Fixing RIM's Suicidal Apple Strategy and the Microsoft Mango Opportunity

Rob Enderle
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The outage this week for RIM couldn't have come at a worse time. The new iPhone 4S was ramping to market across a bunch of new carriers and retail outlets and folks were still very upset by Steve Jobs' death and likely to congregate in groups to buy the new phone. Generally, we humans don't like change but can certainly be driven to make one. This is likely why we are seeing long lines to buy the phone today. Even though the phone is being sold in far more places, we have a large-scale feeding frenzy and RIM will undoubtedly be on the wrong side of this event.


Talk about unlucky. Let's spend a moment talking about RIM's collapse, Apple's continued rise and let's toss in a little Windows Phone coverage to round out this Friday.




The issue for RIM is that it is an enterprise vendor in a user-driven world and instead of fighting from a position of strength, defending its keyboard and secure communications approach, it started to chase Apple instead. This created the impression that Apple was leading and, in this case, the impression drove reality and - presto! - Apple was the leader.


First RIM lost its unique advantage and then it was only a matter of time before Apple and Google took its market. RIM had been building for this event for some time and had not protected itself well enough from it.


But what could RIM have done?


RIM's Missed Defense


RIM was under attack, but by a product that was less secure, less reliable, lacked a keyboard and was more fragile. Apple attacking RIM should have been like Toyota trying to displace FMC for military vehicles with a van. RIM was engineered to be the kind of product that businesses needed and all RIM needed to do was remind its users why it was better, much like FMC showed what one hit from a shell would do to a van as opposed to a military-grade troop carrier.


Buyers tend to take their products for granted and when faced with competitive erosion, need to be reminded about what made them choose RIM in the first place. Yes, RIM still would have needed to get the top four or five applications that users wanted (Kindle reader, Netflix, "Angry Birds," etc.) on their device, but that is vastly easier than trying to build an RIM iPhone.


Interestingly, a lot of folks who moved from the BlackBerry to the iPhone secretly didn't like the move at all and missed what the BlackBerry did best; many particularly missed that a BlackBerry would survive a drop and the iPhone often didn't. Had these people been made visible it should have defended RIM's customer base vastly better.


Finally, RIM had one of the most loyal customer bases on the planet, in many ways a rival to the famous Mac users, though smaller. They didn't nurture or give that base voice so the power of it couldn't be brought to bear. The end result was that Apple, and Android largely slipstreaming on Apple, was chewing RIM up long before this week.


RIM's Achilles' Heel


The RIM server, once an advantage, is now RIM's Achilles' heel. Current-generation products connect directly to email servers and the Web and this server ecosystem provides what is now a single point of failure for RIM devices. Not only that, it allowed foreign governments a place to attack to get access to secure messages from businesses and other governments. While it represents a lot of revenue to the company and thus would have been very hard to eliminate much like an arm or leg that gets gangrene, it needed to be lopped off to save the rest of the body. Granted, this is creating an interesting opportunity for firms like IceWarp, which now market their products as RIM server displacement offerings and don't even make phones.


This one offering, unless it can be changed back into an advantage (which seems doubtful), will likely have more to do with RIM's demise than anything Apple or Google can do.


Apple's Vulnerabilities


Apple largely sucks at central services and with Steve Jobs gone, the focus on quality already seems to be drifting. iCloud has been having issues this week and MobileMe was such an embarrassment that Steve Jobs fired the team that created it. Apple doesn't talk to IT buyers well and security (outside of Apple itself) is generally treated like Microsoft did in the 1990s as someone else's problem. Even the iOS 5 rollout has been marred by execution problems. This showcases that every vendor, even Apple, is vulnerable and likely has large numbers of customers who either aren't happy or are borderline. But you have to be prepared to fuel that unhappiness and benefit from it. Apple was with RIM and RIM hasn't been with Apple so far. This suggests there could be an interesting opportunity for Microsoft.


Wrapping Up: Microsoft or Google Opportunity


Google is largely slipstreaming Apple and benefits by providing more device choice, more aggressive pricing and, up until now, far more retail opportunities. However, Android, with the recent legal problems in the U.S. (apparently Google is even suing itself now) and Australia, its market blocked for a time in China, and now evidently the top malware target in its class, increasingly looks like a house of cards and Google will need to fix that or also be vulnerable to erosion. Microsoft has been losing share, but its new Mango platform is competitively compelling and it enjoys a better relationship with corporate buyers than either Apple or Google do. However, it has massively underfunded its smartphone efforts for some time and unless it is willing to change that, it will become another missed opportunity.


In the end, Apple is winning through a combination of great execution (which appears to already be slipping post-Jobs) and the widely held belief that it can't be beaten. Look at Apple's failed server effort and you'll see that even that company can be driven to beat itself and with Jobs out of the picture is more likely to make mistakes. If any competitor can make Apple appear to be beatable, this market will change dramatically. If it doesn't or can't, these competitors likely won't reach their full potential and Apple will continue largely unchallenged.


The real irony today is a lot of folks will be reading this on their new iPhone 4S who otherwise might have been happier doing so on an RIM or Microsoft device if those vendors just stepped up. Then again, if that were the case, this would be a different story.

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