RIM May Need To Die For Blackberry To Survive

Every iconic brand is a precious asset that needs to be taken care of in order to fulfill its purpose of carrying and protecting a business. Blackberry may be become a paper book example just how much damage a brand can survive and when it is time to start from scratch. As we are wrapping up 2011, it appears that RIM has managed to entirely wreck its reputation on every level and maneuvered the company into a ditch it may not be able to leave anymore. RIM is beyond repair.

In 2003, RIM was a rising star with a bright future. I can remember Mike Lazaridis, co-CEO of RIM, bursting with confidence in an interview I did for a client; he was laser-focused on the company’s vision of delivering the best phones for corporate users. Back then, RIM owned the mindshare of the requirements of the time – completely locked down phones that provided ultimate security. Back then, Lazaridis even stated that camera phones were out of the question as they would be rejected by corporate users. He noted that Blackberrys may get media players, though. The market demands may have changed over the past eight years, but it was very apparent that Lazaridis understood the market he was in. Sometimes after that, probably just around the time the original Pearl consumer phones were introduced, RIM lost its focus, which was exposed in a brutal way by Apple’s iPhone in 2007.

Blackberry Bold 9900 / 9930

Like Nokia, RIM felt it had all the time in the world to continue on an increasingly blurry path, but ignored a changing market and, perhaps more importantly, an unprecedented opportunity to change wireless communications and open entirely new markets. As a result, RIM lost its dominance in the corporate market and delivered half-baked phones in shoddy build quality and a software platform with a mix of business and consumer features that lost touch with reality from version to version. RIM turned from the company that was setting communication trends into a company that was too fat to even follow a rapidly evolving market, let alone innovating with those that were changing it.

RIM’s unfortunate development peaked last week when RIM reported its third quarter results, which showed a slight revenue decline year over year and a still solid $265 million profit. However, there is no denying that RIM is in trouble and the voices that are expecting actions instead of phrases that invoke hope for a miracle are becoming louder. Yet, RIM is paralyzed and incapable of initiating the dramatic change that is necessary to save the company and the Blackberry brand in the place that has the responsibility to do just that: It’s C-level leadership. Like a couple of drunk RIM senior executives that recently embarked on an embarrassing episode on an airplane and forced it to be diverted due to their behavior, RIM’s top management may be in a state where they are engaging in unreasonable behavior that is bringing the entire Rim-craft down.

During the conference call, co-CEO James Balsillie said that he and Lazaridis “are leaving no stone unturned and are evaluating a number of areas, including product management and the number of SKUs offered, supply chain and building material cost efficiency, marketing and advertising, partnership and licensing opportunities, organizational and management structure and opportunities to leverage the BlackBerry infrastructure.” Is it just me or is this a statement of someone who is already standing on an cracking ice cover and desperately asks for a thread to hold on to something that is dying?

Lazaridis repeated the “no stone unturned” phrase, which sounded almost surreal, if you consider the fact that it is too late for stone-turning at RIM. Customers have been leaving in droves, as a result of a lack of innovation, focus and dedication. The iconic Blackberry is in shambles and what once appeared to be a rock solid brand is worth little more than Balsillie’s and Lazaridis’ promises that investors don’t buy anymore. Desperate efforts and pleas that Blackberry can be saved with a new technology platform and new products in the pipeline do not cut it anymore when customers are convinced that there are dozens of better choices out there. I cannot remember how often I read from people on Facebook that they could not wait to ditch their corporate Blackberry for a BYO iPhone. Years of bad product quality, virtually non-existing (consumer) customer support, marketing failures with highly questionable product names, and terrible software can’t be wiped off the table. It is time for a dramatic move. Balsillie and Lazaridis will have to consider leaving if they want their Blackberry to survive. Along with them, the baggage of RIM should die.

From our perspective, Blackberry should become its own company and go hiding for a year or two. Blackberry needs to start tabula rasa and ditch every product it has right now. Simply trying to catch up with Apple and Google will only delay its death. It may be better to take the losses for an entire year and then rise from ashes with something completely new, something that is focused to a specific customer group like the original Blackberry was. This time, however, the company should take emerging threats more seriously.

Wolfgang Gruener in Business on December 20