In what may be perceived as a tale of revisionist history, one that caters not to the current shareholders but to the smug folk who sold their stock long ago, a new story by Reuters examines the reasons Jim Balsillie, formerly co-CEO of RIM, stepped down as head of the board.
Jim’s plan was to utilize RIM’s extensive backbone to offer BlackBerry-like compression and routing services to users of other smartphones, on a number of worldwide carriers. This would allow, say, an Android phone to have access to a limited number of applications and websites, but would be offered at a substantially lower price than a traditional smartphone plan. Numerous carriers worldwide offer this plan for BlackBerry devices, and has been a considerable hit with users in developing nations.
The move would have aligned with a broader internal strategy to focus less on its faltering hardware business, instead using its broad network infrastructure to build a new revenue base. Perhaps yesterday’s BBM for Android leak wasn’t so far-fetched after all.
But Balsillie’s plans were thwarted by the board and the new CEO, who believes that while “substantial change” is necessary within the company, such a move would not have proven successful. Instead RIM intends to maintain its focus on releasing a superior BlackBerry 10 product later this year, and make improvements to its Mobile Fusion enterprise software.
While RIM is expected to sell upwards of 50 million devices this year, it will likely lose money in its handset division for the first time. Its share price has also dropped precipitously, losing 80% of its value since February 2011. Bringing BBM to iOS and Android as a subscription service may seem like a flash-in-the-plan fix for a more insidious brand erosion problem, but it would certainly align itself with Balsillie’s supposed radical way of thinking.
More importantly, as users leave BlackBerry’s for other devices, RIM is going to have a lot of under-utilized data centres for which such a deal could have been just what the company needed. It seems now we will never know.
Source: Reuters
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