Why RIM Should Cut BlackBerry Losses

RIM is planning to launch its BlackBerry 10 smartphone platform in September 2012, but that is a best-case scenario. If there are any problems in development, that date slips. Even if it launches on time, it won't be smooth sailing for the QNX-based platform. It will be way behind in app development. Should RIM drop it altogether and focus on integrating either Android or Windows Phone into its future handsets?

Peter Rojas at Gdgt thinks so. He argues that the market is now made up of two dominant forces, iOS and Android. This will either be the breakout year for Windows Phone, or it will be the year people talk about putting it out to pasture if sales don't pick up. I think the former is more likely, now that Nokia is launching devices and putting a lot of funding into marketing. A LOT of funding.

Can RIM do the same thing though with BlackBerry 10? There have been two major platform launches in the last three years, webOS and Windows Phone. The former is now dead. HP purchased Palm and webOS in 2010 and, just over a year later, killed off all devices and open-sourced the platform. The potential return wasn't worth the billions HP would have had to spend to make the platform a contender.

It wasn't that webOS wasn't a good platform, it simply didn't have the ecosystem necessary to compete with iOS and Android. Windows Phone has been fighting the same battle since launching in fall 2010--and making little headway. The Nokia partnership, though, appears to be bearing fruit, and the OS has a real chance to become the third major platform.

RIM simply doesn't have the resources to make that happen. BlackBerry 10 won't be a platform substantially better than the competition. The company does make a great keyboard, but not everyone wants a keyboard. Those who do are unlikely to switch from their current smartphone just for that, especially if it means losing most of their apps. The current trend is as more people use smartphones, the worse the problem becomes for RIM.

The reality is though, RIM won't change course. The company has an arrogance about it, at least with the current co-CEOs in place. Five years ago, that confidence was well justified. It had the best overall email solution for companies, one that was so popular it won over a lot of consumers as well. Today things are different. Everyone supports Exchange ActiveSync for push email, which is a secure solution and requires no extra hardware or software in the IT department. IT departments today not only welcome, but often recommend the iPhone or an Android device. Consumers moved to modern touchscreen devices years ago.

Watching RIM is eerily similar to watching Palm over the last decade. Both created a market and then dominated in it, both continued to ship an aging platform way past its prime, and both took too long to come out with a replacement. All that is left to finish the tale is for RIM to be acquired, then abandoned.

That is more likely to occur than you might think if RIM forges ahead with its current plans.