Can RIM Stay Relevant?

The BlackBerry has enjoyed a dominant position in the enterprise and even garnered quite a following from consumers, but those consumers are moving on to greener pastures. They are snatching up iPhones and Android devices and taking them into the office where IT will hook them up with the corporate email server.

That infringes on RIM's turf. The BlackBerry supports an incredible number of policies allowing total control over the device, but most companies don't need that much control. Other smartphones support enough of the key Microsoft Exchange policies to keep data safe. Remote wipe, remote lock, PIN enforcement, and a few others are sufficient. It is all the better if the employee is willing to buy the device with their own money and ask to get corporate email on it.

RIM has to compete then on end user features. The reality is that BlackBerry is way behind the competition. It is similar to where Palm was by 2004. Palm ruled the PDA market but the operating system was tired. Palm tried to move to Palm OS6, also known as Cobalt, but that was a dismal failure. They regrouped and came out with webOS in 2009. That didn't turn things around for Palm though. Within nine months of its launch, Palm sold itself to HP, where webOS continues to struggle in the market.

RIM will have to do a similar rebirth with its smartphone line. BlackBerry 6 OS was released last fall but has failed to do anything to turn around RIM's fortunes. The Playbook is coming out this year and has a completely new operating system called QNX. That will ultimately make it to the smartphone line, putting the final nail in the coffin of the current BlackBerry platform.

This transition won't be easy though. It never is. Palm failed at it. Nokia also abandoned its plans to replace Symbian with Meego, having chosen Windows Phone instead. Ironically, Microsoft has had lukewarm success with its own rebirth having just left Windows Mobile behind.

RIM doesn't seem to really understand the predicament it is in though. Either that, or it is just putting on a brave face. Co-CEO Mike Lazarids spoke to the New York Times and said:

"Why is it that people don't appreciate our profits? Why is it that people don't appreciate our growth? Why is it that people don't appreciate the fact that we spent the last four years going global? Why is it that people don't appreciate that we have 500 carriers in 170 countries with products in almost 30 languages? I don't fully understand why there's this negative sentiment, and I just don't have the time to battle it. Because in the end, what I've learned is you've just got to prove it over and over and over."

The problem is the negative sentiment has a basis in reality. RIM's share is decreasing. Yes, sales are rising, but not as fast as those of iOS and Android. On top of that, two analysts are projecting Windows Phone, with the help of Nokia, will vault to the number two slot. That means RIM is fourth at best.

It has its work cut out for it. The PlayBook has the potential to be important, but if RIM is betting the future on its success, it is the wrong bet. For the foreseeable future, the smartphone market will remain far larger than the tablet market, and that is where RIM needs to inject some new life.