RIM Ponders a Future of Software Licensing

by Jeff Wiener on January 24, 2013

As the much anticipated day of the release of Research in Motion’s long awaited Blackberry 10 OS draws ever closer, I can’t help but wonder about the future of one of Canada’s greatest tech success stories. In fact, just days before Blackberry 10 goes live I find myself thoroughly confused by the company’s own glimpse into its crystal ball, as CEO Thorsten Heins is reporting as saying in an interview published in German paper Die Welt that his company may one day stop producing handset hardware, transitioning into licensing its Blackberry operating system to other manufacturers.

Almost as if taking a page out of Nokia’s old playbook, it truly looks like RIM has shot itself in the foot on the cusp of what is shaping up to be the most important release in the company’s history. It’s a move that has analysts questioning not only the timing of the announcement, but the logic of it as well.

As many are quick to point out, transitioning into licensing would be a monumental paradigm shift for RIM, leading many to ask whether this is the move the struggling company needs to get it back on track, or if this is simply the same desperation we’ve seen from dying companies before?

With the clock ticking down to Blackberry 10 OS release day, Heins has gone on record saying that the future of RIM might be in software licensing, not hardware production. This means that Heins can envision a future where the Blackberry phone would be no more, while the company’s Blackberry 10 OS would continue to live on in other companies…a strange strategy to say the least.

One possibility is that Heins is simply looking to hedge his bets, knowing that even with the strength of Blackberry 10, users have already moved away from Blackberry phones, and they’re likely never to come back. To recapture this bygone Blackberry love, perhaps RIM’s only course is to attempt to put its OS onto more popular brands, leaving its iconic business oriented smartphone behind forever.

There is a second possibility, however, and I truly hope it is closer to the truth. As many NHL players recently discovered as they spent the lockout playing overseas, its that international media are great at fishing for stories, and even better at misrepresenting innocuous remarks as paradigm shifting (and often controversial) scoops.

To that end, there exists the very real possibility that Heins didn’t mean what he said, at least not in the way the media has made it seem. “It is quite possible that this was a throwaway comment that was taken out of context,” said Ian Fogg, senior principal analyst and head of the IHS mobile sector at IHS iSuppli. “The press are looking for stories about RIM changing strategy, and Heins gave them what they wanted to hear. It wouldn’t surprise me if this was a statement taken out of context.”

But just in case Heins wasn’t taken out of context, would such a shift actually benefit RIM? There are two examples to draw on here; it’s just a question as to which one better represents RIM.

On the one hand you have Google, a company who has established mobile dominance with its Android OS, having largely stayed away from the hardware side of the business. On the other hand you have a company like Palm who, in a last ditch effort, tried to transition into a software licensing company…it failed miserably. While I don’t want to say, I continue to think that RIM resembles the latter, a struggling firm desperately looking at Hail Mary options for the future…never a good way to do business.

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The End is Near for Blackberry — TheTelecomBlog.com
September 23, 2013 at 8:02 am

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