According to a recent article in the New York Times (“RIM Suffers as Profit Falls 58.7%,”Sept. 15, 2011), Research in Motion (RIM), maker of the BlackBerry smart phone, recently announced disappointing earnings results. The company’s shares lost 19% of their value, and many Wall Street analysts are saying that the future viability of the company is in doubt.

Just a few years ago, RIM was one of the most-admired companies in the mobile phone world. They basically invented the smart phone as we know it today – the BlackBerry was the first phone that also allowed people to check their e-mail, becoming known as the “CrackBerry” for its addictive properties. RIM’s reliable and secure systems made the BlackBerry popular with corporate IT departments, enabling companies to keep their people connected even when away from the office.

But after the iPhone was introduced in 2007, RIM failed to adapt to a fast-changing market. Even though BlackBerry was the first modern smart phone, and RIM basically invented the category of smart phones, most people today probably think of the iPhone as the prototypical smart phone.

Why BlackBerry and RIM are losing their way, and the lessons other companies can learn from RIM’s difficulties:

  • Be proactive, not reactive: RIM got caught flat-footed by the emergence of the iPhone. The iPhone was something new – a smart phone that was more like a computer in your pocket, with a full Web browser and an ever-growing selection of software “apps” to navigate the everyday difficulties of life. BlackBerry was slow to offer a full Web browser capability, and they gradually lost relevance because their phones didn’t offer the same extensive features and apps as the iPhone and Android systems. Once the iPhone came along, suddenly people had the ability to surf the Web, shop online, get directions, buy movie tickets and access specialized content and tools on any conceivable topic, all from their phones: just being able to check e-mail wasn’t enough anymore. But instead of being proactive by innovating and offering something new, BlackBerry merely rolled out updates to its existing product.
  • Focus on your best customers: BlackBerry achieved some of its biggest success in the corporate market. But after Apple introduced the iPad, RIM tried to get into the consumer market for tablet PCs by introducing its PlayBook tablet. The problem for RIM is that the PlayBook is nowhere close to being able to compete with the iPad. The iPad is better for presentations, has a bigger app selection, and is generally setting the standard for what a tablet should be. Instead of rolling out an inferior version of a highly successful tablet geared toward the consumer market (where Apple already had an insurmountable lead), perhaps RIM should have focused more on developing great new products for the corporate market. Too many tech firms try to sell to the common consumers instead of to corporate clients, even when they don’t have the right products and the right message.
  • To stay in first place, you have to innovate: Five years ago, BlackBerry was by far the #1 smart phone in terms of market share. They ran ads with trendy designers, artists and entrepreneurs talking about how much they loved their BlackBerry and how it helped them live a bigger life and be productive on the go. The decline of RIM shows yet another example of how being the first to market doesn’t necessarily lead to lasting dominance. You have to continually innovate, and keep giving your customers something new to be excited about.

I am a BlackBerry user, and in fact I just bought a new BlackBerry Bold, and I like it a lot. So I am not rooting for RIM to fail, by any means. There are still signs of hope for the company – RIM still has over 65 million subscribers and preparing to release a new generation of phones based on its QNX operating system. Perhaps RIM can defy the expectations of analysts and find a way to survive. But ultimately, this story shows the rest of us, especially in the tech sector, how fast the world can change. No company can afford to rest on its laurels or coast along based on its past success. We all need to continually adapt and innovate to make sure our products are relevant to what customers want to buy.

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