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(G)RIM times for Blackberry

BlackBerry brand blunder

Fresh outages, dwindling finances and pent up inventory is only half of Blackberry’s list of woes, even as the company puts on a brave front for the public. Heroic or delusional?

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July 2, 2012 5:06 by



If RIM’s sobering Q1 financial results showing a whopping $518 million loss didn’t spell it out clearly, then news of further delay of its much hyped ‘BB10’, ought to have done it. The writing on the wall says “Its over” and RIM may as well pay heed by selling off to a worthy contender (*cough Apple*). Blackberry’s contribution to the world will always be remembered, but hanging onto past glory will only dilute the power and credibility of ‘Brand Blackberry’- or whatever is left of it.

Morgan Stanley recently commented in a story about RIM’s dwindling fortunes, “We believe the only way RIM remains a viable entity is at a fraction of its current size, a transformation that erases much of its earnings power. The next nine months will likely see rapidly deteriorating fundamentals on the one hand offset by stories of potential strategic options on the other.”

RIM is seen doing just that, with news of another 5000 job cuts in its global network of 16,500 employees. However, the company denies any reports of selling off portions of its business or licensing its popular messaging service- the BBM.

RIM responded to the story saying “We believe the best way to drive value for our stakeholders is to execute on our plan to turn the company around.”

Turn the company around? While the company’s fighting spirit is admirable, its also worrying that it won’t give up. Does this mean more service outages for Blackberry users due to ‘technical challenges’?

It’s a bit like watching the Titanic go down in slow motion, even as the heroic captain tries to save it from certain doom and the musicians play on the sinking deck. As romantic that idea may be, it’s best for RIM to realize that today, customers jump ship without giving two hoots about fallen brands.

This brand infidelity has crushed the market for Blackberry in the UAE as well. Blackberry enjoyed tremendous popularity in this region up until 2011, even as the world was being attracted by Android phones and the latest versions of the iPhone. Despite offering extremely competitive packages for Blackberry, the country’s mobile service operators noted a steep decline in Blackberry customers.

But it’s not just distracting shiny objects, that led to the downfall of Blackberry. RIM’s marketing endeavors have slackened off bigtime and the technical problems have added to the company’s list of woes. JP Morgan Securities and RBC Capital Markets are now assisting RIM in reviewing its business and financial performance, to advise the company on its future prospects.

Given the circumstances, it is unlikely that the BB10 will single handedly turn RIM’s fortunes around. Earlier in 2012, Bloomberg reported the total value of pent up inventory of Blackberry and Playbook devices to be about $1 billion, that’s just languishing in warehouses, gathering dust. Blackberry can literally be heard praying that BB10, to be released in the last quarter of 2012, is not met with the same fate.



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3 Comments

  1. anon on July 2, 2012 7:56 pm

    Licensing BBM is their light at the end, also job cuts are unavoidable, but i disagree on the brand infidelity part, i think lots of people still love the brand and they need to leverage that.

     
  2. Sajjad on July 3, 2012 2:12 pm

    2 things worked well for RIM. BBM and Mail.
    No one was interested in their hardware nor their OS. Their phones & OS never really looked too appealing. So RIM, upgrade your hardware and go Android or let other manufacture make hardware- and you sell the apps, mainly BBM & Mail.. or perhaps its too late for even that

     
  3. Sajjad on July 3, 2012 2:13 pm

    ^ i meant.. license the apps/technology

     

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