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Nokia and RIM, pioneers in wireless, seem to be on the ropes

Matt Hamblen | Oct. 3, 2011
Nokia and RIM, two of the pioneers in wireless communications, are now scrambling to adjust to newcomers such as Apple and Google.

QNX powers the PlayBook, but it won't appear in new RIM smartphones until 2012, which may be too late to help the company, analysts said. RIM has fallen to third place in U.S. market share behind Android smartphones and Apple's iPhone. It now holds 11% of the market, according to IDC, having reached nearly 50% just five years ago.

Kagan said RIM's development of the PlayBook was partly a reaction to the decline in its smartphone market share. "They said, 'Keep your eye on our new entry in the tablet marketplace with the PlayBook,' [and] we all watched and hoped," Kagan said.

If RIM really did exit the tablet market a few months after PlayBook's April launch, "that would be an incredible stunner," Kagan added.

He faulted RIM for losing key senior executives over the last year, including Chief Marketing Officer Keith Pardy in February. His departure came only a month after RIM executives told analysts, during a Boston session showing off a trial version of the PlayBook, that there was a thorny question of whether the Playbook was suited for RIM's traditional business users or for a growing consumer market.

Bridging the consumer and business markets with PlayBook was "the marketing challenge," said Ryan Bidan, RIM's senior product manager for the PlayBook at the time.

Kagan agreed that RIM has indeed faced marketing challenges and has also been dinged for a poor browser in its smartphones and for other technology problems.

He said RIM should "refocus on their core customer group, the business community," while also updating the browser and beefing up the BlackBerry application store. "They have to refresh their brand in the fast-moving marketplace before they are lost forever," he said. "RIM is currently running in so many different directions that they have no focus."

Llamas said RIM needs to "get QNX right" with smartphones in 2012, after having a rocky 2011. "RIM completely missed a smartphone cycle by not releasing a smartphone for the first half of the year," he noted.

Kagan said Nokia's move to lower-cost smartphones puts them in a better position to succeed than RIM. "If RIM cannot update their technology and bring their smartphone technology up to speed, I am afraid to say they may indeed be in serious trouble."

Llamas said both RIM and Nokia need to make big changes. "This is the reality of things," he said. "You have to shift your entire paradigm. It's going to be big and it's going to hurt and take time and resources. Paradigm shifts are not without growing pains."


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