Not sure if Research in Motion is too pleased with a column I wrote in today's National Post about some confusion I have over their licensing and messaging strategies. During interviews with co-CEOs Jim Balsillie and Mike Lazaridis, I attempted to get them to explain the economics of RIM's software licensing program where the company will let other device makers such as Nokia and Motorola use its popular e-mail software. The idea is you get a smaller piece of a much larger pie rather than a large piece of a small pie. Lazaridis dismissed this suggestion as "naive analysis", which made little sense to me given Microsoft has made billions of dollars from using this approach with Windows.
RIM also took some offense with the notion it's an e-mail device and software maker. Instead, it's a "wireless platform developer", which means the Blackberry or Blackberry-enabled device can be used to access other applications. While this approach makes sense from a long-term perspective, I was confused by RIM's uneasiness about fully embracing e-mail as its golden goose.
My take is that Balsillie and Lazaridis, who have been discovered by international media in the past year, have adopted Andy Grove's "only the paranoid survive" mantra. My take is they're reluctant to be seen as a one-trick pony in the fear that another wireless e-mail solution could come out of nowhere to steal their thunder. By protraying themselves as a wireless platform developer, they are trying to give the impression the threat of an e-mail competitor is already being addressed.
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Comments
Re: RIM's Fuzzy Strategy
by
Anonymous
on Fri 11 Feb 2005 03:30 PM EST | Permanent Link
Hey Mark,
Spoke with Balsillie this morning. He is a little pissed. Re: Re: RIM's Fuzzy Strategy
by
Mark Evans
on Fri 11 Feb 2005 05:09 PM EST | Profile | Permanent Link
Not surprised he's disappointed but we were asking straightforward questions that - for whatever reason - they decided to dance around.
Re: Re: Re: RIM's Fuzzy Strategy
by
Anonymous
on Sat 12 Feb 2005 11:21 AM EST | Permanent Link
Hey Mark, he's a dancer all right. Got something coming out Monday, kind of describing the balancing act that has become their style of business. Question is whether it's a house of cards. (He's wasn't that pissed, just a bit miffed)
Re: Re: Re: RIM's Fuzzy Strategy
by
Anonymous
on Mon 14 Feb 2005 11:30 AM EST | Permanent Link
Mark - I did not see your column but based on what you described, I'm not sure you are right. When RIM helps Nokia or anyone else enable BlackBerry on that non-RIM device, they still take a hefty cut of the subscription monthly fee. They just don't make any money off the one-time device sale. So it's all about getting more subs, and yes, each sub is worth slightly less to them because I think there is some revenue sharing with the device maker (but not much).
Is it possible that Balsillie and you were just talking on two different planes and not connecting? Those are my thoughts from the 3GSM conf here in France. Re: Re: Re: Re: RIM's Fuzzy Strategy
by
Mark Evans
on Mon 14 Feb 2005 03:22 PM EST | Profile | Permanent Link
All I wanted RIM to explain is the economics of its licensing program. i.e. how much it will receive on a monthly basis from each e-mail subscriber. i asked the question directly several times without success - not sure why.
Re: Re: Re: Re: Re: RIM's Fuzzy Strategy
by
Anonymous
on Mon 14 Feb 2005 07:44 PM EST | Permanent Link
Ok I think I understand now. I bet you that RIM does not want to answer you directly because they may not wany people to know that device makers take a small cut. The first big deal was Nokia if I remember correctly. They probably gave Nokia a small slice. They may try to stop giving device guys any slice, and they may not want ot be on record with a firm answer that could get their partners asking questions. Just a guess.
Re: RIM's Fuzzy Strategy
by
Anonymous
on Tue 15 Feb 2005 11:32 AM EST | Permanent Link
RIM's stratagey has always seemed a little murky to me as well. In the end I think RIM may be a small niche player, and may retain as much as 6-8% of the total market. Their high TCO and LOW ROI make them a very UNATTRRACTIVE solution for many companies.
Other Vendors have more scaleable solutions. You really should research other options. iAnywhere, Intellisync, Good, Visto and SEVEN. With the emergence of lower priced MS PPC and SmartPhone devices, the Treo650, the popularity of the Sony/Ericsson 900/910, as well as lowend Symbian/Brew/J2ME handsets, RIM has been forced to take the licenseing route. I predict that in 24-36 months RIM will be HISTORY. They will lose the patent suit with NTP, and other vendors will displace them in the MOBILE EMAIL SPACE. If you own any stock you would do well to divest soon (TAKE THE MONEY AND RUN), you know that may be RIM's ultimate strategy as well. I think they know their model is outdated and needs major redesign, but I don't think they have the resource or will to do so! Re: Re: RIM's Fuzzy Strategy
by
Anonymous
on Tue 15 Feb 2005 04:59 PM EST | Permanent Link
RIM dead in 24 months? Good as a competitor? You are nuts dude. Have YOU ever looked at what Good charges? Same solution (not as robust), same price. Good is nothing, plus they have to pay royalties to RIM (they settled a suit that RIM filed).
RIM licensed because IT guys had this feeling they were locked into a proprietary platform. The IT folks feel better about choice, even though none of the licensed devices do a great job of BlackBerry. RIM is the only company that I'm aware of with the entire solution from device to middleware to carrier relationships and support. You're telling me some little weenie company like Good or Seven is gonna stop them? Come on, this same argument existed years ago and it has never panned out. BTW if RIM had a "low" 6-8% of the mobile market do you have any clue as to where their stock would be (hint: a lot higher). Re: Re: Re: RIM's Fuzzy Strategy
by
Anonymous
on Thu 17 Feb 2005 12:52 PM EST | Permanent Link
Please do yourself a favor and review what I said before commenting. Your comment "BTW if RIM had a "low" 6-8% of the mobile market do you have any clue as to where their stock would be (hint: a lot higher)." With a subscriber base of over 2 MILLION, RIM is clearly the CURRENT leader in the MOBILE EMAIL SPACE. However with over a BILLION Mobile subscribers worldwide and RIM's recent introduction of the first device that actually works as a phone, my math indicates that is about .002% of the MOBILE MARKET.
Rim has been forced toward this model BECAUSE of its inability to scale well, provide access to multiple mailstores from the same BES, lack of support for anything other than Exchange and Domino, and Blackberries have never been very popular beyond Mahogany Row Executives. With Microsoft working with many device vendors (Palm, Nokia, Sony/Ericsson...) and Exchange2003's ability to provide native support for MOBILE MAIL SERVICES, as well as a host of other upstarts such as CTI2, Danger, Consilient, Sierra Wireless's VoqMail, and Corsoft's Aileron just to name a few. I truly believe that if RIM continues in its proprietary approach to MOBILE MAIL, then it will end up like so many other INDUSTRY PIONEERS (DEC, Tandem, Veritas, Lotus, PeopleSoft) bought by a bigger company or a Competitor. BTW the tone of your response sounds like you work for RIM? Re: RIM's Fuzzy Strategy
by
Anonymous
on Thu 17 Feb 2005 05:41 PM EST | Permanent Link
RIM is actually a service delivery platform over an underlying network. Email might be their initial "pony".
Since they have devices that run on so many wirelelss networks, plus now the WiFi device supporting SIP, I would imagine they are well positioned to be offering 3G services from an applications perspective in the IMS model (which was the buzz at 3GSM I'm told). This means their service platform, coupled with their terminals and devices have a very exciting future as IMS will dominate core network evolution in both 3GPP and 3GPP2 camps... my opinion.... i work in the industry... |
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