reiterate...a company has to pay considerably more and dedicate more overhead to a product that doesn't offer anything to justify the added cost.

 

[Melrose Munch]

they burned their bridges a long time ago, too many options with 4G phones now

they show have took the kids advice and design some phones for teens that would have helped them

I agree. I also agree with berklon about usage. RIM needs to become for kids only.

 

[Fugu]

Obviously this is all somewhat speculative, but I consider myself pretty connected with the IT world, and as I've mentioned, I have a lot of contacts. Unless Nashville is some sort of vacuum, the movement is, without a doubt, getting away from Blackberry. Being conscious of all of the factors I just mentioned, I can't think that it's any different anywhere else. To reiterate...a company has to pay considerably more and dedicate more overhead to a product that doesn't offer anything to justify the added cost.

This seems to be pretty accurate. I'm just not sure how long it will take for the changeover. Crazy_Ike and I finally found something upon which to agree--- inertia.


PS Thanks for breaking down all the elements too.

 

[Semantics]

You can't be serious.

I work in downtown Toronto and every second person I see has a BB, and they're not all government employees and politicians. BB's are huge in the financial sector - it's my company's preferred device (due to security) and we have around 100,000 employees worldwide. The same scenario plays out for other companies where my friends work. I'm actually surprised at how many kids I see with BB's.

I hate to say it, but Canada is often behind when it comes to technology trends, and it's also a given that with TO there's going to be a strong bias towards the hometown player that's an hour down the 401. What you see on the streets of TO isn't at all representative of where the industry is as a whole or where it's going. You'd have a much much harder time finding even a single BB user in the Silicon Valley or on the streets of San Francisco.

 

[SuperDave21]

Dolby sues RIM for patent infringement

Article courtesy of The Loop...

http://www.loopinsight.com/2011/06/18/dolby-sues-rim-for-patent-infringement/

Dolby sues RIM for patent infringement

"Dolby Laboratories filed a patent infringement lawsuit against RIM late in the week, adding to RIM’s already bad week.

Dolby claims that RIM infringes on patents covering “highly efficient digital audio compression technologies which allow manufacturers and consumers to provide and enjoy high quality audio while using extremely limited amounts of transmission and/or storage space for such audio.â€

Dolby says its technology is found in the BlackBerry and PlayBook devices. All other smartphone manufacturers license this same technology for their devices, according to Dolby.

“Litigation was regrettably our last resort after RIM declined to pay for the use of Dolby’s technology,†said Andy Sherman, executive vice president and general counsel of Dolby. “We have a duty to protect our intellectual property.â€

The lawsuit seeks damages and an injunction to halt sales of the BlackBerry and PlayBook."

 

[Mwd711]

I think what he's saying though is that very few companies have actually abandoned or switched over from BB. Almost everyone I know in several industries still use Blackberries. There's no talk yet of a massive changeover.

I think it depends on the industry. In the medical field, Palm dominated the market for many years. There were very few docs who didn't have a Palm because of their many apps that were made for doctors and pharmacists. BB started to compete in that market and took some share away. Then the iPhone came on the scene, and that was the end of BB and Palm in healthcare. There's a few BB and Palm loyalists left within meds but not too many since the apps don't exist. Android has made some inroads but they still lack the professional apps selection that iOS has.

The iPad is also dominating. Many hospitals are using them exclusively and many medical schools hand them out during their white coat ceremonies. Go to any medical convention and almost everything is marketed for iOS devices. Blackberry is DOA there and I'm not sure I see any products where they can innovate and come back. They have been late to the party over the last ten years or so as the others passed them by technology wise.

 

[HarrySPlinkett]

You're right.

Just look how well Palm is doing now, after bouncing back from their troubles.

The Palm Pilot was once ubiquitous and the must-have, dominant PDA in the business world. And they're back on top once again.

In what way could palm possibly be considered 'back on top'? If you know 5 other people who regularly use a palm device as their primary handheld over an iPhone, android or even a blackberry, I would be astonished.

 

[TaketheCannoli]

You can take what you think you see on the streets, but I work in the industry. Blackberry is a more expensive platform to operate and an inferior product. Five years ago, you couldn't get by without them, but now, they're a sinking ship from a corporate perspective, and everyone in my fairly sizable network of well-placed colleagues is taking their business elsewhere. You're pissing money away to stick with them. Their reputation is bad enough tha the would have to do something groundbreaking to even start getting consideration again.

They've pissed a lot of major enterprises off and their license model has a high TCO while their technology is way behind other smartphone platforms, BUT they have a better security model. The platform won't go away, it will just keep shrinking. I believe BB-OS and BES will be the equivalent of OS390 or Z-OS.

Given the current discussion, the question I have is what are total unit sales?

Is it possible that BB has held on to a good chunk of its customers, while all the market has grown? That means they may even have increased sales during that time, but the competition has created new segments and customers? I am able to select my own device, but most BB users are handed their unit by the company.

In a sense, we're looking at two segments, one with a gatekeeper and one that is direct to consumers. An analogy would be over-the-counter pharmaceuticals, which the consumer chooses directly, sees ads geared at them, etc. The gatekeeper side is the ethical pharmaceuticals where a prescription is required, and in most cases, the doctor tells you what you'll get (now with insurance input, but that's beside the point here). You may have some input, but to get any of the options, you still have to go to a doctor.

BB targeted corporations and group sales; Apple totally neglected this segment and even lacked the applications that would allow its use with the MS controlled PC and software applications markets.

I do believe we are now seeing changes in the corporate market. Many IS departments are still supporting Blackberry devices by maintaining the BES servers. What I've seen is that about a year ago they began to offer choice, then recently I've seen a number cap their BES CALs at current or even reduced them at renewal. This means users will be driven to lower cost solutions like Google and Apple. The license model and the cost of maintenance incents the enterprise to reduce and eliminate users, while replacing them with other smartphones.

 

[SuperDave21]

RIM is black-burying carriers with half-baked BlackBerrys

Article just shows how desperate RIM is in the current market. They are drowning as a company.

 

[Melrose Munch]

In what way could palm possibly be considered 'back on top'? If you know 5 other people who regularly use a palm device as their primary handheld over an iPhone, android or even a blackberry, I would be astonished.

He was being sarcastic.

 

[Steve Passless*]

If people hadn't boycotted Balsillie for trying to move a warm-weather hockey team, none of this would have happened.

 

[Jeffrey93]

I hate to say it, but Canada is often behind when it comes to technology trends, and it's also a given that with TO there's going to be a strong bias towards the hometown player that's an hour down the 401. What you see on the streets of TO isn't at all representative of where the industry is as a whole or where it's going. You'd have a much much harder time finding even a single BB user in the Silicon Valley or on the streets of San Francisco.

Odd...most places I go if it is business related it is almost always a Blackberry....it's shocking when it isn't.
If there is even a remote chance a person uses their device for business they typically have a Blackberry.

16 year old kids that love playing Angry Birds or getting Apps that make your phone look like a glass of beer....well that's a different story....

I also know an enormous amount of people that are supplied a Blackberry by their employer and don't even have a personal device or purchase a non-Blackberry device for personal use for no other reason than 'If I need a Blackberry I'll use my work one.'.

Market share can be interpreted in many different ways. From what I have read RIM missed it's projected revenues slightly...but they were still up. The company hasn't been hitting its own goals, which looks bad. They're still doing quite well though.

 

[Gobias Industries]

Market share can be interpreted in many different ways. From what I have read RIM missed it's projected revenues slightly...but they were still up. The company hasn't been hitting its own goals, which looks bad. They're still doing quite well though.

Companies that are doing quite well generally don't see their stock drop almost sixty-percent in three months...

 

[Fugu]

@kdb. I received about 3 PM's from you. The server migration is causing a few glitches. The PM's get sent even though you get the server error message.


For people noticing that they've lost posts, it is part of migration being made and there has been a glitch or two that's getting cleaned up right now. That means some of your posts made today will disappear.

 

[Fourier]

200 people let go in Waterloo yesterday. It seems they were all in the manufacturing unit.

 

[Melrose Munch]

Can we get a better board. This layout sucks.

 

[jessebelanger]

Companies that are doing quite well generally don't see their stock drop almost sixty-percent in three months...

Just to add some numbers to that...

Jun 1, 2011 42.36 42.50 25.82 25.89 34,091,000 25.89
May 2, 2011 48.88 48.95 42.55 42.85 13,776,000 42.85
Apr 1, 2011 56.85 57.32 48.20 48.65 15,557,400 48.65
Mar 1, 2011 66.35 68.81 55.77 56.54 12,985,000 56.54
Feb 1, 2011 59.54 70.54 58.81 66.20 10,625,900 66.20

 

[Blackhawkswincup]

Can we get a better board. This layout sucks.

This layout is fine

I like HF the way it is