Can RIM recover from recent woes?
RIM’s biggest challenge is to rediscover its ‘wow.’
Of all the many things that have gone wrong for Research in Motion, the least spectacular — and perhaps the most damaging — occurred over the past week.
At the annual global gathering of software developers in San Francisco, the Canadian tech company failed to deliver any "wow." In fact, it failed to deliver anything other than a general message of reassurance — and a plea for patience — to the people who develop the new applications that are so integral to selling its devices.
This did not sit well with the influential — and impatient — crowd, a group that is strategically significant to RIM and its future. The people who develop applications for the likes of RIM are in the business of "wow" — and they know it when they don't see it.
RIM's top brass delivered no details on the new BBX platform, no other new products, no clear timelines for delivery. There was no map for a bold path away from the rubble of diminished market share (from 19 per cent to 12 per cent), disappointing earnings (for the quarter ended in August, revenues were down 10 per cent and earnings were half of what they'd been a year earlier), the flawed launch of the Playbook tablet or the recent service outage that ticked off millions of Blackberry users around the world and raised tough questions about reliability.
In short, RIM failed — once again — to manage external expectations.
It sounds like a ridiculously banal shortcoming — especially in the context of debt-related riots on the streets of Greece and world hunger. But in an intensely competitive smartphone market populated by twitchy investors, the impact of every little stumble is greatly exaggerated.
With user and investor confidence wobbling, RIM has officially gone from a "trust me" to a "show me." In other words, that absent "wow" factor now has a clear price attached to it, possibly the ultimate price for a company that has enjoyed remarkable success and, until recently, suffered few setbacks.
This new status is particularly relevant given that technology companies, with the exception of Nortel and a few others, typically fade away rather than flame out. When market share begins to drift, so does mind share. And it's a trend that's difficult to fight.
Given how much everyone enjoys a good pile-on when a company is hobbled, there's been no shortage of critical analysis directed at RIM and its management team. As always, some of it has merit and the rest is just gratuitously mean.
Many of the critics are focused on the view that RIM's founding executives are past it and should step aside.
There's no question that the skill set of entrepreneurs has to change radically as companies mature and grow. Neither is there any question that company founders are usually intensely engaged and possessive of what they've created — and they find it difficult or even impossible to relinquish control to professional managers at a certain point.
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