RIM to refocus on enterprise, says CEO
Research In Motion CEO Thorsten Heins has outlined a strategic overhaul of the Canadian device vendor aimed at refocusing the company on its enterprise service roots. But he conceded simultaneously that many of the firm’s traditional strengths are no longer valued as highly as they once were by its customer base.
Speaking on March 29th as part of the firm’s earnings update, Heins—who became CEO at the end of January this year—said that he had spent the last ten weeks conducting a “personal reality check” on the business, concluding that “substantial change is what RIM needs”.
Heins conceded, as many observers have noted, that RIM’s attempts to drive adoption outside of the core enterprise segment in which it achieved its success had seen the company spread itself too thinly. “Blackberry cannot succeed if we try to be everybody’s darling, and all things to all people,” he said.
RIM was caught napping by the BYOD (bring your own device) trend that has seen enterprise users looking to access enterprise services from their personal device. Heins said that the firm had seen “significant slowdown in our enterprise subscription growth rate as a result.” Nonetheless he maintained that the firm retains a leading position in the enterprise market which can be capitalised on with a renewed focus on the corporate segment.
The upcoming Blackberry Fusion platform will enable enterprise customer to manage iOS and Android devices as well as its own handsets, he said.
Contrary to a number of reports that followed the RIM earnings call, suggesting that the firm would withdraw from the consumer space altogether, Heins voiced the need for a “compelling consumer offering” from Blackberry. But he stressed that the firm would look to partner for content and consumer features, such as media consumption, rather than develop the functionality in-house.
He also sounded the death knell for the consumer VAS business that the firm has attempted to build through acquisition, saying that it would be “extremely difficult to make it profitable” and that the “heavy ongoing investment does not make sense given our market position.”
Heins said that the upcoming Blackberry 10 handsets and platform would address some of its product shortcomings, particularly in the US where it has lost ground. He also pledged to “aggressively incentivise” Blackberry 7 products in the meantime, in a bid to win customers upgrading from older Blackberry devices, or moving into the smartphone market for the first time.
Most worrying for RIM, though, is Heins’ admission that the roots to which he wants to return the company may be significantly weakened. “We have to realise that some of Blackberry’s traditional strengths of security, push and efficiency are not as highly valued by some customers,” he said.
He added that the firm is working to identify new ways to create value, but offered no indication as to what these might be.
Hein’s opening assertion that significant change is needed cannot be challenged. But if it is not clear what shape that change will take then the firm’s future remains shrouded in uncertainty. This uncertainly was underlined by Heins’ announcement that the firm will offer no guidance on specific quantitative indicators for the rest of fiscal 2013.
RIM’s revenue for the fourth quarter of fiscal 2012 was US$4.2bn, down 19 per cent sequentially, and 25 per cent year on year. The firm shipped 11.1 million smartphones in the three month period, down 21 per cent on the previous quarter.