Could this be RIM’s Lazarus moment?

It might seem preposterous that RIM could stop making BlackBerrys and still survive, but there is a big, blue precedent for the move

by James Cowan

We’ve become so accustomed to treating Research In Motion as a dying enterprise, any indication that it might, actually, perhaps, maybe survive is nothing short of miraculous.

Still one week away from the launch of the new BlackBerry 10 operating system, the company saw its stock rise by 10% on Monday alone, closing at $17.41 on the Toronto Stock Exchange, having risen from a 52-week low of $6.10 in September. Anticipation for the new operating system—which has received positive, if not effusive, reviews—is partly responsible for the gains. But more important for Monday’s improvement was president and CEO Thorstein Heins’ admission to German media that the company is considering selling its hardware division. In an interview with newspaper Die Welt, Heins noted RIM’s in the midst of a strategic review that is considering “several options, including the sale of hardware production.” RIM might also begin licensing its software, but any decision will come after the launch of BB10, according to Heins.

Could this really be RIM’s Lazarus moment? If so, it may come thanks to the same alchemy that once saved another ailing tech giant: IBM.

It might seem preposterous that RIM could stop making BlackBerrys and still survive, but there is a big, blue precedent for the move. For most of the last century, IBM was the market leader for business technology, particularly mainframe computers. But it fell behind as other, nimbler competitors like Microsoft emerged. In 1979, the company scored a billion dollars in profit. By 1993, it was losing $8 billion a year and pundits were predicting the corporation would be broken up and sold for parts.

But IBM saved itself by recognizing, in the words of CEO Lou Gerstner, that there was no future in “just pushing iron down [its customers] throats.” The company shifted away from the hardware business, even selling its entire PC division in 2004. IBM instead became a software and consulting business. IBM made close to $16 billion in 2011, with 60% of the profits coming from software licensing fees and service contracts.

Regardless of the merits of the BB10, it seems unlikely RIM will ever regain the market share it’s lost to Android and Apple. Following IBM’s example, however, shows RIM might save itself by cutting the cord on its signature phone.

James Cowan writes for Canadian Business where this first appeared. 




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Could this be RIM’s Lazarus moment?

  1. Big assumption saying ” it seems unlikely RIM will ever regain the market share it’s lost to Android and Apple”

    Do you have a crystal ball to back that up. The same could be said for iPhone’s late entry in 2007 and Android’s even later entry in 2009.

    • iPhone’s late entry in 2007???

      Was there a big pre-iPhone smartphone market that I missed prior to 2007?

  2. This would be ironic wouldn’t it?

    Blackberry-maker RIM has a plan to save the company. STOP MAKING BLACKBERRIES.

  3. I agree with the main point of the article, but IBM didn’t lose PC sales to Microsoft. Microsoft has never, to my knowledge, made PCs.

      • There’s a chronological problem with the article. IBM could not have lost PC sales to Microsoft in the ’90s/’00s, if Microsoft didn’t produce a piece of hardware before 2012.

        I had the same reaction as JoeC. How did IBM lose market share to a “competitor” that didn’t produce a competing product until very recently??

  4. How about RIM (or even somebody else) make a phone with a slide out keyboard so there’s a hope of texting, AND, as in also, a big screen that you can use the whole of for reading text, viewing pictures, and everything else in more than .2 size font? You know, I know I’m an aged person–but so is the majority of the population now, and while smart phones are for kids and all that, many of those ‘kids’ were just young at heart a decade ago. Eyesight starts to go at 40, after all. This either/or crap is driving me crazy!

    • They did. It was called the BlackBerry Torch. It didn’t sell as well as expected, and RIM stopped producing it.

  5. Everyone wants a BB10. It will regain every single percentage of market share that it has lost. iPhone is old OS and Android is over rated for what it gives.

    LONG RIMM

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