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Internet & Technology written for Canadian Communith news by Mike Sterling To Comment on this article Click Here |
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Research in Motion should conclude a 'big deal' or face dire consequences. RIM, the makers of the famous Blackberry is having a great deal of difficulty. Coming from a point where they almost achieved total dominance to the present troubles has been discouraging. Is it a technology Greek Tragedy in motion? They've missed a generation of technology. Generations are measured in months in their industry. Recently, they have missed key scheduling dates. Their much loved Blackberry has been subjected to a marketing coup by Apple and Google's Android operating system is running on lots of hardware platforms. For example Android runs on Motorola, HTC and Samsung. In addition a huge deal formed between Nokia, the Finnish telecommunications giant and Microsoft threatens the heart of their technology and world market reach. So what can they do? Cost cutting is an option that they have taken, but the real need is to recover the lead in technology fueled by potent marketing and leapfrog products. Right now they have neither. They have lost share and lost momentum. They can drastically scale back, but that may be an avalanche to oblivion. In the fast moving market, their patents are not much good. Their base operating system is aged and their device underpowered. Something new is awaited. Their tablet has not cut into any market owned by the Kindle or Apple. They have no content to match or hordes developers to take a chance on them. How about a big deal with Google? Chatter says that has been investigated. That type of deal would be standing in line, last behind Motorola, HTC and Samsung and others. What they need to do is to be acquired or make a major long term deal with Microsoft-Nokia. A deal will align them with a company with deep pockets in Microsoft and market share with Nokia. But, Microsoft is not a good model for a hardware company. Nokia knows how to make hardware, however. So what does RIM bring to the table? The answer is a declining market share of loyal customers. Microsoft has always been a software giant, which reduces their risk as others take on all the obligations of making devices. Blending RIM with both Microsoft's operating system and products and Nokia's push world-wide, may be difficult. The fact that Nokia has dumped their operating system for Microsoft's is telling and conclusive. It's an all-in move. They can't go back. What's in it for Microsoft and Nokia? They can take a major player off the board, if and only if they capture the loyalty of the customer base of the Blackberry. The deal would be too expensive just to mothball them. Nokia had an R&D budget more than 4 times that of Apple. They can and now have reduced that by concentrating on the hardware and dumping their own operating system long range plans. This can be true for RIM too, but what do they bring that Nokia does not have and more? Microsoft can bring RIM the cloud, hundreds of software products, a huge installed base, search engines, servers and R&D resources, home appliances, games and entertainment. RIM can bring a loyal customer base. It might make sense for Nokia to share the gifts that RIM could bring. They don't want to have them in on the big deal unless they can share the profits and maybe build a common product base. What Nokia would gain is questionable. The Microsoft - Nokia deal made sense from a market share, product and geography point of view. Adding RIM makes sense only if their loyal market can be held and expanded over the next few years. Having another fading technology may not make sense to Nokia-Microsoft. The Microsoft-Nokia executives may conclude that it is not worth the treasure and time to do a deal. This is a story that gets played out over and over again in the high technology market place. Let's hope that RIM finds a way through the maze that they seem trapped in today. Their stock has plummeted in one years time reflecting investor worry.
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