How to fix BlackBerry

Two mobile phone manufacturers have taken a battering in recent years. Both were disrupted by the smartphone explosion that began in 2007. Neither saw it coming. One turned its situation around, while the other is still in trouble.

BlackBerry has been repeatedly pounded by a cynical press, pessimistic analysts and disgruntled investors.

Simon Dingle, contributor, ITWeb

Research In Motion (RIM) and its BlackBerry platform are under fire from analysts, investors, customers and the media. Amid diminishing market capitalisation and poor returns, the company's joint-CEOs have stepped down. The new guy has his job cut out for him. And I have some advice.

BlackBerry's difficulty is ostensibly at two levels. RIM has a product problem and has had trouble keeping pace with Google's Android and Apple's iOS operating systems - the two dominant players in the smartphone arena. Innovation hasn't come fast enough. Customers wanted more.

The other issue is one of perception. BlackBerry sales were strong, especially in emerging markets, during the first phase of its downturn. But then the market started biting.

Analysts began spewing criticism, echoed by the media. Investors were next in line to express their doubt. This started a speculation snowball that has been rolling downhill ever since. BlackBerry has been repeatedly pounded by a cynical press, pessimistic analysts and disgruntled investors.

Did it deserve the punishment? Absolutely. But only in the beginning.

At this point, I must elaborate on the analogy with Finnish manufacturer Nokia, which is currently staging an impressive comeback.

When Nokia and BlackBerry hit the skids, and investors started demanding answers, Nokia's board took action. CEO Olli-Pekka Kallasvuo - known as 'OPK' in the industry - was ousted. A new CEO was brought in. Stephen Elop, who left Microsoft to take the helm, wasted no time in getting to work.

Research In Motion, meanwhile, got defensive. Its two CEOs, Mike Lazaridis and Jim Balsillie, clung to their positions. Lazaridis, who founded the company, was not going to be removed without a considerable fight.

At Nokia, Elop announced a switch in platforms. He said Nokia had considered Android and other alternatives, and decided to partner with Microsoft to create a new range of smartphones based on the Windows Phone operating system. By making rapid changes and switching direction, Elop masterfully handled the all-important perceptions that swing markets.

Investors were calling for change and Nokia delivered. Of course, it would have to back up the new strategy with confidence-invoking products, but the light at the end of the tunnel was lit. At Nokia World, in October 2011, Elop delivered. The new Lumia range of smartphones was unveiled, along with the Asha line developed to captivate aspirational consumers in emerging markets.

The Lumia range has now arrived in SA to critical acclaim, and Nokia is looking fighting fit.

BlackBerry, meanwhile, stuck to its guns. The company insisted that its platform, embedded with telecommunications networks, still had value. Instead of change, BlackBerry delivered more of the same.

And it wasn't entirely wrong.

The BlackBerry platform needed a lot of work to catch up with its competitors, but it has made solid progress.

The PlayBook, Research In Motion's tablet computer, is an awesome product. It's one of the best tablet platforms I've used on a hardware and operating system level.

The problem with the PlayBook was not the product as such, but the execution. It was released without a standalone e-mail client or calendaring application. The software development kit that would allow third-parties to develop applications for the platform was delayed and released far too late.

The smartphone and tablet world revolves around apps, and PlayBook users had no Angry Birds, no Evernote, no Kindle and no Twitter - the list goes on. Now, finally, those killer apps are starting to appear. But they're very late.

On the smartphone side, BlackBerry has fallen short in both product and execution, but it has produced a decent trajectory. The next generation of phones, based on the same QNX platform that forms the basis of the Tablet OS of the PlayBook, will finally deliver what the market has been calling for. But, again, late.

So Thorsten Heins, the new CEO of RIM, has a major challenge in the perception department. The former CEOs are gone, but Heins has said he doesn't intend to change product strategy. And I agree with him - but unfortunately, the naysayers will torch that decision.

Heins can prove them wrong and swing the market if his next big product move has a surprise. Something unexpected that says: “We're still BlackBerry, but we understand you now.”

And content would be a good place to look for that surprise. There are users all over the world, especially outside of the UK and Europe, calling out for a content provider that makes digital media available to them.

He also has something that no other manufacturer or provider has - infrastructure embedded with telecommunications networks and a more sophisticated relationship with operators.

When I interviewed former co-CEO Jim Balsillie, before things really started falling apart, he stated: “We've hitched our cart to the networks.”

Those networks just might be Heins' biggest allies. For years the cellular networks have been trying to maintain relevance in the consumer market. They've attempted content portals, their own app stores and numerous other ploys to prevent being just plumbing.

Perhaps BlackBerry has something to offer in that department. Its infrastructure makes the platform more intrinsically coupled to the network than the iPhone, Android or other devices. RIM is in a position to deliver content in a way that no one else can.

If I was Heins, I would be speaking to my fellow CEOs at AT&T, Vodafone, China Mobile and others. I'd be offering them a willingness to redefine the smartphone space. To put embedded RIM infrastructure to new use. To stay ahead of the curve in terms of cost and services. To invent the definitive model for content services that blows away the competition because it's delivered on-net.

If RIM can come up with a wow-inspiring new product - which, by all accounts, the new QNX-based devices will be - combined with a surprise in the content department and a fresh partnership with networks for enhanced services, then Heins will be on a winning ticket and BlackBerry may stage a legendary comeback. And who'd be laughing then?