By Scott Anthony Asian Operations Leader, Innosight. Via Harvard Business Review
It has been a rough few years for Research in Motion, the maker of the Blackberry line of mobile devices. Since Apple entered the mobile phone market, RIM’s financial situation has deteriorated and its market capitalization has plummeted by almost 95 percent since its mid-2008 peak of more than $100 billion. The company has brought in new leaders, but most pundits assume that the game is already over, and that it’s just a matter of time before we write RIM’s obituary.
Yet in September RIM reported that its subscriber base had grown to 80 million from 78 million. The company’s market share is still decreasing, but companies on death’s door don’t tend to report sales growth.
What’s going on? The reality is that the Blackberry still has some clear advantages over other mobile devices. Its Blackberry Messenger provides an easy and free way for subscribers to send messages to each other. And its email offering is still strong.
How could that matter, you might think, when there are apps galore that can provide similar functionality on the iPhone or Android-powered smartphones, and those phones offer sharply better ways to view content and access the mobile Web?
RIM’s proprietary network and tightly interconnected system allow it to use data incredibly efficiently. Here’s one illustration. The other week I was on an 18-hour flight between Newark and Singapore. Singapore Airlines has started rolling out Internet connectivity on this flight. It isn’t cheap, running $1 per megabyte of data. I didn’t dare turn on my iPhone, or open up Outlook, but I thought going to Web mail would be safe. 15 minutes later I had a $15.30 bill. Then I remembered the Blackberry in my bag. I connected it to the WiFi network, and had roughly 14 hours of email connectivity. By the end of the trip my bill had gone from $15.30 to $15.45.
One challenge we have when we make decisions is what psychologists call the availability heuristic. If we live in San Francisco and every one of our friends has an iPhone or an Android-powered smartphone, it is easy to assume the rest of the world looks the same way. But when you go out to markets like the Philippines and Indonesia, you observe different behaviors. Many consumers in these markets purchase mobile minutes in advance (so-called prepaid offerings). They might have SIM cards from various providers and switch from network to network depending on the time of day to save money. It is common in India to initiate but not connect a call to send someone a message. RIM’s offering is well suited to the realities of these markets.
Innovation leaders should take three lessons from RIM’s continued success in significant portions of the global mobile phone market:
- Quality is a relative term. Never assert that a product or service is good. First, determine the job the particular customer is trying to get done, how the customer measures performance, and the constraints they face.
- Spend time on the periphery to escape the availability heuristic. If the only data you receive is from core markets and core customers, you might miss the most important trends.
- Closed systems have their advantages. RIM has plenty of problems, but an interdependent, proprietary system allows it to do things that more modular systems simply can’t.
That’s not to say that RIM is anywhere close to being out of the woods. But there’s hope for the company yet. What if RIM decided to essentially ditch its efforts to become a mass-market company and instead focused on becoming the productivity tool for the rapidly growing middle class in emerging markets? Its interdependent system gives it a leg up, and there are still plenty of opportunities to re-think how mobile phones could democratize access to healthcare and education or be invaluable personal productivity aids. It would be a dramatic strategic shift, but one that could have tremendous growth potential.
Six Dimensions has a keen focus on mobile project solutions as well as targeted staff augmentation. We have successfully partnerered with the ”Who’s Who” in the business world by offering quality, cost effective project and technical staffing solutions since 2004. To learn more contact:
John Richards Director, Emerging Technologies. firstname.lastname@example.org