By Claire West

Research In Motion Limited (doing business as BlackBerry)saw shares fall dramatically as it posted a shock loss for the last quarter.

Despite the fact that during the quarter, the company shipped 6.8 million BlackBerry smartphones and approximately 100,000 BlackBerry PlayBook tablets it still reported a $84m (£55m) loss for the three months to 1 June.

“During the first quarter, we continued to focus our efforts on the global roll out of the BlackBerry 10
platform,” said Thorsten Heins, President and CEO of BlackBerry. “We are still in the early stages of this
launch, but already, the BlackBerry 10 platform and BlackBerry Enterprise Service 10 are proving
themselves to customers to be very secure, flexible and dynamic mobile computing solutions.”

Following BlackBerry’s latest results, associate professor of strategy at Warwick Business School, Dr Ronald Klingebiel, said:

“BlackBerry is solidly in follower mode, at least as regards devices. The Q10 and Z10 are devoid of revolutionary features that might put BlackBerry back into the driver seat. The device industry is increasingly consolidating, with a few big manufacturers sharing all the spoils. Furthermore, Research In Motion (RIM) does not seem poised to win the tightly contested race for third place in operating systems (OS), behind iOS and Android, as it needs to fend off not only Microsoft but also Tizen, Ubuntu, Firefox OS, Sailfish and more new entrants.

The main reason why RIM has not yet crashed and burned as badly as some other former competitors is its enterprise server. Business clients have hesitated to abandon the secure working environment and efficient integration that BES offers, even if the BlackBerry handset experience was lagging.

Whatever little time there is left before the last corporate clients abandon the Blackberry package, the company should use this time to refocus on its core strengths in BES, potentially at the expense of abandoning their device portfolio.

Some recent activities show that RIM could be thinking in this direction. Most notably is the release of the Secure Work Space app that allows iOS and Android users to benefit from RIM’s BES 10.1. BlackBerry Balance should be extended to non-BlackBerry devices too. It is in this new area of mobile device management, including mobile app management and secure connectivity, that RIM’s greatest prospects lie, where core competence meets reduced competition in a new and growing field.

Providing device-agnostic services to corporate clients thus may hold the greatest potential. But will RIM’s management be courageous enough to abandon a former mainstay – devices? Given its seemingly inevitable decline, drastic bets on the strategic direction of the company seem in order.”

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