RIM is cutting 2,000 jobs and reshuffling its executive deck, but the BlackBerry maker will need some radical innovation if it wants to survive its current struggles.
Research In Motion will shed around 2,000 employees this
week, in yet another indicator of the company's battered state.
"The workforce reduction is believed to be a prudent and
necessary step for the long term success of the company," read RIM's July 25
statement on the matter, "and it follows an extended period of rapid growth
within the company whereby the workforce had nearly quadrupled in the last five
RIM co-CEO Jim Balsillie suggested during RIM's June
earnings call that his company would lay off employees and start a
"streamlining of operations" to make the company more efficient. From that
point, it became a question of when the axe would fall, and how deeply it would
cut. RIM is also engaging in a corporate shuffle, with a handful of executives
taking either changed or expanded roles.
For the three-month period between the end of February and
the end of May, research firm comScore estimated RIM's U.S. share as dipping
from 28.9 percent to 24.7 percent, even as Google's Android platform rose from
33 percent to 38.1 percent, and Apple enjoyed a slight uptick from 25.2 percent
to 26.6 percent. For the first quarter of fiscal 2012, RIM earned some $4.9
billion in revenue-down 12 percent from the previous quarter, and aggravated by
a decline in net income.
With RIM's smartphone market share
plunging, analysts and investors have been questioning-ever more loudly-whether
the company's grand strategy and executive structure can guarantee its
survival. Indeed, even RIM's executives have acknowledged at several points
that RIM is undergoing a particularly turbulent period in its long history. At
the same time, those execs insist their company will pull through.
RIM's current challenge is updating its aging BlackBerry
portfolio, which faces serious competition from Apple's iPhone and the ranks of
ever-more-advanced Google Android devices. Those rival devices are also
enjoying increased adoption by the business community, traditionally RIM's
To that end, RIM's plan involves introducing a set of
"superphones" based on its QNX operating system, which currently powers the
company's PlayBook tablet. However, those devises aren't widely expected to
reach store shelves before the second half of 2012, requiring RIM to rely on
the BlackBerry OS 7 and upcoming hardware such as the BlackBerry Bold 9900 and
9930, which were unveiled during May's BlackBerry World conference.
Those devices failed to excite analysts and mobile experts
who expected the company to attempt something more radical. Ultimately, RIM
won't be saved by "streamlining" alone-if it wants to navigate these rocky
straits, it'll need a device portfolio capable of exciting its customer base.
And with precious few details leaking about those "superphones," whether RIM
can achieve such sweeping innovation remains the question of the
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Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.