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BlackBerry maker Research In Motion has a message to deliver.
RIM has delayed the release of BlackBerry 10, its save-the-company product; is poised to let go of 5,000 employees, reducing its staff by nearly a third; has hired advisers who may suggest the company split into two, if not sell off an important component of its brand; and on June 28 announced quarterly losses of $518 million. Still, the Ontario-based company firmly believes it will successfully emerge from this tough transition, said Peter Devenyi, RIMs senior vice president of enterprise software.
Devenyi spoke with eWEEK July 5, answering questions but above all insisting that morale was high and the companys outlook bright. Days earlier, CEO Thorsten Heins did the same on a Canadian radio program.
The level of commitment that exists within this company, to see us through, is strong and truly inspiring, Devenyi told eWEEK. As we see and talk to the employees ¦ there’s tremendous confidence that exists within RIM that we will succeed in getting through this transition.
Devenyi added that if one has to go through such a transition, its nice to do so with $2 billion in cash, no debt and as the No. 1 smartphone brand in many countries around the world.
Given the delay of BlackBerry 10which Devenyi and Heins have been quick to point out is not simply a new smartphone or operating system upgrade, but an entirely new platformHeins has said that RIM is encouraging enterprise customers, many of whom are still using BlackBerry 5 and 6 devices, to upgrade to BlackBerry 7though these devices will not be upgradeable to BlackBerry 10. Is such advice not sending them down a dead-end path?
Devenyi said that the Bold 9900 and other BlackBerry 7 devices are fantastic devices.
The capabilities we bring with BlackBerry 7including BlackBerry Balance in the BYOD [bring-your-own-device] market, including the liquid graphics capabilities, the speed, the new browserit is a remarkable advance over some of the older BlackBerry devices. … As [enterprise customers] see them and use them, it doesn’t take much to get them to upgrade, Devenyi added.
RIMs Devenyi Praises BlackBerry 7, BlackBerry 10
No doubt, BlackBerry 10 will be a whole new level for the future, yet BlackBerry 7 is a tremendous advancement and a competitive device that’s still viewed as far and away the No. 1 device out there for use within the enterprise.
Analysts, to a degree, have been inclined to agree with such statements.
The BlackBerry 7 devices still are among the best for those who want a touch-typeable keyboard and very granular control over email, combined with good security, said Ken Dulaney, an analyst with Gartner who looks at the mobile enterprise market.
Still, regarding RIMs push of the devices ahead of its BlackBerry 10 launch, Dulaney couched his remarks by saying that if one were planning on switching to a touch-screen device, there would be no way to justify the purchase of a new BlackBerry 7 device today.
In recent weeks, RIM CEO Heins has several times referred to RIM moving into mobile computing. What exactly does this refer to?
Devenyi explained that this refers to RIM’s building a complete end-to-end platformnot just a platform on which two people can communicate, but one that anticipates a future with new devices and new ways of communicating.
RIM Aims to Build a Complete End-to-End Platform
For example, QNX, as a core OS, is found in at least 200 makes of vehicles that are out there, he said. The way in which we communicate with our cars, the way in which we communicate with other embedded devices that are out there, will change dramatically. So when we talk about building a mobile computing platform, it goes beyond traditional device-to-device communications but is really an entire new ecosystem of connected machines.
One of these, Devenyi added, will be a mobile computing device that you carry aroundbut it will extend well beyond that.
During RIMs earnings call, Heins said that on top of a solid mobile-device-management offering, RIM plans to build services that are value-added for our customers and generate incremental revenue for the company. Could Devenyi expand on this?
We continue to invest extremely heavily in Mobile Fusion, so some of the capabilities that will be coming out from a Mobile Fusion perspective will include bringing Mobile Fusion to the cloudso that one does not need to deploy Mobile Fusion on premise, for certain corporationsand adding a new level of security to non-BlackBerry devices, so that you can better manage those devices and secure the enterprise content on those devices, said Devenyi.
BYOD is another area on which RIM is heavily focused, he said. RIMs goal is to appeal to the widest community possible, supporting both BYOD and corporate-owned devices in companies of all sizes. BlackBerry Mobile Fusion is all about providing that effective, easy-to-manage single pane of glass that can manage any device as securely as possible. That said, Devenyi added, We firmly believe that there will always be some unique capabilities that differentiate BlackBerry devices from competitive devices.
There have been rumors that RIM may be advised to split its handset business from its services business. Neil Mawston, executive director of the global wireless practice at Strategy Analytics, said that additional delays to the BlackBerry 10 platform have made it probable that RIM will have to seek a white-knight partner.
Mawston suggested that a merger with Microsoft, Facebook, Amazon, Google or even a private equity firm could save the company. However, he added that, with RIM still in a state of decline, many will be wary of trying to catch a falling knife.
With all the uncertainty, what message does RIM have for enterprise customers that may be understandably nervous?
We have almost a quarter million BlackBerry enterprise servers in the world, and over 90 percent of the Fortune 500 are active BlackBerry customers. We are absolutely committed as an organization to supporting the continuing needs of what is a very important customer base to us, said Devenyi.
We are very, very confident that we are going to get through this difficult transition a stronger company and offering a continued set of critical services to this loyal customer base that we have, and we intend to continue to serve them well and make sure the service they receive from us is top-notch and that we take them to a whole new level of capability as we introduce BlackBerry 10.
At BlackBerry World 2012 in May, RIM showed off a very early version of a new device that will run BlackBerry 10the Alpha Devwhich it gave to developers to work with. Immediately afterward, reports emerged that RIM was abandoning its physical keyboard. Will the first BlackBerry 10 smartphones be a mixture of devices with and without physical keyboards?
Indeed, said Devenyi, RIM will be releasing BlackBerry 10 devices that are both pure touch-screen devices and BlackBerry keyboard devices, and both will be available in 2013. ¦ The keyboard devices will be available shortly after the touch-screen devices are available.
Understanding that BlackBerry 10 is a complete platform, the smartphones that run on it will, no doubt, be critical to its success. RIM has, in the past, promised big but delivered devices that failed to truly intrigue consumers, as devices like Apples iPhone and Samsungs Galaxy S III have. Is RIMs design team the same? Is the company confident its going to release devices that will undoubtedly wow the world?
One Analyst Sees a Glass Half Full for RIM
BlackBerry 10 is fantastic, said Devenyi. RIMs design team has evolved with new acquisitions and new hires, he added. The design team is world class that’s working on this device.
Analyst Ken Hyers, with Technology Business Research, said he expects someone of Devenyis position to say nothing less. And I hope that its all true, he added.
While Devenyi has certainly been tasked with putting a positive spin on RIMs current situation, neither is he off base, Hyers suggested.
The company retains a base of customers across Fortune 500 companies, it has a not inconsiderable cash hoard, and it has made some hard decisions around layoffs which will reduce expenses and help it through this rough patch. Looking at the situation as a glass half full, I dont think this is necessarily the end for RIM, said Hyers.
If they can get BlackBerry 10 devices to market in volume by 1Q13, they still have time to retain a portion of their enterprise customers, he added. They can still remain the gold standard for secure mobile email. They will also be able to provide secure mobile application support at a level unmatched by Android products. But I dont expect them to regain their past level of success.
Hyers added, however, that a false move could tip over the glass.
If RIM misses another target for getting BlackBerry 10 to market, or if expenses run higher than they have projected, or if they see an acceleration in the rate of customer losses in the second half of 2012, he said, then I expect theyll be forced to reconsider the hard decisions that theyve already explored and sell off the company and its assets.
Devenyi, closing the conversation, repeated, I can tell you BlackBerry 10 is fantastic. ¦ We are so confident that we have something very different, very unique. We just are not willing to release this to market until it is ready and it has the level of quality that we know everyone expects and deserves.
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