2011 in review: BlackBerry and Research In Motion

BlackBerry-logo-marble3

It’s been a rough year for Research In Motion. BlackBerry has been battling uphill against stiff competition, while caught trying to transition from an aging platform to a new one. In the process, they’ve weathered a flurry of bad press, investor downgrades, a massive service outage, product delays, steadily shrinking market share, and multiple PR gaffes, but BlackBerry isn’t dead – 2012 is a new year, and holds a lot of promise for Canada’s plucky wireless underdog.

Although we aren’t quite done with the year just yet, let’s take a look back at 2011 and see what happened with RIM, where they went wrong, and the few places where they did well.

PlayBook launched after delay, and still missed features

When 2011 kicked off, excitement for the BlackBerry PlayBook was just starting to wane. The device was announced in the fall of 2010, and by the time the device actually hit shelves 8 months later, folks were already bored with it. Why did it take so long to get out the door? One rumour suggested that RIM switched processor manufacturers mid-development cycle. On top of the timing, BlackBerry Bridge didn’t do RIM any favours with the public. The only way you could launch into native e-mail, calendar, contacts, and other productivity apps on the PlayBook was if you were paired up via Bluetooth to a BlackBerry smartphone. The pretense here was security, but there are lots of potential reasons why RIM did it this way, prime among them being they weren’t able to get the new operating system to play nice with the established enterprise server infrastructure. Whatever the case may be, all end users saw was a BlackBerry product that couldn’t properly do e-mail on its own, which was confusing and a turn-off to say the least. Worse still, it meant the PlayBook had absolutely no appeal to anyone who had drifted to the growingly popular iPhone or Android smartphone alternatives.

Bridge aside, the PlayBook actually had a lot of good things going for it: strong multimedia support, including Flash and HD video recording, and dual-core processing horsepower under the hood to support 3D games and other intensive activity. One might say the bigger issue with the PlayBook was that it was spearheading RIM’s new operating system. At the PlayBook launch, RIM VPs begrudingly admitted that the tablet’s OS would be finding its way to smartphones eventually, and they’d be phasing out the decade-old Java platform. This left the PlayBook in something of an app vacuum for the first few months. Development tools didn’t reach any real maturity until the second half of 2011, at which point we started seeing some decent titles get into App World, but even then, many of them were sloppily ported from other platforms.

PC Flash games would still have keyboard control instructions, and some didn’t bother adapting the display resolution for the PlayBook. iOS games ported through middleware like Marmalade ran well enough, but still lacked originality, and rarely took advantage of the PlayBook’s signature touch-sensitive bezel for app menu access. I worry that in the long haul, RIM’s scattershot approach to developer relations will continue this downward trend.  If RIM simply offers as many tools as possible so anyone can submit apps regardless of what languages they know, that just attracts lazy devs to the BlackBerry environment for an affair of convenience rather than conviction. At the very least, app selection is better than when I had first reviewed the PlayBook.

Prime among RIM’s developer targets are those in the Android sphere. Now that the Android app player is nearing public release, the PlayBook is actually starting to generate a bit of buzz, which says a lot about how little people were interested in QNX in the first place. Over the last few days specifically, a tool to root the PlayBook has been made available. It will let folks access Android Market apps, which is something RIM (and presumably Google) don’t want to see, but the bigger issue is that it puts a chink into RIM’s carefully-tailored reputation for security. On the one hand, the Dingleberry jailbreak raises a significant hurdle in pushing BB10 smartphones as iron-clad, but on the other, one can now appreciate RIM’s slow-and-steady approach; after all, that’s the only way to ferret out security exploits like this which could ruin a brand down the line.

That said, it’s no surprise that pick-up of the PlayBook at launch wasn’t great, and even with drastic price cuts for the holiday season, RIM is still sitting on a massive stockpile of the devices. LTE, or even HSPA+ models still aren’t available, despite promises to the contrary. I still think RIM’s tablet is being positioned the right away vis-a-vis smartphones. They recognize that the tablet has a very good purpose as a smartphone companion, and that it isn’t just a bigger handset with a slightly tweaked UI. Next year, I bet we’ll see that vision come to bear when RIM opens up Bridge to developers, and we can see some really smart syncing between tablet and smartphone apps – something that really doesn’t exist among the other manufacturers yet. We might also see a ten-inch PlayBook, but at the bare minimum, the current device will get stand-alone PIM apps in February.

OS 7 and new smartphones didn’t quite manage to catch up

The PlayBook certainly dominated RIM’s profile for 2011, but BlackBerry smartphones took a significant leap with the launch of OS 7 this summer. The latest litter of handsets is actually getting pretty big: the BlackBerry Torch 9810, Torch 9850 / 9860, Bold 9900 / 9930, Curve 9350 / 9360, Bold 9790, and we’re still waiting on the Curve 9370. The first three tackled the upper tier, boasting 1.2 GHz processors (a first for RIM), and high-res displays, while the last two, though entry-level, were still better than the best phones RIM had pumped out prior. Augmented reality, a staple on most other smartphones for some time, was finally enabled with a magnetic compass and the right display software, but when it came to NFC, RIM was doing a much better job of riding the wave. The 9850 / 9860 and 9810 didn’t have NFC, but the rest did, and it’s likely to be found in all BlackBerry devices from here on in.

BlackBerry is still behind on now-standard features like the work-in-progress mobile hotspot and DLNA home media sharing. On top of that, there’s still no BlackBerry smartphone with a dual-core processor, or LTE connectivity, and the highest-resolution screen is 800 x 480 – a far cry from, say, the 1280 x 720 screen we’re seeing on the Samsung Galaxy Nexus. Cameras are still sitting at 5 megapixels, and though they’re now able to record 720p video, the likes of the Droid RAZR can shoot 1080p video with an 8 megapixel camera in a significantly slimmer body. BlackBerry even took a step backwards in features this year as the Bold 9900 / 9930 launched with a camera that didn’t have autofocus. It’s understandable if the entry-level Curve 9350 / 9360 didn’t have it, but but skimping on close-up photography with your hero product? C’mon, RIM.

The new software was a very light iteration on OS 6 launched in the summer of 2010. OS 7 introduced voice-activated universal search, a slightly faster browser (though still no Flash support), and BlackBerry Balance to keep personal data and work data separate. The overall experience was still relatively spartan and menu-based, though the new processors certainly helped keep performance smooth and steady – something the old handsets running on a 624 MHz processor had trouble claiming.

In 2011, RIM came to rely even more on BlackBerry Messenger as a selling point of the devices, creating an ill-conceived subscription music service whose utility rested solely on how many BBM contacts you could collect. BBM itself hadn’t changed much since adding groups and profiles in 2009, but RIM did open up the mobile-only instant messaging service to developers in BlackBerry Messenger 6. This enabled a lot of direct linking from apps, such as posting Foursquare badges to your BBM profile, or sharing App World links to BBM buddies. Though many third parties recreated delivery and read receipts in their own cross-platform instant messaging apps, the most telling sign of BBM’s success was when Apple decided to clone it with iMessage; there were even rumours that Google might end up doing the same with Android.

Despite the bump up in specs, the bottom line was that these new phones were still running on an operating system that was built on a software foundation over ten years old. That age has been apparent since the iPhone kicked the smartphone industry in the ass, and doubly apparent once Android won over the affections of just about every handset manufacturer out there. RIM has managed to squeeze a lot of mileage out of the Java-based BlackBerry OS, the latest hardware has a lot of great styling, and RIM’s on the right track to making a fresh start in 2012, but the overall BlackBerry experience was aging, and 2011 was the year where that became painfully obvious.

Investor confidence dropped like a rock

The people who really started noticing that age were investors. RIMM stock is currently sitting at around $16 on NASDAQ, while this time in 2010, it was riding at $61, and hit its 2011 high at $69 in February. Just to put that in perspective, the stock had hit its all-time peak in June 2008 at $144, following a 3:1 split the summer prior.

In 2011, RIM’s market share advantage had all but disappeared, more due to the proliferation of Android than iPhone. In the U.S., RIM had claimed about 17% of the smartphone pie, and that was shrinking by about 4% every four months (or 1%/month, if you want to average it out). When confronted with this reality, RIM tended to point to their impressive growth internationally, particularly Indonesia, where you could turn a half-price Bold 9790 for a profit in a heartbeat. Unfortunately, the rest of the world didn’t share that level of fervour, and even big international markets like India become less viable for RIM when lawful interception became a hurdle for local governments.

RIM’s massive back-end infrastructure was (and still is) an inherent part of every BlackBerry product out there. While it was a boon in the early days when wireless data wasn’t something carriers were equipped to handle, the service providers could handle the data pipes themselves now. Governments and corporations were starting to wonder why they had to send their data off to Canada at all, and what those dastardly flop-heads might do with such information. Of course, RIM had no interest in estranging their traditional enterprise audience, and were trying to accommodate them at every turn, but with so many viable alternatives available, BlackBerry was being seen as less essential than in years past. The massive BlackBerry service outage this fall and the many smaller ones peppered throughout the year illustrated very plainly that this server set up could be a huge liability.

All of that, combined with the aforementioned product issues, contributed to the steady loss of investor confidence, but stock prices ride just as much on perception as on reality. The fact is, BlackBerry was seen as old, slow, and stodgy. Their “love what you do” marketing campaign lacked any significant resonance, and the big push for BBM only really spoke to social circles that were entirely invested in BlackBerry already. Android and iPhone, security and utility aside, were flashy, new, and exciting. Even Windows Phone, still a newcomer in 2011, was making significant strides in winning mindshare among developers and consumers alike. Meanwhile, investors saw RIM laying off staff, having a hard time keeping remaining employees out of trouble, and the CEO getting snippy with reporters. It’s no wonder that many investors were calling for a change in leadership structure.

Financially, RIM was still doing relatively well. They were missing targets, which earned the ire of investors on some quarters, but the company was still consistently profitable, which was more than what Motorola and Sony Ericsson could say (both of whom ended up selling out to one extent or another). Unfortunately, investors have many other factors than RIM’s balance sheet to consider.

Down, but not out

Despite all of the bad press, BlackBerry is still in business, and under no immediate threat of keeling over and having their carcass pecked at by the rest of the wireless world. People have likened RIM to Palm before, and though I don’t agree with the comparison, if BlackBerry is headed the way of webOS, just take a look at how long it took for Palm to be well and truly dead. Even now, with HP having officially axed support, there’s still devices being sold. It will take several more years circling the drain under much worse conditions than those of 2011 to kill RIM, if it’s to come to that at all. Luckily, that means RIM has time.

The PlayBook has been a decent test bed for the new operating system, and though it feels like it’s been a long time coming for smartphones, RIM has been staging BlackBerry 10 as the platform on which they will be building for decades; for a move like that, you can’t be too cautious. Still, next year is when we’re going to see BlackBerry wrapping up with prepations and measurements, and actually make the jump. Once they do, we’ll have a much better idea of what kind of future BlackBerry has. We’ve seen glimpses of two devices which will be leading the way, and I for one am eager to see if next year RIM, with those products and others yet to come, can make the comeback that Palm never did.

Back to top ▴