Annus Horribilus

It has been quite a year for RIM, Research in Motion, the Canadian company that brought the world, and more particularly, the business world, the Blackberry. It is a year however, that the company would probably like to forget. The success of the other mobile fruit company, Apple, at the top end of the market and the proliferation of Android phones at all levels, has meant that RIM has been struggling to keep its customers particularly in the United States. Sales of their  better known models, the Curve, the Bold, the Torch are tailing off despite the introduction of both  a new OS and more up to date features. In 2010 their 8520 model topped the market in France and there was similar success elsewhere in the World, yet this last year, a string of problems has dogged the Canadian company, problems that have only exacerbated RIMs  fundamental vulnerability. ( For more details read Michael Mace’s perceptive article in Mobile Opportunity)

In its attempt to play catch up with Apple, Blackberry launched its own tablet, the Playbook, in April 2011. While not a complete failure, the plethora of  iPad wannabes  has made it difficult for the Playbook to stand out from the crowd. Added to that is the ‘unfinished‘ proprietary operating system which even lacks a native email function and calendar, somewhat surprising from a company whose claim to fame rests upon its secure  email and messaging features! And while numbers are not the only criteria, there are precious few applications available in the BB app store, compared with say even the most basic Android offering. By the end of the year however improvements to the OS added the missing elements and more interestingly, moved towards compatibility with Android applications which could open up a number of possibilities for the tablet.

All the same, some analysts believe that the lack of essential business tools at the launch of the tablet is symptomatic of  RIMs failure to adapt to its changing customer base and has meant that it is not only struggling to attract new clients but also failing to keep existing ones.

Let’s shoot the messenger

On the phone front the excellent and free BBX messaging service, available as standard, has been a veritable hit with users unwilling to pay for texting and wanting a real keyboard on a solidly built phone. These people are of course not necessarily business users but more and more often the youth of a great many different countries around the world. A more fickle customer to please certainly but ironically, not likely to be a tablet buyer either.  Getting back to to RIMs messaging service, it has the particularity of transmitting data in encrypted form directly to RIM servers, which provides an acceptable level of data security for businesses all around the world.  A RIM spokesman has even boasted that,

The Blackberry security architecture for enterprise customers is purposefully designed to exclude the capability for Research in Motion (RIM) or any third party to read encrypted information under any circumstances

This coveted service has however also attracted the attention of state security services all around the world because it is inaccessible to local authorities. The India authorities have been reluctant about the spread of Blackberry use in the country. Things came to head in August 2010 when both the United Arab Emirates and Saudi Arabia  threatened to ban Blackberries if the authorities were not allowed access to the content carried on messaging services. Already the previous year Etisalat, the UAE telecommunications provider, had caused widespread disruption to its own network by introducing a ‘service enhancement’ that was suspected to be an attempt to enable unauthorised access to user information. Nevertheless before the ban was to come into place an agreement was reached and it was generally assumed that Blackberry had cooperated with the request of the authorities over access.

Companies are not the only interested groups when it comes to having secure communications as RIM was to find out to its cost during the UK riots of August 2011. Politicians and other commentators pointed the finger at posts on social media sites like Twitter and Facebook which may have contributed to the ‘organisation’ of the riots, by indicating where they were taking place. Because of the popularity of Blackberries with the UK youth culture, (according to OFCOM, 37% of 16 – 24 year olds in the UK own a BlackBerry), RIMs secure messaging service once more came under scrutiny by the authorities. Were the rioters organised by group SMS postings? Once more RIM agreed to cooperate with the authorities (as they are obliged to under UK law) which led to RIMs inside blog being hacked by an activist group called Team Poison. As yet, no arrests have been made directly as a result of sms or social media information. Indeed some argue that social media provided useful information to the authorities which may have prevented even more damage.

From bad to worse.

The autumn of 2011 brought no respite for RIM. September was marked by the publication of a damning report from Jaguar Finance, a Canadian investment bank, cataloguing  a number of strategic errors that the company had made and were continuing to make under the leadership of James Balsillie and Mike Lazaridis the company’s founders. October saw a major network failure which affected not only Europe the Middle East and Africa but also South America. A poorly managed information campaign did more harm than good and the share price which had been at $69 at the beginning of the year fell to under $20. In the light of such a  dismal performance it was no surprise that in January 2012 the co-founders resigned and the future of the company that was once a clear market leader is increasingly in doubt.