RIM Is Dying Because It Got the Future of Phones Completely Wrong

Rebecca Greenfield
RIM Is Dying Because It Got the Future of Phones Completely Wrong

Following yesterday's sad quarterly earnings report that confirmed the deterioration at Research in Motion we've heard about for the last year, The Wall Street Journal's Will Connor tells us why exactly the BlackBerry maker failed so hard, and it has a lot to do with getting everything wrong about the future of phones. When faced with the decision to make an iPhone competitor, for example, RIM didn't see that kind of smartphone as a real threat, predicting businesses and individuals would stick with the e-mail-centric device. Most telling of RIM's inability to see in the future, the Canadian company kept this mentality even when multiple wireless carriers came to the hardware maker for an iPhone alternative. As Connor writes:

In 2010, AT&T Inc., then Apple's exclusive carrier partner, approached RIM about a plan to develop a touch-screen rival to the iPhone, said two former RIM executives. The chief of AT&T's mobile division visited RIM's research and development team in Waterloo to stress how important it was for AT&T to have a successful BlackBerry product to sell, according to people familiar with the visit. RIM said the objective of the visit was to develop "a differentiated, unique BlackBerry experience for AT&T customers."

That resulted in the ill-fated Torch, which the company only developed after AT&T, Verizon and Vodafone all came to RIM asking for a competitor. Beyond this misstep, RIM also ignored reports that said people were trending away from tactile keyboards and underestimated the trend of people bringing their own devices to work. Wrong. All wrong.

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All of this helps explain why the last few products out of the company haven't impressed; why the BlackBerry maker just announced 5,000 layoffs; and why net sales have fallen 42 percent over the year to $2.81 billion. It doesn't sound like CEO Thorsten Heins has any ideas beyond downsizing its workforce. "I am not satisfied with these results and continue to work aggressively with all areas of the organization and the Board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the Company on areas that have the greatest opportunities," Heins said during the earnings call yesterday. Heins has been saying that since he took the job in January.

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For the rest of Connor's depressing (for RIM employees, investors, and Blackberry users) read, head over to WSJ.