Forget “Dim Sum”; Think “RIM Dumb!”

Anyone who thinks that being a giant, THE giant, in your market makes you safe needs to be looking at RIM this morning.  The fabled Blackberry vendor has sunk to a loss, replaced its CEO, and is clearly in a world of hurt, and the reason is that it forgot the simplest rule; which is that you have to be leading in the OPPORTUNITY space rather than in SALES or in the BASE to be even slightly safe.  Now they’re giving up on the consumer market at the time when BYOD makes it clear that there’s probably no other market left.

When a vendor ships 80% of the units sold, they don’t have the market locked up, because the majority of prospective buyers may not have purchased anything yet.  What Apple did in smartphones was to expand the total addressable market (TAM), and do so radically by including virtually every phone user in the new definition.  They then gained a big lead in that new and broader market, which was bad enough.  What was worse was that once consumers could get their own smartphones they wanted to use them for business rather than carry two phones.  Thus, BYOD.

What makes RIM’s move to focus on its roots idiotic is that its roots have been eaten already, and the trend that’s eating them is the trend it’s fleeing.  There is no chance of success in any market that’s shared by consumers and business other than to be successful on the consumer side.  We proved that in PCs, and we’re proving it in smartphones, in tablets.  You think RIM has fallen on bad times?  Just wait.

Google is facing the Apple demon too, and a bit differently.  In the smartphone space the Android handset partnership strategy worked well, and Google has managed to take the top spot, even if it’s collectively rather than for a single device/model.  In tablets that’s not working out as well for Google, in no small part because the vendors aren’t keeping their devices up to speed in Android releases.  Google has decided that it’s going to sell tablets, and obviously it will have tablets to sell from MMI at the least, though other vendors are mentioned in the early report.  I think what’s happening here is simple; Google knows that Android can compete with the iPad only if there’s essentially only one Android, and that means getting all the tablet players to do two things; organize their value-add so it can be layered easily onto new releases, and commit to keeping their devices up to the latest release, at least for the core Android.  That’s where the new Android builds are heading, I think.  But to get the tablet players in line, Google has to give them something to fear, like Google stepping in.

You might think that Google would worry about Windows 8 here, but they’re not apparently and they’re probably right not to.  Microsoft was never a marketing company in a real sense.  MS-DOS was a serendipitous success, and from there Microsoft simply exploited early momentum.  They don’t have tablet or phone momentum to support.  Yes, players like AT&T will jump in to “support” Windows phone models, but that’s in large part because they don’t want to see any single standout handset.  If there is one, as the iPhone proved, then you have to cut confiscatory deals with the vendor to carry the device or lose market share to a carrier competitor who does.  The carriers would love to break the device duopoly, but that’s going to be a very hard thing to do given that Windows 8 is the only hope, and that it won’t be out until the fall, at the earliest.  Even then it’s not likely it will be ported to non-Intel devices.

Other incumbents might want to look at RIM’s decision, networking players in particular.  Any major market shift creates new buyers and their activity will at least initially and perhaps perpetually outweigh the old.  Resting on your laurels and lying under them is only a matter of inches.


Leave a Reply