Research in Motion (NYSE: RIMM) is dying. I don't expect it to last much longer, even in spite of how loyal its users are,
The first and biggest reason: apps. Or in the case of RIMM, the lack of apps. Apps define the capability of the phone, and the hardware in the phone exists only to empower applications. A great in-phone camera is useless if the processing is lame, you can't easily edit it, or it doesn't integrate well with the full range of social media clients out there. RIMM lost the market share that really matters: developer market share. This story tells of RIMM sending our marketers to try and court developers. Nice try, but when fewer than 15% of all app developers are supporting your platform, the road ahead gets pretty challenging. Do you have a super-capable OS and API to help them develop. Well, compared to the Apple's iOS 5 and Android 4.0, not so much. It appears that Apple and Google are so far ahead that the only competition between RIMM, Nokia, and Palm/HP (yes, the still make phones) is to see who be the slowest to die.
As RIMM's evangelists pitch to developers in the Valley about the international prospects of the platform, it is a tacit admission of failure-- as if to say "ignore our crumbling market share in the countries with the most money to spend on our product-- look at how well we're doing in the developing world!" It brings to mind pictures of Cubans driving '57 Chevies in the mid-90s, or that random Uzbek kid with a Michael Jackson Thriller T-shirt on in present times.
But Goldman is estimating that RIMM's market share is slipping overseas, too. The countries with money want a better product, and there is plenty of it available. Technology never trickles up from poorer countries.
RIMM's Playbook foray into the tablet market was perceived as the iPad wannabe that it is. It is clunky and overpriced for what you get. Did I mention that app situation? They market this product as being a "professional-grade tablet." Really? Simply being Blackberry-branded makes it professional? Show up as a key presenter with an iPad or a Playbook-- which one is going to get more positive attention. IPads are bone fide cool now. IPad competitors are thus far just novelties
This brings up the really key conundrum that RIMM finds itself in. Blackberry users are by and large people who got plugged into the Blackberry earlier and have stuck with it. Businesses that are wedded to Blackberry products do so not because they are better performers, but because they work well enough and have two other advantages: they are familiar and there are no transition costs. In other words, being status quo is the primary virtue of the Blackberry platform.
But the mobile device market is anything BUT status quo. Apple proved that when it went from a non-player in smart phones to the dominant player in (can it be only?) four years. It introduced a better platform and lured in millions of new customers. This, with a phone only available on a SINGLE wireless carrier! How valuable is customer loyalty in mobile devices? Hard to say, since it doesn't exist.
Where are the new Blackberry adopters? There seem to be few. Who wants to carry two phones around when you have a newer Droid that can do everything the Blackberry does and so many things it can't? Even beleaguered Nokia and it's Windows phone are doing better than RIMM is.
RIMM's only hope, in my opinion, is to license a better OS-- and fast. The basic handset of a Blackberry is something people like. But the software/firmware shortages have left the blackberry as the dumbest "Smart" phone in town. Early adoption of Near Field Communication will help buff a little rust off, but it cannot cure the current genetic problems with the RIMM mobile product.