RIM's QNX platform is used on 60 per cent of cars on the road

There are great opportunities in the Machine to Machine sector, largely due to the sheer volume of devices expected to be connected to the Internet of Things. The Telematics market is the longest-standing and most mature part of the M2M industry and has been a test bed for the design of more robust, reliable and longer-lasting components.

The fact that Google has just acquired the first-ever self-driving car licence should come as no surprise. Yet a surprise participant that could make a huge impact on the market is Canadian Blackberry maker RIM, which could see its software development offset poor performance in the handset and tablet space.

RIM’s QNX platform is used in 60 per cent of cars currently on the road, the firm revealed at its BlackBerry World event earlier this month, and according to Jamie Moss, senior analyst at Informa Telecoms and Media, the firm already has the expertise required to develop a strong offering for the connected car market.

“Many people look at operating systems such as iOS think of it as being far too closed so it will never move beyond Apple’s own products and with Android the concern is that it’s far too open, and it’s a bit too “fuzzy” to use in specific deployments – it is best as a general purpose operating system for phones or tablets,” he explains.

“But RIM has the experience that is required to develop something for such a specific type of industry and such a specific type of product.”

RIM’s role in the automobile space is not a well known one. Operating on a white label basis, the in-car computers are often not branded as RIM or Blackberry, but the QNX operating system is what the head unit in the majority of cars run on.

“Drivers don’t know they’re driving a RIM device – QNX would have been commissioned by the individual car manufacturers for RIM to produce a version of the operating system that conformed to their particular requirements and allows the particular services that they wish to offer,” explains Moss. “It usually ends up being branded by the actual company vending to the consumer – so, typically the automobile OEM. They’d be oblivious to the fact that it’s QNX, let alone that RIM now owns QNX.”

At CES this year, Mike Lazaridis said in what turned out to be his last keynote to analysts as RIM’s co-CEO that software development is the key for the firm. The BlackBerry maker has a built a huge hardware portfolio, but the margins on the hardware side have been suffering, while margins on the software side are very good, even if the software side accounts for a lower proportion of overall revenue.

Operators too have not fully exploited the opportunities presented in the in-car market. Three’s CFO Richard Woodward told Telecoms.com that a negligible amount of revenue comes from M2M, but he expects it to grow in the future to a significant proportion.

Despite the negligible revenues operators are currently seeing from M2M, they believe that M2M services will generate five per cent or more of their revenues by 2015, according to the recent Informa-SAP M2M Communications survey, which drew input from more than 260 M2M stakeholders in 50 countries.

Given the strong ties that exist between mobile operators and RIM, it is quite plausible that RIM could recover from the torrid time it has of late by making a comeback in the car space.

RIM's PlayBook will soon run on the BB10 platform

Canadian device maker RIM has showcased its BlackBerry 10 platform at its BlackBerry World conference in Orlando, Florida. The firm has also released the initial developer toolkit for native and HTML5 software development.

The firm handed out thousands of prototypes for its next smartphones – Blackberry 10 Dev Alpha –for developers to test the new operating system. Developers can use this first beta of the tools to start building apps for BlackBerry 10 and, as the tools evolve over the coming months, developers will have access to an API set that will allow them to build even more integrated apps, the company said.

The toolkit includes the BlackBerry 10 Native SDK with Cascades, a native application development toolset that allows developers to build visually rich applications without having to write graphics code, in C/C++ or Qt, according to RIM. The Native SDK for BlackBerry 10 has a set of APIs that also gives developers access to a range of BlackBerry application services, such as Push and Payment services.

The toolkit also includes support for HTML5 application developers with the BlackBerry 10 WebWorks SDK, allowing them to create native-like applications using common web programming technologies.

Applications created with any of the BlackBerry 10 tools will run on BlackBerry 10 smartphones as well as RIM’s tablet, the BlackBerry PlayBook, when the new platform becomes available for it. RIM said that all of the SDKs will be updated to give developers access to more of the BlackBerry 10 unique capabilities over the coming months.

“There is tremendous interest, anticipation and momentum building toward the launch of BlackBerry 10 devices, and today we’re extremely excited to release the BlackBerry 10 developer beta tools for general use,” said Christopher Smith, VP for handheld application platform and tools.

CEO Thorsten Heins said in his keynote at the event that there are opportunities for the platform beyond mobile, and highlighted the automobile industry as a key one, claiming that 60 per cent of cars on the market today are already running on RIM’s QNX platform. At the event, the firm showed off a Porsche with full BB10 integration.

Analysts’ response to RIM’s announcement have been favourable and some commentators are suggesting that the platform could mark strong a comeback from the Canadian firm which suffered a difficult 2011, in which it posted poor financial results, device launches ran behind schedule, the firm suffered major disruptions to its service and its co-CEOs resigned.

Gartner research director Michael Gartenberg took to Twitter to voice how impressed he was by the platform.

“Camera feature allows you to rewind and capture part of the photo as intended – shows RIM is thinking a lot about details and not just feeds and speeds,” he wrote. “Fast and accurate typing. Personal tailored keyboard learns how you type. It looks very nice, is optimized for one had typing as well. Very nicely done.”

RIM CEO Thorsten Heins said he had conducted a "personal reality check" on the company

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 29^th 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.

Thorsten Heins takes over as CEO and president at RIM

RIM has appointed a new CEO after increasing shareholder pressure and a poor financial performance in 2011. Thorsten Heins will take over as president and CEO, with former co-CEOs Mike Lazaridis and Jim Balsillie stepping down. Lazaridis will become vice chair of RIM’s board and chair of its new Innovation Committee and Balsillie will remain a member of the Board.

According to RIM, the appointment was made on the recommendation of Lazaridis and Balsillie, who had submitted a succession plan to the Board. The Board acted after conducting its own due diligence and the appointments are effective immediately.

“There comes a time in the growth of every successful company when the founders recognise the need to pass the baton to new leadership,” said Lazaridis. “Jim and I went to the Board and told them that we thought that time was now.  With BlackBerry 7 now out, PlayBook 2.0 shipping in February and BlackBerry 10 expected to ship later this year, the company is entering a new phase, and we felt it was time for a new leader to take it through that phase and beyond.  Jim, the Board and I all agreed that leader should be Thorsten Heins.”

Heins joined RIM from Siemens Communications Group in December 2007 as senior vice president for hardware engineering and became COO for product and sales in August 2011

“It is Mike and Jim’s continued unwillingness to sacrifice long-term value for short-term gain which has made RIM the great company that it is today,” he said. “I share that philosophy and am very excited about the company’s future.”

Heins said that RIM has a strong foundation on which to build. He said the Canadian Blackberry-maker has a strong balance sheet with approximately $1.5bn in cash at the end of the last quarter and negligible debt, and he reiterated that the company reported revenue of $5.2bn in its last quarter, up 24 per cent from the prior quarter.

“RIM earned its reputation by focusing relentlessly on the customer and delivering unique mobile communications solutions. We intend to build on this heritage to expand BlackBerry’s leadership position,” said Heins.

“As with any company that has grown as fast as we have, there have been inevitable growing pains. We have learned from those challenges and, I believe, we have and will become a stronger company as a result. Going forward, we will continue to focus both on short-term and long-term growth, strategic planning, a customer- and market-based product approach, and flawless execution. We are in the process of recruiting a new chief marketing officer to work closely with our product and sales teams to deliver the most compelling products and services.”

The new CEO has an uphill struggle ahead of him with stakeholders and observers alike expressing concern at the Canadian firm’s plight in 2011. Last year, a major shareholder in RIM, Jaguar Financial, called for the company to undertake a value maximisation process that could involve selling the firm. At the time, Jaguar chairman and CEO Vic Alboini said: “The status quo is not acceptable. It is time for transformational change. The directors need to seize the reins to maximise shareholder value before more market value is lost.”

Speaking to Telecoms.com last month, Bengt Nordström, CEO and president at consultancy Northstream, voiced his opinion that 2012 would be a very tough year for RIM.

“Sometimes when you’re pushing a certain concept, as RIM was pioneering smartphones with the BlackBerry – and then you miss the boat on touchscreens and the software around it – it almost becomes too late,” he said.

“One of its biggest challenges is how they make the BlackBerry app range compelling. In truth, they need to be successful with their efforts to support Android apps.”

David McQueen, principal analyst at Informa Telecoms & Media, advised that RIM should start over again with a clean slate.

“It’s almost worth them starting again and figuring out what they want to achieve; a bit like Motorola did and like Sony are starting to do now and Nokia did with Microsoft – start again.”

“Too many other companies are taking over. The key differentiators that they had: security, enterprise focus and the BBM platform, all are starting to be eroded, and now there are tools such as iMessage and What’s App, for example. Security is still an issue they can compete on but Samsung with Android are working on improving security in their devices and that just leaves expertise on the enterprise market; and they’re starting to lose all of that as well.”

Last week it was rumoured that Barbara Stymiest, who formerly served as a member of Royal Bank of Canada’s Group Executive and has been a member of RIM’s Board since 2007, would be appointed as the new CEO. However, she has been named the independent Board Chair.

Speaking on behalf of the Board, Stymiest said:  “We believe that Thorsten is the right executive to succeed Mike and Jim.  He has 27 years of telecommunications experience, including four years at RIM in senior management positions.  As a Board, we have been impressed with his outstanding management skills, his leadership and his accomplishments within the company.”

The PlayBook gets some much needed updates

Using Las Vegas gadget-fest CES as a platform to rally some support, Canadian manufacturer Research In Motion (RIM) is showing off the latest versions of its flagship operating systems for both smartphone and tablet devices.

The struggling PlayBook tablet is to get a software overhaul with OS version 2.0, due out in February. The much requested native email application will finally make an appearance, alongside deeper integration with social networking tools and address book.

The company is also hoping OS 2.0 enhancements will help drive developer interest, boosting the device’s flagging app store.

On the handset side, BlackBerry OS 7.1 delivers enhanced sharing functionality, with the addition of NFC-focused updates such as BlackBerry Tag; an update for the popular BBM messaging service; and mobile hotspot functionality via tethering.

BlackBerry 7.1 will begin rolling out this week, while new native app releases of BBM, BlackBerry Traffic and BlackBerry Travel will be available on BlackBerry App World from today.

Current RIM co-CEOs and chairmen Mike Lazaridis and Jim Balsillie

RIM could soon split the roles of CEO and chairman in a bid to reverse its fortunes. Mike Lazaridis and Jim Balsillie are currently co-CEOs and co-chairmen at the embattled Canadian handset manufacturer, but that could change following an internal review of its board structure.

The two could be ousted from their co-chairmen roles by Barbara Stymiest, an independent director who joined RIM’s board in 2007. She is reported to be the leading candidate to replace Balsillie and Lazaridis according to Canadian newspaper Financial Post, which cited “sources familiar with events”.

The Blackberry maker had agreed to the internal review last year in order to avoid a shareholder revolt, after a troublesome 2011, in which the firm saw its net income sink by almost three quarters to just $265m in the third quarter of 2011. The firm was also forced to announce that its BlackBerry 10 devices will be delayed until the latter part of 2012, rather than the first quarter of the year, as was originally planned, and a high profile outage in October saw millions of BlackBerry users around the world experience a service disruption, preventing them from using the browser or BBM messaging platform.

RIM also announced that it will lay off 2,000 staff as part of the cost-cutting programme and one shareholder, Jaguar Financial, a Canadian merchant bank that holds shares in the firm, twice called on the firm to undergo a shake-up, even suggesting that it should be acquired by another company.

The year was so forgettable that co-CEOs Lazaridis and Jim Balsillie announced that they will pay themselves salaries of just $1 each, seemingly in an admission of a poor performance throughout the year.

Nick Dillon, analyst at Ovum, believes that regardless of the outcome of the internal review, the Blackberry maker will need to make major changes in 2012 in order to keep pace with competitors.

“Whether RIM decides to change its management team or not, what is clear is that the company needs to accelerate its pace of change, both in bringing its new BlackBerry 10 platform to market, but also in increasing the attractiveness of its offering through new services such as BBM Music,” he said. ”If the company is unable to speed up its technology and product development it risks being left further behind by its rivals.” 

The internal review is due to be completed by the end of January 2012, and a decision will be announced by the end of February.

RIM is carrying its troubles on into 2012

Beleaguered Blackberry maker RIM reported more bad news as the firm saw its net income sink by almost three quarters to just $265m in the third quarter of 2011.

The figure is a 71 per cent drop from the $911m it recorded in 3Q10, and was impacted in large part by a $485m pre-tax charge related to unsold PlayBook tablets.

The firm reported revenue of $5.17bn for the quarter, down $326m from the corresponding quarter in 2010, but a 24 per cent increase on the $4.17bn it saw in Q2 this year.

According to news wire reports, RIM’s co-CEOs also admitted that new devices that will run on its BlackBerry 10 operating system will be delayed until the “later part of 2012”, rather than the first quarter of the year, as was originally planned.

Co-CEO Mike Lazaridis said that the products will be delayed as the company wants to improve the battery life and the performance of its products before releasing them into the market. He explained that the chipsets that can enable this will not be available until mid 2012.

The news comes at the end of a forgettable 2011 for the Canadian firm, which was so bad that co-CEOs Lazaridis and Jim Balsillie announced that they will pay themselves salaries of just $1 each, as a gesture to investors.

The firm’s second quarter profits in 2011 slid to less than half of what it generated in the first quarter, and to a little over 40 per cent of what it made in the same quarter last year. In addition, a high profile outage in October saw millions of BlackBerry users around the world experience a service disruption, preventing them from using the browser or BBM messaging platform.

The firm also announced this year that it will lay off 2,000 staff as part of the cost-cutting programme and one shareholder, Jaguar Financial, a Canadian merchant bank that holds shares in the firm, has now twice called on the firm to begin a “value maximisation process”, which may include the sale of the firm.

The Playbook is not moving as fast as expected

Canadian device vendor Research In Motion (RIM) has warned shareholders that it has a large inventory of Playbook tablets sitting in its channels at the moment, amounting to a provision for this quarter of around $360m.

Speaking at the end of last week, Mike Lazaridis, co-CEO of RIM, said that “an increase in promotional activity is required to drive sell-through to end customers.” Not an enviable position to be in during what is traditionally the most lucrative quarter of the year.

RIM said it sold approximately 150,000 PlayBook tablets into the channel in the third quarter and believes sell-through to end customers was higher than this amount. Yet the company isn’t shifting its stock as fast as it would like.

“RIM is committed to the BlackBerry PlayBook and believes the tablet market is still in its infancy. Although a number of factors have led to the need for an inventory provision in the third quarter, we believe the PlayBook, which will be further enhanced with the upcoming PlayBook OS 2.0 software, is a compelling tablet for consumers that also offers unique security and manageability features for the enterprise,” said Lazaridis.

While the company is still in the process of finalising its third quarter financial results, it said it shipped approximately 14.1 million BlackBerry smartphones in the third quarter ended November 26.

A further charge of around $50m will also be levelled against company revues for this quarter, related to the recent service outage, meaning RIM will likely miss its targets.

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RIM is rolling out its BBM Music service into the UK

Canadian handset vendor RIM has announced that it is rolling out its BBM Music service on a commercial basis following a successful beta trial.

BBM Music is a cloud-based social music service which allows users to discover and share songs from the likes of Universal, Sony, Warner and EMI with BBM contacts. The size of the music library continues to grow as new friends join the community.

The service was launched in Canada, the US and Australia earlier this month and is set to be launched in the UK Tuesday, for a monthly subscription of £4.99.

“More than 45 million customers already love the social communication benefits delivered through BBM and we are thrilled to be extending the experience into a uniquely social and interactive music service,” said Mike Lazaridis, President and Co-CEO at RIM.

“We have partnered with leading music companies to provide a ‘full track’ music sharing and discovery experience that will provide users with quality music on demand and allow them to connect with friends on a whole new level.”

Omnifone, a premier cloud music service provider, is providing RIM with a back-end solution for the BBM Music service that provides content management, music hosting and reporting functions. The back-end solution helps facilitate the delivery of a full music catalog to BBM Music users and comprehensive compensation reporting for copyright holders.

RIM has added New Bay to its acquisitions in 2011

Canadian devices firm RIM has announced its acquisition of digital content services provider NewBay, the BlackBerry maker’s fifth acquisition of 2011.

The firm has already acquired cloud-based video editing services provider JayCut, mobile social gaming firm Scoreloop, cloud-based calendar and scheduling services provider Tungle.me and contacts management startup Gist, this year.

“Today we are pleased to announce that NewBay has joined Research In Motion (RIM). We’re excited that the NewBay team will be bringing their expertise in cloud-based digital content services to the BlackBerry platform,” said Alan Brenner, SVP, BlackBerry platform on the company’s blog.

“NewBay’s LifeCache platform helps enable operators and device makers to deliver content across multiple, connected devices such as mobile phones, PCs and tablets.”

The company is battling to win back customer trust after a high profile outage earlier this month, but has recently announced it will be delaying the launch of the next version of its PlayBook OS.