Paul Grim: RIM’s Burning Platform

Nokia CEO Stephen Elop made the symbolic leap off of the burning platform, and joined forces with Microsoft. There were rumors that both Android and Windows Phone 7 were in the running to supplant Symbian and save the once-dominant mobile phone maker, and of course Elop’s prior tenure at Microsoft might have helped the process along. But this is truly a bold move, and a smart one (for both Microsoft and Nokia).

The wireless ecosystem has witnessed dramatic, tectonic shifts in the past two years, all of which are good for consumers and application developers. Many wise men in the industry spoke of continued fragmentation of platforms, and to this I again say “pshaw!” Before this decision, the industry was morphing at warp speed into an Apple/Android duopoly.

To wit:
– Android-powered smartphones decimated RIM’s market share in Verizon smartphone sales (dropping from 93% to 19% in only 12 months!!), and soon surpassed even Apple’s sales overall
-Apple now begins the counter-punch in the US, with the Verizon launch
Android releases its new OS – Honeycomb – and makes a tablet play to combat the iPad phenomenon
-Apple inevitably prepares to launch a low-cost iPhone to combat the low-cost Android handsets

Meanwhile, what happened to the other platform providers?
-Microsoft launches Kin, pulls after one month. They then launch Phone 7 with half a billion dollars in marketing, and Christmas shipments disappointed.
-Nokia dithered, played with MeeGo, and even took a cheap shot at the other handset makers
-Palm released a great OS, but ‘twas a party to which no one came. The company sold to HP, who now isn’t quite sure why they bought it.
-The feature-phone application developers using Brew and other tools are rapidly jumping to smartphones, because pretty soon that’s all there will be left.

So now, faced with the prospect of metaphorical immolation, Nokia has leaped into the chilly waters of Phone7, hoping to spot a life raft. Given the massive installed base of Symbian phones in Europe and Asia, this could realistically turn the smartphone duopoly into a triopoly, and save both Nokia and Microsoft Mobile in the process.

So where does this leave Blackberry? Well, they are the last ones left standing on that burning platform.

RIM, the company that arguably started it all in the smartphone world, is now facing an existential strategic dilemma. Once the preeminent enterprise smartphone of choice, it is now being hounded on all sides by the iPhone and Android phenomenon. Despite several smart acquisitions such as QNX, its phones still do not measure up to its competitors in any feature other than (of course) email. The average corporate user would always be the laggard in giving up the secure, reliable, and rock-solid email phone for some flaky touch-screen battery hog; however, even they are now migrating away.

So what can they do? For a long time, I thought that the best match would be to partner with Microsoft, but that ship may now have sailed. Microsoft still has its eye on the enterprise market, and RIM’s foothold there is still strong, but then again Apple wants to break in as well. And yet Apple is finally finding (oddly enough, with the iPad) its own way into the enterprise opportunity.

One interesting sign of where they might be headed is today’s announcement that RIM’s Playbook tablet will support Android apps. Is this a first tentative step toward partnering with Google, or does becoming yet another handset OEM fundamentally negate what RIM is all about? Maybe it’s better than being up on that platform.

Paul Grim is a founder and general partner with SunBridge Partners. He writes a blog called Grim Times and tweets @jprgrim on Twitter.