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An article on Brooks Review, "If I Were CEO", got me thinking about what the new CEO of Rim should propose as a go forward strategy. The task is daunting in part because the simple choice to sell the company is probably not viable. I seriously doubt anybody would buy an broken underperforming company in the most competitive tech markets--handsets and tablets. This chart from Google Finance of the RIM stock price may support my view.
In considering a new strategy the CEO needs to recognize three facts:
- A large, attractive app store is a requirement to be a viable smart phone and/or tablet provider
- The same or a very similar operating system must work across all devices including preferably laptops
- RIM's strength in enterprise is a legacy and that more and more enterprise decisions are being driven by the need to integrate devices that executives pick as consumers
Setting out the market situation is the easy part. Finding a new strategy is the hard part. My thoughts on the new strategy:
Alternative A: Do a Nokia+ strategy
In addition to exchanging cash for exclusivity with Microsoft for their phone operating system, I would do the same deal with Intel. Intel is looking for a big splash for their new low energy chips and I think they would part with significant upfront cash in return for a RIM deal. I would use the cash to heavily promote the new Windows smartphones and tablets, put some money into building out the Windows app store and..drum roll...focus on the developing world where consumers like the free BB messenger and fewer consumers have chosen smart phones and tablets.
I do not particularly like this strategy because essentially all intellectual property is under the control of Microsoft and Intel, neither of whom play well with others. Also, the cost of this IP would be comparatively high, which would put pressure on margins. The advantage of the strategy would be a cash horde that provides time to try a new strategy.
Alternative B: Bet the Company
I think the Samsung Note demonstrates a new product category--the merging of the smartphone and the tablet. Except for Samsung nobody has a quality product in the space and most competitors are more focused on a 7" tablet similar to the Kindle Fire. With RIM's historic strength in enterprise, they could market the Blackberry Note (need to work on the name) to companies as a lower cost alternative to buying employees both smart phones and tablets. The device would run Android to solve the app store problem. All of RIM's encryption and interface know-how for corporate apps would also be attractive to enterprise buyers. Samsung tends to over price their products so RIM could probably establish a lower price point and still maintain good margins.
The advantage of this strategy is that corporate IT executives would like the opportunity to roll back the push for consumer devices to dictate corporate devices. Supporting only one device would also be attractive to these executives. If we opted for the Windows OS instead of Android, it might be a love fest with millions of redundant corporate IT execs pushing the product. (This situation might also happen in Alternative A.) The disadvantage to the strategy is that no one really knows whether the Note will be a successful product, but it is a new category where RIM could establish itself as a market leader. It also plays to RIM's strength in enterprise where they have internal supporters.
