Will RIM Mirror Palm’s Downfall?

by Jeff Wiener on September 16, 2010

If trends in the mobile market continue, we may be seeing the beginning of the end for Research in Motion (RIM). Sure the Canadian mobile giant is still cranking out phones that people around the world continue to greedily scoop up, but there’s a problem in RIM’s mobile strategy, it has no plans for the future.

Imagine being on top of the mobile world, your devices the talk of the town, your innovative operating system the envy of other handheld devices, your shareholders rolling in money, your sizeable market share the target for your competitors.  Life seems pretty good up there, doesn’t it? This is exactly where RIM currently finds itself, and it’s exactly where former mobile giant Palm found itself not too long ago. But even with RIM in a similar situation as Palm, perhaps things will end differently this time.

Sorry folks, I wouldn’t bank on it.

The problem with RIM is simple, while its products are selling overseas, its North American sales have slumped significantly in the face of competition from the iPhone and the various Android smartphones; and if watching market trends over the past year has taught me anything, it’s that, like it or not, other countries like to copy America, especially when it comes to their choices in smartphones.

As Dan Frommer from the Business Insider insightfully wrote, one needs only to glance at the tragic downfall of Palm to see the glaring similarities with RIM’s current slide. Sure RIM is selling phones, but so did Palm not so long ago. The problem for RIM, as it was for Palm, is that the smartphone market is taking off and the Blackberry, even the newest iterations of the device, simply doesn’t look so hot in comparison. What this means is that RIM will quickly become a niche device producer, “forced to become a lower-margin, low-end player,” and simply put, “that’s not what RIM investors have in mind for the company.”

For Palm the story was tragic yet inevitable. Once the darling of the mobile world, producing some of the first handheld quality PDAs and cellphones, the company had no response for the arrival of Apple’s iPhone and while attempts were made along the way to answer the iPhone, Palm was simply not able.

Flash forward to today, where even RIM’s latest Blackberry, the Torch, has been met with lackluster sales and waning enthusiasm. The technophiles of the world just aren’t interested in RIM anymore, and that means the lingering interest of the general public will shortly follow.

But will it be possible for RIM to avoid this disastrous fate? Perhaps, but only if they make some sweeping changes. As Frommer suggests, why not integrate Android into the next line of Blackberries, syncing the companies secure email encryption with an operating system that has significant cache in the market? Perhaps look at replacing the top-end management that got RIM into this hold to begin with, no sense in keeping the old class of people around if the whole company is circling the drain. Finally, perhaps think of selling when there are several wealthy suitors—such as Microsoft—looking to make inroads into the mobile world.

But wait a minute, I think I’ve heard these strategies before. Oh ya! Palm tried them all and ended up failing anyways…so maybe it’s already too late for RIM.

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