3 Reasons Not to Count RIM Out Yet

Since the publication yesterday of a damning open letter to RIM’s senior management team from an anonymous employee, Boy Genius Report has two published more open letters. Also, the Financial Post reports that RIM is forming a committee to examine leadership structure in response to analyst pressures to spit the co-chair and co-CEO roles.

The blogosphere is abuzz with people talking about what RIM did wrong, and what the company should do next. You can tell us what you think RIM’s biggest mistake was in our poll, and I’ve talked about what RIM should do before.

But today I want to focus on what RIM has done right, and why it’s too early to dismiss the company and its technology.

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The Company is Growing, Making Gobs of Money and Has $3B In the Bank

I guess that’s actually three reasons rolled into one, but the gist of it is: the fundamentals of RIM’s economy are strong. It’s one of the cruel ironies of modern capitalism that a heavily new company running on borrowed capital and with little revenue can be considered a hot investment, but a profitable and growing 27 year old company with $3 billion in the bank is considered a fail boat.

True, RIM is losing market share to companies like Apple, HTC and Samsung. But the smartphone market is growing. RIM has grown to become the fourth largest phone manufacturer overall. By practically any other measure RIM is a smashing success.

If it wanted to it, RIM could buy Rovio, or go for broke and buy Zynga (not that either acquisition would good a good idea or make any sense). Its acquisitions of QNX, TAT, Gist and Tungle are all logical moves that advance the company’s direction. RIM has plenty of money to either address its problems or pivot (see below).

It Still Has the Best Enterprise Support of Any Mobile Platform

RIM’s e-mail service is one of the original enterprise cloud services, and despite a few well publicized outages remains the gold standard in enterprise mobile e-mail. The BlackBerry Enterprise Server is the most trusted name in enterprise mobility. And now that AT&T has decided to uncripple the PlayBook’s integration with BlackBerry handsets, RIM’s tech is now available on tablets.

I want to keep this article positive, but I do have to add a caveat here: RIM can’t rest on its laurels in terms of its enterprise security and integration. ActiveSync is good enough for most businesses, and third party device management vendors can provide extra security and control. Even the NSA is starting to let employees use their own smartphones for work.

But this is RIM’s biggest strength, and one that it can use to stay relevant.

RIM Wasn’t Always a Smartphone Company

RIM didn’t start out as the maker of the BlackBerry. It started out in 1984 working on technology for Mobitex wireless networks, such as wireless modems. Its first two-way pager, released in 1995 was branded by the carrier, RAM Mobile Data and called the RAM First Inter@ctive Pager. The first BlackBerry wasn’t released until 1998, 14 years after the company was founded. The BlackBerry has been around for slightly less than half of RIM’s existence.

What are the worst case scenarios for RIM? One is being acquired by another company, like Microsoft, and essentially sunsetted (Microsoft has its own mobile OS and its own device management platform). The other is that it continues to exist as its own company, but that BlackBerry handsets flop in the market.

One thing that could cause the latter is a lack of developer interest. That’s already happening. As we’ve pointed out before, not much has changed since Jamie Murai penned his famous open letter to RIM.

It reminds me of the hoops that Nokia developers had to jump through to submit Maemo applications to the Ovi store. Ovi is now dead, and Nokia has all but abandoned Maemo (now called MeeGo) in favor of Windows Phone.

BlackBerry will sink or swim based on its developer community. It could turn this around, but let’s face it, fostering an independent developer community has never been part of RIM’s DNA in the way that it’s been a part of Apple or Palm.

But RIM might not have to sink or swim based on the BlackBerry. It has other assets and competencies that should ensure its survival.

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