The Day Ahead: BlackBerry's Big Reveal
Can RIM rise again? We'll find out today.
Smartphones are the hottest thing in the tech world these days, and no company has been in the game longer than Research in Motion . Unfortunately for RIM (and its shareholders), it's beginning to look its age. The messaging-centric approach that helped the company beat early rivals Microsoft and Palm for dominance in the market now looks like a liability.
Yes, many corporate customers still care about keyboard comfort and data efficiency, but the real unit and profit growth in the smartphone market is in high-end consumer phones — and that's an area where Apple and Google are the strongest players.
The two companies have fielded mobile operating systems tailored for touch screens, and focused on highly visual activities like social media, video viewing and gaming. Apple and Google have also used their backgrounds as software developers to build strong financial ecosystems around their mobile platforms. The payoff is that as entrepreneurs bring creative apps like Pandora, Yelp and Flipboard to smartphones, it gives consumers an incentive to buy the phones that have the best apps. Right now, those phones run iOS and Android.
What does this mean for RIM stock?
Well, there's not much growth left for the BlackBerry in the corporate market, so it's going to have to make gains with the consumer if it's going to boost its multiple and keep the stock heading in the right direction.
That will mean unveiling a new stable of phones with a few elegant designs that third-party developers can easily write software for. It'll also mean loading them with features like accelerometers, GPS, and media playback that developers can tap into when they create apps. Finally, RIM will have to do a better job coaching developers on how to create games and other consumer apps for BlackBerrys — and it should preload each new BlackBerry with eye-popping native apps that inspire developers to create great things. (Apple and Google do a great job of this.)
If RIM makes a good case today that it can do each of these things, there's cause for optimism. Otherwise, the road ahead looks rough.