Today is make or break day for Research in Motion. Either its Blackberry 10 will be a surprising hit, or the company is toast.
The Blackberry maker, which once ruled the mobile world, was mismanaged to the point where it could not find its RIM with both hands. The company has not actually released a product in 18 months and is betting the farm on the launch of two new Blackberries with a new operating system.
The make or break launch was supposed to have happened last year, but was delayed until 30 January. It is a typical RIM decision. The company missed the chance of making money out of the Christmas rush by just a few weeks.
Rumours about the new phones suggest good products, but much will depend on whether wireless carriers and software developers support them.
Both of these groups have become less interested in RIM as its market share tanked over the last 18 months. However, it might just succeed with both.
The carriers don’t like the idea of a duopoly and are hoping that RIM can mount a strong challenge. AT&T chief financial officer John Stephens said the BlackBerry has had a good tradition to it, and he hopes it will be successful.
If the company isn’t, then the carriers will have to pin their hopes on Microsoft, and there lies all sorts of peril.
For it all to work, RIM needs carriers to order as many phones as possible and heavily promote them in stores. But carriers want to cut back the service fees they pay RIM and are using the BlackBerry launch to force the phone maker to do their bidding. Some reports suggest that they are locked in negotiations to lower the fees they pay RIM to use its software and network.
Meanwhile, RIM has convinced developers to adapt some 70,000 apps for its new models, but it had to write its own code to adapt Facebook so that it ran on the machines. In short, developers are still sitting back and waiting for RIM to pull a few rabbits out of its hat. Them sitting on their hands is bad news as the new BlackBerrys run on a new operating system, and are not backwards compatible.
RIM chief executive Thorsten Heins will take a roll of the dice when he takes the stage in New York to launch the phones and show off features the company hopes will resonate with consumers. The company is staging simultaneous events in Toronto, London, Dubai and Johannesburg, among other cities.
It has to work, or RIM will start running out of cash. RIM service and software revenues will fall about 14 percent in the next fiscal year to about $3.6 billion. The uncertainty around service fee revenue, which has provided a stable source of cash flow, could also complicate RIM’s ability to sell some or all of itself, analysts said.