Research in Motion: What Lies Ahead?
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Case Details:
Case Code : ECON039
Case Length : 13 Pages
Period : 2012
Pub. Date : 2013
Teaching Note :Available
Organization : --
Industry : Smartphones
Countries : North America; Global
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"It’s possible for them to pull it off, but they need to be much faster and much more flexible than they’ve been. They have a great email smartphone. The problem is that to people using smartphones, that’s a given. RIM should have taken notice."
- Alkesh Shah (Shah), Analyst at Evercore Partners in August 2011.
"We now believe that RIM needs to adopt an existing ecosystem (Windows Phone) in order to remain a relevant player in the smartphone market.
- Evercore Partners in December 2011.
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On January 23, 2012, the co-CEOs and co-chairmen of Research in Motion Limited (RIM), Mike Lazaridis (Mike) and Jim Balsillie (Jim), resigned from their posts. Their exit was attributed to investor pressure that followed a long dismal performance by RIM. Mike and Jim were replaced by RIM’s COO Thorsten Heins (Heins) as the new CEO. The market performance of RIM, which had been one of the leading players, started to decline since the year 2010 due to competition from new entrants. Several new players had entered into the market and there was a shift in consumer preference toward them.
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Many customers preferred the new operating systems that the new players offered on their devices as they had better multimedia features. RIM’s BlackBerry range of smart phones, which had traditionally been targeted at business customers, did not offer the same multimedia features. Many companies too started to shift away from RIM with their employees demanding more multimedia features on their smartphones. The BlackBerry devices did not provide a good internet experience to its customers either as they had only a limited number of applications available for them. The high cost of data access on BlackBerry devices too made many companies decide to adopt other smartphones in the place of BlackBerry devices.
Due to the sudden increase in the demand for touch-enabled tablet computers, BlackBerry released a new tablet computer called the ‘BlackBerry PlayBook’ (PlayBook) in April 2011. Like its range of smart phones, PlayBook too was targeted at professionals and provided access to corporate mail, calendar, and memos with a high level of data security. Despite initial euphoria in the market, the PlayBook proved to be a great disappointment. Analysts attributed its failure to RIM’s improper planning and poor marketing strategies. The failure of the PlayBook further tarnished the image of RIM in the market and led to a steep fall in its stock price. In December 2011, RIM announced that the new version of the operating system for its BlackBerry smartphones called BlackBerry Operating System 10 (BBOS 10) would be delayed till the second half of 2012. Some analysts said that it might be too late for RIM to recover its market share and that it should adopt a third party mobile operating system like the Windows Phone for its smartphones. RIM’s future hung in the balance with some activist investors calling for more changes in the top level management to bring some fresh ideas into the company.
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