RIM Bets It All on BB10′S Jan 30 Release

CTV News Team spoke to me Nov 18th about RIM; Scott Laurie asked about the critical upcoming BB10 launch

Why announce a launch date of Jan 30? Because that’s the date Thorsten Heins says it’ll be ready! A respected tech icon once said: “Detail matter; it’s worth waiting to get it right” (any guesses who said that? anyone? It was the tech industry’s dearly departed guru, Steve Jobs)

RIM’s previous ‘firm’ estimate was ‘Quarter 1, 2013′. There is some risk in firming up the exact date, and doing so earlier in the Quarter. Evidently Mr Heins feels sure his team can make this date (Note: RIM only commits to Jan 30 for a ‘launch’ ie releasing full info & showing Demos to everyone; sales won’t likely happen until February).

What’s GOOD about a Jan 30 release?

Lots of companies have Jan 30/ 31 fiscal yearends- this release date lets companies either dispense unspent on a wave of smartphones in this fiscal, or wait mere days and then tuck it into next year’s fiscal.

What’s BAD about a Jan 30 release?

RIM misses pre-Holiday purchases. More relevant for personal smartphones than business or government smartphones, but Qtr 4 remains a key sales season. Roughly 170 Million smartphones are sold in a typical quarter; this Holiday season, US consumers are more confident & Emerging economy citizens are on a buying binge, so we may see an astounding number of smartphones sold. Those phones won’t be replaced for a couple years- locking out BB from another potential 200 Million or so users.

Any other considerations about missing the Holiday sales boom? The B.Y.O.D. (Bring Your Own Device) trend; a growing portion of smartphone buyers purchase it on their own (then expense it/airtime to an employer). These ‘business/ professional’ purchases therefore are subject to a the Holiday sales fever.

Why is RIM gambling it all on BB10? They have to. A company at a resource disadvantage must FOCUS! They’re doing so on their core competence areas [lawyers, traveling executives, diplomats, government workers, defense, law enforcement] They’re less than a 1/30th the market cap of Samsung and 1/100th the market cap of Apple; they have to focus, plain & simple.

Can they hold on? We’ll see. RIM’s Developed Nation sales are down; USA market share plunged from almost 12% in Q3, 2011 to 5% in Q3 2013 (Gartner). A huge plunge, but they’ve held onto a million hardcore government users, who are less likely to make a Holiday smartphone buy.

How’s RIM’s leadership doing? They’re communicating better & focusing well. The”Thorsten Heins roadshow” reassuring investors, carriers, customers, consumers, developers. RIM hasn’t lost their focus [they did in the past, wasting R&D and Marketing resources on ill-conceived Playbooks; fighting thoroughly avoidable trademark battles; addressing co-CEO's doling out company money for Options after-the-fact, etc]. I’m impressed they know their ‘core’ users include those in government, legal, defense who appreciate BB has already received FIPS pre-approval of the entire BB10 line, a huge coup that may buy them some time with government users (even tho, as of Oct 23, almost 18,000 US Customs & Immigrations staffers became free to shift from BB to Apple) .

What s critical to RIM’s success? They must do this right the 1st time and ‘keep their nose clean’ until Jan 30. No Exec scandals. No Network downs. No defects in the BB10 launch hardware. No production delays or QA issues. The ecosystem (platform) must be secure, reliable and easy for current BB users to transition to.

Will BB10 be worth the wait? Maybe; RIM claims it has a “rich app system” & “cutting edge multimedia capability”. We’ll see. But I am impressed by at least 4 features demo’d for the new line:

  1. BB Balance: gives users use a firewall separating personal info & work info, yet keeping both secure (the BYOD trend make this feature very relevant);
  2. BB Flow: new user interface lets you keep multiple applications open at once (think Windows or Apple’s iOS)
  3. A Learning Keyboard- eager to see how well it works!
  4. A Smarter Camera (a ‘time machine’ helps you easily find a better shot than the one you actually took)

 

The good news? RIM makes smartphones and has the patents to do so in a conflict-free way. And the smartphone market is growing! In fact,this past quarter, mobile phone sales worldwide fell -3% year to year, while smartphones grew by almost 50% (Gartner)

The bad news? In a fragmented market, you can’t be all things to all users. You choose your spots. You must cede some segments to competitors.

Apple may hold onto artsy users; Samsung may grab younger users who wish to customize their phone or value its Motion based interface; Sony may attract users who value its world-leading HD Movie & Audio library. Google’s Motorola Razr line’s kevlar coating & 16 hour battery life might draw those using a phone in remote/rough situations- contractors, oil workers, tradespeople.

Pick a niche or two – and lock on! Even Samsung, despite its impressive pace of innovation & number of new phones/ year, can’t possibly hope to hold onto its current market share. Mature markets will fragment -it’s inevitable. Users will demand ever-more specialized bundles of features for the way they use their phone. [Think of the Auto Market when the Model A could grab a huge market share; no single auto has had that kind of market share in decades; the market has matured & fragmented].

What’s yet to come in smartphones? More brand spending. And more Connectivity! Instant, secure connectivity. In fact, lost amidst the attention on BB10 2013, a lil announcement that BBM users can now securely connect on WiFi without using air time.  RIM has BBM; Google has Google Plus; Microsoft has Skype-i.m.o. these will be important growth engines for each firm, esp among work users. And while that happens, watch for Apple, Samsung, etc to ‘up their game’ in Recreational/ Social Connectivity. [and what about the elephant in the room?- the leader in social networking & nonwork connectivity?- facebook! Sitting. Waiting. Evaluating. Planning]

Steven Litt