Research In Motion (Nasdaq: RIMM) appears to be doing something about its lagging performance. It recently replaced its two-headed monster CEO with one person, new CEO Thorstein Heins, though he has started off on the wrong foot in proclaiming that the status quo should work for the time being. As my colleague Sean Williams points out, the "steady as she goes" strategy has failed to help RIM recently, so why does he think it will help in the future?
Enterprise strength is waning
If there is one thing that RIM has over its competitors, it's that its phones are well liked by business and government users. The security afforded over the BlackBerry system is good enough for government agencies; in fact, up until October 2011, a BlackBerry was the only phone that can be used to remotely access email on most Department of Defense systems.
This position as enterprise leader has already started to come under fire, with oilfield-service giant Halliburton announcing a move from BlackBerry to Apple's (Nasdaq: AAPL) iPhone over the next few years. And it may not end there. RIM has been known to skimp on upgrading its systems, including a failure to upgrade that directly contributed to a three-day network outage back in October. I think that security concerns could be easily overcome by any of the other smartphone providers, and I am paying close attention to what Microsoft (Nasdaq: MSFT) can do with its new Windows Phone.
Microsoft may already have a leg up on its competitors, because Windows is already the operating system of choice for most large businesses. The idea of a phone that can be an extension of your desktop at work -- including a streamlined integration of Outlook, the most widely used email client -- could bode well for Mr. Softy and its more recent foray into the mobile space.
Consumers are important, too!
While RIM could probably do well enough by focusing on its enterprise business, the true money in mobile is made when consumers are buying your products. It wasn't all that long ago that BlackBerry was the smartphone to have. Now, more than 75% of the 100 million smartphones owned are either Google (Nasdaq: GOOG) or Apple, which are just eating away at the market share of RIM and Microsoft. The current market share for Microsoft doesn't yet reflect its new generation of Windows Phone, but many are pointing to the tech giant's partnership with Nokia (NYSE: NOK), and its recently launched line of Lumia smartphones, as a positive sign for the future of the phone. It is not out of the question to see Microsoft gaining some of RIM's current market share going forward.
Is it too late for RIM?
Research In Motion still has an opportunity to capitalize on the current smartphone revolution. It is just going to take some different thinking by those in charge of the company. A new CEO is a good start; only time will tell if having similar ideas to the previous regime will keep the company mired in its current slump.
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