First Nokia, Now RIM: The Mighty Are Falling

http://www.wired.com/epicenter/2011/07/rim-mighty-are-falling/

by evo_9 • 15 years ago

54 51 15 years ago

RexRollman2• 15 years ago

To me, they are both victims of a paradigm shift. The only thing that saddens me is that their employees will pay the price for their lack of vision.

VladRussian2• 15 years ago

as a former multi-year employee of a formerly glorious company that fell victim of its self-denial to recognize a paradigm shift i can say that employees can blame only themselves.

aculver• 15 years ago

Yeah, I agree. The parent post makes it sound like there is some other force in a company that can be blamed other than the employees. I suppose someone might say "management", but to me it's all the same.

nkassis• 15 years ago

I'm a little sad for RIM and would like to support a Canadian company but in the end they just aren't able to adapt. I don't think they ever will unless there is a management change. Seriously a tablet that can't receive email Nativity? That's what they were know for yet they can't use there strength right. QNX is a decent system, open it up, let others use it, in the end they won't be able to stop the tsunami of apple and android without help, other manufacturers using their QNX platform could help.

michaelcampbell• 15 years ago

I don't have the deisre to support a Canadian company simply because they're Canadian, but I'm with you on the rest of it. When I heard RIM bought QNX I was ready for a game changer from them, but alas... too little too late. Perhaps it never could have worked; maybe Google with buy the QNX part of RIM and do something with it with respect to Android. I'd like to see it shine someday.

Luyt• 15 years ago

esr also keeps a close eye on the developments in the mobile phone market. His latest blog post on this is at http://esr.ibiblio.org/?p=3493 , a short quote:

"Nokia’s strategy, insofar as it’s actually had one since the tie-up with Microsoft, has been to hang in there on volume sales of dumbphones until it could deliver world-beating WP7 handsets. The major risk here, other than the wild unlikelihood of WP7 ever becoming anything consumers actually want, was that the Chinese electronics industry would undercut them on price-performance. I predicted this would happen, it is happening, and Nokia’s disastrous July earnings call is the result."

othermaciej• 15 years ago

I think esr lost a lot of credibility with his claim that the iPhone was facing imminent collapse, followed by Apple's record quarter. He seems more interested in finding any evidence whatsoever for the proposition that Android will dominate the market, than in doing thoughtful analysis. The post you linked is a case in point. He's also cherry-picking his past predictions to highlight only the ones that turned out to be right.

sedev• 15 years ago

While "keeps a close eye on" is certainly an accurate description of what he does, "makes accurate and/or well-founded predictions" is not, and that's more important. Someone who wanted to be well-informed about mobile would do far better by reading Horace Dediu, for example.

programminggeek• 15 years ago

I don't think I've ever seen a company cut employees en masse like this truly help a company come from behind to regain their former status. It sends so many wrong messages. If those 10% of your company aren't worthwhile, why were they hired and employed in the first place?

If management can afford to cut staff by 10%, the C and VP level management should be fired. Start by cutting at the top, not at the bottom.

Cutting that deep means that management was fine with spending money like drunken sailors. Nothing RIM or Nokia has announced in the last few months in terms of changes has shown that they are going to do anything other than wither and die on the vine.

dsmithn• 15 years ago

I can't disagree with the first two paragraphs, but for the last, what about shutting down entire divisions? If a company invested in a failed product that requires a number of specialized employees, does it imply they were spending money like drunken sailors when they have to let them go?

cpeterso2• 15 years ago

I'm reminded of Steve Job's advice to Nike:

"Nike makes some of the best products in the world. Products that you lust after. But you also make a lot of crap. Just get rid of the crappy stuff and focus on the good stuff."

izend• 15 years ago

"I don't think I've ever seen a company cut employees en masse like this truly help a company come from behind to regain their former status."

Apple?

kenjackson• 15 years ago

http://articles.sfgate.com/1997-03-15/business/17744320_1_ap...

Apple laid off 4000 in 1997. I've heard things went pretty well afterwards.

VladRussian2• 15 years ago

nothing will help these companies. It is time for them to go.

Look at the bright side though - 2000 of mobile developers is relieved from working on dead-end products and ready to be injected into red-hot mobile hiring market to work on the successful mobile products. Its win-win for everybody - the developers, their new companies, consumers.

hello_moto3• 15 years ago

What makes you think that all 2000 are engineers? RIM consists of many departments (IT, Sales, Marketing, R&D). They also have stuff like SAP for their ERP systems. That thing needs a team of developers that don't necessary develop "mobile" software.

From my knowledge, there are competing software/apps within the internal RIM ecosystems itself so these people that got laid off could potentially be the result of internal wars.

For example: software A that was built using the old RIM ecosystems (from the OS, the API, the toolkit, etc) and old mobile paradigms/concepts competes against software B that was built based on the latest web 2.0 + mobile crazed. Perhaps it's time for software A to die. Some companies might just shift these engineers to software B's team while other decided to shut down the whole team (sometime it's not easy to integrate new team members, especially if software B was a result of acquisition).

dfc• 15 years ago

IBM in the 80s? Maybe they did not regain their status as "the computer company," but they certainly carried out quite a turn around.

Perceval• 15 years ago

That was Jack Welch's famous method at GE: fire the bottom 10% of management every year. http://en.wikipedia.org/wiki/Jack_Welch#Tenure_as_CEO_of_GE

andrewcross• 15 years ago

From one of my friends who worked at RIM on a co-op job less than a year ago: "I definitely saw a lot of redundant jobs and am not surprised they're cutting this many".

They were hiring anyone and everyone they could for a while there, so I think this is a good move. Keep the best employees are double down on them.

somebear• 15 years ago

In these situations it's just hard to be sure you are keeping the best employees.

wmeredith• 15 years ago

Their problem is they make phones and no one wants phones, they want computers.

Geee• 15 years ago

That was exactly Nokia's problem, they tried to cram whole computer in a phone. They even called their smartphones 'multimedia computers' and primarily targeted them for geeks. They never had a real idea why smartphones are useful. That strategy led them to huge amounts of code bloat and features without usability and made the development of updates horribly slow.

digikata• 15 years ago

I think that Nokia's problem was they tried to redesign their software stack 3-4 times, never waiting long enough to get a mature enough product with real feedback before ripping things up and starting again. The worst case was the latest switch to WP7, especially after looking at the first (and maybe last) Meego phone release. It's like trying to build a house, getting the framing and walls up and right after you paint it you decide to go to a completely different foundation.

phuff• 15 years ago

I am not fully versed in the notion of innovative disruption, but it seems pretty obvious that a Clay Christensen-esque Innovator's Dilemma disruption is what's going on here: somebody had a decent product, is first to market, but doesn't have a clear enough vision to see how to stay on top and stay innovative and gets blindsided by unexpected (read Apple + Android) competitors. I wonder how closely the non-cliff notes version of RIM's fall matches the innovator's dilemma model.

cpeterso2• 15 years ago

I think RIM and Nokia both had "Cash Cow Disease". The Blackberry and Symbian had been successes for so long that short-term profits/losses and internal politics prevent the companies from investing in new (and seemingly "inferior") technologies that would cannabilize their own successful products. For example, Nokia had touchscreen phones that didn't sell well, so they thought the touchscreen iPhone was a "toy".

mbesto• 15 years ago

RIM in particular continues to have strong financial numbers. But the outlook is bad as the trends are showing decline rather than growth.

The innovator's dilemma really takes a toll on company's who main source of revenue is being disrupted and at the same time have to report to shareholders.

IsaacL2• 15 years ago

The term is 'disruptive innovation'. It's an often misunderstood concept - the key point is that not all innovation is disruptive. The defining feature of disruptive innovations is that they are initially worse than the technology they displace, but as they are significantly cheaper they allow the tech to reach new markets. Since the iPhone was a high-end product, it can't be called disruptive.

MikeCapone3• 15 years ago

"Since the iPhone was a high-end product, it can't be called disruptive."

Do you have a suggestion of what it should be called, then? Sounds disruptive to me.

dasil003• 15 years ago

Why does something have to be cheaper to be disruptive? What if it's the same cost but better? Were automobiles cheaper than horses and buggies?

thinkdisruptive2• 15 years ago

Yes, this is absolutely an example of the disruptor being disrupted. RIM has killed themselves by trying to out-increment features on a handheld email machine all the while ignoring, or failing to perceive as relevant how both iPhone and Android were irreversibly changing the basis of competition.

RIM's only survival strategy is to stop playing catchup with me-too products that the market has already passed, and to offer something different leveraging their proprietary platform if possible, but satisfying and targeting a completely different market need, such as doing mobile social more elegantly or something like that. I'm in process of writing a detailed analysis of RIM's missteps that have enabled disruption, and why their current strategy is pointing them to oblivion. This article is killer for RIM -- only 26% of Blackberry owners plan to get another! http://tiny.cc/iphone5_kills_the_pack

ForrestN• 15 years ago

I would be really interested to read an informed analysis of these two cases in the context of public company shareholder dynamics. I think it's an understated advantage of Steve Job's ultra-centrality at Apple that shareholders tend to defer to him in a way that I expect they might not with other companies (obviously this might become a disadvantage when he leaves). Has pressure from shareholders meaningfully affected the decision-making of companies like Nokia and RIM? Are short-term incentives defeating long-term incentives because of such pressure? I don't know, but I'd love to hear from someone who does.

thematt• 15 years ago

I'm not sure if it's related to their troubles, but their corporate structure has always seemed odd to me. Starting with the whole "co-CEO" role, which seems like an experiment that hasn't quite panned out.

MikeCapone3• 15 years ago

Technically, Google has almost had that for a while with Larry and Sergey, and then the Trifecta with Eric. Not quite the same, though, obviously...

Silhouette• 15 years ago

Wasn't there an open letter from a senior staffer at RIM just a few days ago, which spelt out the problems on the ground and what needed to be done about them in brutally honest fashion, which was promptly brushed under the carpet (or not) by RIM PR? It seems like the rank and file staff at RIM get it, but the top level management don't, which is a sufficient condition to know how the story ends.

Edit: Yes, here it is: http://www.bgr.com/2011/06/30/open-letter-to-blackberry-boss...

eric-hu• 15 years ago

I was thinking of the same thing when I read this. To be fair, one of the letter's suggestions was that they hold people accountable for failed products. Excerpt:

"Just because someone may have been a loyal RIM employee for 7 years, it doesn’t mean they are the best Manager / Director / VP for that role"

...although maybe they're doing the reverse...

ruslan• 15 years ago

QNX ? What for ?

I think RIM should learn from Nokia's mistake and switch to Android soon as possible. This is the only way to survive for them.

hello_moto3• 15 years ago

Wow, CEO of the year for you sir.

If things would be as easy as that, flip to Android and compete with the rest... to the bottom. How would you differentiate yourself vs HTC, Motorola, etc?

What if the Chinese android handsets comes up with cheap mobile phones similar to BB hardware interface (the golden keyboard, you know that BB users love BB because of the keyboard).

Switching to Android makes RIM an average company like everybody else.

cfgvjkljhgfb• 15 years ago

So by the same logic, Porsche and Ferrari should stop making gasoline powered cars with 4wheels in a race to the bottom with kia/hyundai - and switch to 6 wheel cars powered by waterwheels?

InclinedPlane• 15 years ago

It's a perfectly viable strategy. Combine your peanut butter (hardware design, workflow, bb messaging, etc) with proven chocolate (android smartphone technology) and try to make something that preserves the unique qualities your company is known for while keeping pace with the competition on other features (high quality mibile browsers, games, etc.)

I know several people who still use blackberries because they are fundamentally superior for certain business needs. But that's just an extreme corner of the market, ultimately people will make due with other options that are "good enough" in order to take advantage of other benefits.

As far as the lowest common denominator problem, if you think htc, samsung, and motorola are in a race to the bottom then maybe you haven't been paying attention.

MatthewPhillips• 15 years ago

Samsung in on pace to become the #1 seller of phones in the world and the #1 seller of smartphones in the world. I don't have access to their numbers since they're a private company, but from what they report their revenue and profits dwarf that of RIM.

doctoboggan• 15 years ago

Nokia has been a company since 1865, so it might take more than this to stop them

http://en.wikipedia.org/wiki/Nokia

bergie2• 15 years ago

And they've done a lot of amazing turnarounds, from paper mills to rubber boots to cables to TVs to mobile phones. But this is the first time they surrender the decision making power of the company to a third party, Microsoft.

That may make adapting to changing situations harder.

Zachhack• 15 years ago

In tech, there is no such thing as 'too big to fail'

MikeCapone3• 15 years ago

Well, that's what a functioning market where there is competition does. Allow people to pick what they want, and it so happens that what people now want aren't BlackBerries. Both Apple and Google should remember that -- their positions aren't set in stone and to maintain them in the long term they need to avoid resting on their laurels.

brudgers• 15 years ago

While in the short term, Android and iOS are having an impact, RIM's longterm fate is affected by Windows Phone 7 because that is the easiest Mobile OS upon which Enterprise can standardize comfortably - iOS is just too consumer centric [e.g. three year obsolescence] and has a history of sloppy security practices [e.g. lying to Exchange], and Android is somewhat fragmented due to diversity of device capabilities and does not give a high priority to integration with the Microsoft stack.

All the things RIM does well for enterprise, Windows Phone is likely to do better over the long term. And with Nokia getting set to leverage their existing reputation for quality on top of WP7, it is hard to see what RIM can bring to the table when it comes time to convince IT. [http://www.cio.com/article/501815/iPhone_3.1_Breaking_Exchan...]

wmil• 15 years ago

To be fair, every mobile device that Microsoft released was supposed to destroy RIM. I'm still not convinced that Microsoft can pull of a decent phone with full Exchange integration.

First Nokia, Now RIM: The Mighty Are Falling

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