Does RIM's "Huge Loss" Signal Wider Handset Market Deterioration? 278
zacharye writes "RIM was expected to deliver a nightmarish, -30% year-on-year revenue decline into the May quarter — the company issued its latest profit warning just four weeks ago. Yet it ended up missing the lowered consensus estimate by 10%, generating just $2.8 billion in sales. The reasons for RIM's decline are well-known and will be rehashed again over the next 24 hours. But the size of the F1Q13 sales miss raises another question: apart from Apple and Samsung, is the handset industry drifting into serious trouble?"
No (Score:5, Insightful)
Look at apple's profits.
And please stop the sensationalist question mark titles.
Just because you build it doesn't mean they'll ... (Score:5, Insightful)
Re:Obvious? (Score:5, Insightful)
You don't disrupt a market by being a follower. Being a follower is always a volume business, you are just there to run a numbers game.
In apple's case they re-wrote the rulebook and turned the first question abotu every product into "But is it better than apple's offering". Once a single player is in that position t becomes very hard to unseat them by simply copying. You need to change the rules again to win that game.
No, just the mediocre handset industry. (Score:5, Insightful)
Just bring out a decent product. Nokia's N9 with zero marketing, blocked in all major markets and Nokia's own CEO briefing against it still managed to sell millions of units.
Because it's a superb smartphone with a superb OS.
RIM will bounce back if BB10 is as good as it's supposed to be, on decent hardware, in multiple form-factors.
Re:No (Score:3, Insightful)
The handset industry is facing the same problem as the PC industry did during the 80's and we will end up with 2 or 3 large players.
No, just RIM (Score:4, Insightful)
No competition (Score:5, Insightful)
Who can make a phone with all the patent traps?
Re:RIM not industry (Score:5, Insightful)
there is little shared memory for the bloated, buggy mess that was Mac OS 6-9.
bloated? Until recently I had a G3 that would boot both. OS9 started in about 10 seconds - OSX took about 2 minutes. OS9 was comfortable inside 16MB. OSX preferred about a quarter gig on that system. Everything about the UI was much faster on OS9.
Rail against its non-modern architecture all you want, but it doesn't make sense to call it 'bloated'.
Re:No (Score:4, Insightful)
We only have a handful of large players in the handset industry right now.
If it's like the PC industry, we'll get exactly what we want for dirt cheap from any one of a 1,000 different manufacturers operating on razor-thin margins.
That'd be nice, and I'd like to see Google take their Motorola Mobility purchase and kick off that trend right now.
Re:No (Score:2, Insightful)
Only with the added burden of no software flexibility and way more DRM + lock down.
Microsoft Deserve credit too (Score:5, Insightful)
Microsoft expanding their ActiveSync license program as well I would contribute to helping the iPhone succeed. Suddenly you didn't need to invest in expensive BES licensing costs, windows licensing and hardware costs just to connect a phone to a mailbox. When that happened I wondered just exactly how Blackberry would react to the market, and well they didn't.
Re:Who cares? (Score:5, Insightful)
Given that smartphones are the most widelydeployed and used general purpose computers in hands of individuals, I guess they do care. It's the future of computing.
They were in the market of cheap buffet style email for corp users and managed to get there by being convincing carriers to not price by kb with their platform.
The best chance of survival for them is to buy a T-mobile or Sprint (with the iPhone deal RIM is screwed now) and offer corp. plans for $30 a month, and then building an enterprise app ecosystem around a solid platform as QNX. No sane company will pay $100 per employee/mo if they could pay $30 and have a platform that can run apps just as good as the alternatives.
They though they where a premium brand with a premium product and now even if the products excel, they are irrelevant. If given a choice, most will prefer widely used platforms w/hundreds thousand apps and solid development tools.
Buying a carrier and being the low cost provider for corps is one of the few things that could save them - but may be too late.
what it signals... (Score:5, Insightful)
is that RIM made lousy management decisions, has a bad product, and is now paying the price for that. That's a good thing.
Re:No (Score:5, Insightful)
Also, RIM's loss was mostly from writing down old stock. It's a paper loss, making up for paper profits which never really happened.
Their position isn't good, but it's not as horrible as the half billion loss indicates.
Re:Obvious? (Score:5, Insightful)
Yeah what really gets me is that they had a headstart with their maemo tablets long before the iphone came out. These were "only" lacking the phone component, but were arguable intended to fill the same "niche" as the iphone, and yet they never really put any effort into making them really good. They could have been where apple is now, but instead we get more Microsoft crap. Way to go Nokia.
Re:Obvious? (Score:5, Insightful)
I think RIM's lead worked against them - it made them complacent. By the time they realised they couldn't afford to be complacent, the rest of the world had noticed it some years earlier.
Let's look at a rough timeline:
- RIM release the first Blackberry along with BES.
- Microsoft think "What a good idea". They integrate some of the more basic features of BES into Exchange under the name of ActiveSync, and improve it considerably as the years go by. Why does Microsoft do this? Simple, it's a popular feature and they can use it to persuade companies to upgrade their existing Exchange infrastructure rather than buy BES. All they need to do is find some handset vendors to license the client-side to.
- RIM doubtless looks into this, concludes that ActiveSync is nothing like as sophisticated as BES (it isn't), and that nobody else has released a handset that does a half-decent job of managing email anyway (they haven't).
- Apple release the iPhone. It's a swishy piece of kit - far prettier than anything RIM have ever produced, and much more pleasant to use - but ultimately not terribly sophisticated. RIM ignore it.
- Microsoft release Exchange 2007. ActiveSync is greatly improved. RIM ignore it.
- HTC release the HTC Dream - one of the first Android handsets. Android's prettier than Blackberry, and a sight easier to use. But RIM ignore it.
- Apple license ActiveSync and include support in an update to the iPhone OS. RIM ignore it.
- Google license ActiveSync and include support in Android. Phones that support Android 2.0 or later get Exchange support.
- RIM buy QNX with a view to rewriting their OS. Corporate acquisitions typically involve months of due diligence before they're announced to the public; it's safe to assume that RIM were looking into this some time before Android 2.0 was released.
So where does this leave RIM? It's Q2 2010, they've obviously decided that long-term, they want a new base for their smartphone OS. At this point they're probably at least three years behind Apple and two years behind Android. Pretty much all they can do is maintain their existing product line while putting together what will be their next major OS upgrade and hope to hell they can keep their heads above water for as long as it takes to get something released. Will they? It's looking doubtful.
Re:Obvious? (Score:5, Insightful)
My two cents worth.. RIM should dump plans for BB10. The world doesn't want another mobile OS, regardless of how good it might be from a technical POV. RIM should slot itself in with Android or perhaps Windows, but then differentiate itself with its software and services offerings (e.g. BBM, BES etc). If you offered me a truly enterprise-capable Android phone I would rip it out of your hands! Sure, margins will be thinner and the glory days will be behind them.. but they would probably survive, and that gives them time to look at the next way of disrupting the market.
Comment removed (Score:5, Insightful)
Re:Not surprising (Score:5, Insightful)
BB10 happens to be missing a feature - nobody can buy it. Sadly, "it shipped" is a critical feature. It doesn't matter how amazing it is without that one feature.
Meanwhile, Android is a crowded market that has lots of demand. People actually buy Android phones. This is the same mistake Nokia made: thinking that being the big fish in a swimming pool is better then being a small fish in the ocean.
Fanboys love to insult Android as second rate, but their "amazing" vendors would trade places with Samsung in a heartbeat because they (and Android) happen to do really well on the metric that matters in the business world: people actually buy it.
Re:Obvious? (Score:2, Insightful)
You must be a sales guy.
The number of sales is not necessarily a good proxy for the relative quality of two product, as there may be other factors that are generating the result. In the case of phones, Apple's whole ecosystem of 3rd party apps is a huge factor in phone buying decisions, as is their careful choice to make the phone itself "jewelry" as well as a useful phone.
Those two factors alone have carried the iPhone pretty far, and their momentum will probably carry them for some time even if they make no improvements and other phones leave them in the dust in terms of "quality of the os" for much the same reason that health care is about to get very expensive in the US - when you insulate people from the price, they will tend to pick the "brand" name product, and right now iPhone is the brand, and the other smartphones are "ok too."
When WinMo has the app ecosystem that Apple and Android have and has built up some brand recognition then we can start to think about sales volume as even a remotely useful indictor of os quality. Until then, the only useful indicator is actual user and developer reviews. Especially as gaining a reputation for quality is what they need in order to build the brand recognition and app ecosystem in the first place.
Re:Obvious? (Score:5, Insightful)
Re:Obvious? (Score:4, Insightful)
Apple is not dumbed down, they merely made efficient what was a blob of unconnected crap. If by locked down you mean it won't turn into the cesspool of malware that swirls around MS products and starting to be so for Android, then yes it is locked down. The alternative is to have a phone no one wants because its too easily rooted. Hell, even MS realizes this with their new tablet thingy. Apple is only overpriced to people who only evaluate hardware. MS and Linux have taught you to disrespect software and the investment it takes to write it well and have it work properly with a hardware box.
RIM's issues aren't technology. (Score:2, Insightful)
Soooo..
RIM is finally taking it up the ass. 5000 layoffs today. That's not the shocker. The shocker is they have 15,000 employees! DOING WHAT?
Here's a Canadian Engineer's perspective that you won't hear on the news.
First off; I have to use one of these flaming pieces of crap for work. Specifically, a Torch 9810 and a Playbook. They're so bad as to be borderline un-useable. Apple bias aside. Everyone I work with now carries two phones. One for secure network access and one for everything else. This is a bad f--king sign.
But that's an aside.
Back when I was in University, Nortel used to be a bad-ass R&D wing of the telcos here. If you make a phone call, you use tech they invented. Bell's original work, and Marconi's first tower transmissions were here. There was a great, long-standing communications industry tradition.
Then in the late 90's, I noticed something. All the idiots I couldn't stand in school started doing their co-op terms at Nortel. Then they went on to full employment. These aren't stupid people, they're just the unmotivated f--kheads looking for a job, not doing it for the love of the art or any particular aptitude.
There's a place for them, and a place for me, never the two shall meet. Shortly after the f--kheads moved in, they went the MBA route, and the f--khead MBA culture took over, the good engineers left, and a decades-long institution collapsed in bankruptcy. The demise of Nortel was well publicized here and in the general media.
Guess where all those fuckheads got jobs after?
Yes, the very same f--kheads bloated and tanked RIM with the very same mistakes. They hired the same unmotivated, mediocre people who do what mediocre people do best. Run s--t in to the ground and hire useless, ineffective management on management.
I'm thinking about following where these idiots go so I can short the next company to go.
People are stupid. On the upside, maybe I can get rid of the @#@$!ing pos work phone sooner rather than later.
No mercy. They deserve that they get. The markets will salt the earth in Waterloo before they're done.
I wonder if there's time to short RIM on the way down to $1.00.