Research in Motion(RIM) announced last month that it will be delaying its upcoming BlackBerry 10 platform to the first quarter of next year(2013). It appear that investors were disappointed with the announcement and that lead to questions(on the delay) considering that BlackBerry is losing market share globally.
On top of that, shares in RIM have fallen by about 95 per cent since mid-2008. And last month, not only did RIM posted a US$518 million quarterly loss, it will be cutting roughly 5,000 employees.
In an exclusive Q&A, CIO.com’s Al Sacco chats with RIM CEO Thorsten Heins(picture) on the current state of BlackBerry and how it fell from grace, what the company is doing to ensure things in Waterloo don’t get worse, and the product delay problems that have plagued RIM.
Check out part of the Q&A below:
Something I hear very often is that RIM “failed to innovate” and that a “lack of innovation” led to the fix that RIM’s now in. Is it that simple? Did RIM fail to innovate?
I would not say that we failed to innovate. RIM is still a very innovative company. BlackBerry 10 will absolutely prove this. I think that the reason is something else. We had a very, very successful recipe of what BlackBerry was all about. There were four main pillars: battery life; typing; security; and compression. Then there was a shift with LTE. With LTE it was important actually not to save network resources, it was important to load the networks, to sell data plans and sell data volume. We didn’t miss on innovation. I think we missed on understanding, specifically in the U.S., that this trend was shifting, and that our positioning and our value proposition in the U.S. market was not following that trend shift.
In your opinion, how significant have product delays been to RIM’s current situation in the market? Why have we seen so many product delays from RIM during the past few years?
Part of it actually goes back to your last question. We are a very innovative company, we were and we are. What sometimes happens is, you get so excited about innovations that you push them into existing development projects. And what I’ve learned in my discipline, in my 25 years in R&D and in telecom, once you have decided on a project, you must keep it stable. With our eagerness to be extremely innovative, we had the tendency to put new stuff into existing project programs, and that is not a recipe to deliver on time and on quality.
We’re dramatically changing this with BlackBerry 10. We’ll continue to innovate, but we have a clear understand of what BlackBerry 10 is all about. And we keep that program very, very focused.
[RIM has delayed the launch of BlackBerry 10 numerous times. Most recently it announced that the first BlackBerry 10 device won't arrive until early 2013. It had previously stated BlackBerry 10 would launch in 2012.]
The delay of BlackBerry 10 is not because we added stuff to it. The delay is because our software groups were actually so successful in coding the various feature components and building blocks that when we put them into the main “trunk line,” as we call it, when we wanted to build the first main release, we got overwhelmed by integration efforts. I had to make a decision. I could actually have kept the schedule, if I had made a sacrifice on quality and on platform stability. And I decided not to do that, because I need to make sure that when we deliver a BlackBerry, it is best quality.
Am I disappointed that we had to shift it into the first quarter? Yes, I am. But the point is, it was a decision between: Rush it out again, and then fix the quality stuff later; or bring it out with high quality. What I commit to the public out there is that when we ship BlackBerry 10, we will do it at high quality. That was the decision I made.
So while RIM may be growing in some geographic areas, it is losing ground overall, and that appears to be related to what’s happening in North America. Can RIM succeed without capturing a larger part of the North American market? Would RIM be content with continued success in smaller markets?
We are North American, we’re a Canadian company, and we want to win in our home market. That’s why we are building BlackBerry 10, so we have a platform and product that actually can compete in the North American market and so we can win market share back. And we will do it.
Talking market share numbers, that was part of the value system I talked about. We are not heavily participating in the full-touch [screen] market yet. There were a few attempts for us to get out there. However, I would be the first one to admit that the success was rather limited. So, one of the big steps we’re taking now to win market share back is to go into the full-touch device market. That is what our first BlackBerry 10 product is about. Then our second product is going to be a QWERTY device, following closely behind that full-touch device. So we need this product to actually enter into the full touch market and then also to go after the BYOD segment in the enterprise as that moves to full touch.
You’re right that market share overall is declining. The reason is the growth is in touch. QWERTY is pretty stable, it’s a stable segment, growing slowly. The growth is in the full touch device business, and that’s where we will see growth. There is a loyal segment of BlackBerry users in the U.S. I think you will see the shrinkage of the BlackBerry market come to a halt. I think we’ve bottomed out on this one. Not that I’m satisfied with it, okay? That’s why I’m building BlackBerry 10 to fight that back.