ThoughtPiece: RIM’s Winning Formula

Posted
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Kyle McInnes
on August 16, 2006, at 10:47 AM
in Editorials
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Comments: 9 responses
9 Comments

Research in MotionComing at you with what we hope is the second of many articles, our main man Thought continues down the path of his previous piece to let all the BlackBerry Cool faithful out there know why RIM is poised for success in the consumer market. So give it a read, and when you’re done make Thought proud: post a comment.

In my last post on business models I asserted my belief that it is far easier to go from leadership in the enterprise segment to a position of strength in the consumer market, rather than the other way around. This is of interest to BlackBerry Cool readers because RIM’s position right now is precisely that of leader in the enterprise market but seeking to establish itself in the consumer market.

To have a strong reputation in the business market is an enormous advantage when seeking to enter the consumer market. Why?

Recognition:
Many consumers use or at least know of the Blackberry technology from their own work experience. Moreover, the Blackberry has become so successful that many who have never even used one recognize the name. So there is an already established recognition factor with a sizable segment of the population.

Credibility:
Success in the enterprise market creates credibility with the consumer. Consumers tend to have high regard for the tools of professionals. The assumption usually is that if a brand is good enough for the more demanding professional market, then it likely is good for consumers as well.

CanonFor example, many amateur photographers buy Canon or Nikon simply because Canon and Nikon are the choice of so many professional photographers. Motorola also benefited from its history of supplying two-way radios to the military when it launched into the consumer cell phone market. These are but two of many examples of a consumer brand successfully trading off of its reputation with professionals.

Status:
The Blackberry has become a status symbol. We see the numerous celebrities carrying one, the news reporters using one while on the air, we read about executives and government officials who admit to using one, and we realize that the Blackberry has attained a special cultural status.

Tits McGeeWhen a product is very successful in the business marketplace it can cross the gap from merely establishing credibility to becoming a symbol of status and prestige. Such is the case with the Blackberry. Indeed, pagers and cell phones followed a similar evolution from business tool to consumer must-have device.

Does it Work the Other Way?
Does the arrow of market success operate in the opposite direction? Can a device leverage success in the consumer market to gain success in the enterprise segment? In a word, the answer is a resounding “No.” Businesses are by nature pragmatic and results-oriented; popularity in the consumer market does not translate into credibility gains with corporate decision makers regarding which equipment to purchase.

Try convincing the head of an IT department to buy Alienware computers because they have all the latest bells and whistles. Try convincing a professional photographer to ditch his Canon in favor of a Kodak, because those Easy Share cameras are so popular. It just doesn’t fly.

Therefore, any advantages that RIM’s competitors currently have in consumer market share are unlikely to make much difference in shifting enterprise market share away from RIM.

The Bottom Line:
Thanks to its success in the enterprise segment, the Blackberry brand now enjoys advantages of recognition, credibility, and status as it is poised to enter the consumer market. If RIM comes out with a well designed consumer product line with its usual quality and attention to detail, (and every indication is that they will), the company could make a significant impact in this market.

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  • squished18

    One interesting case of dominance in the enterprise space that did not translate into long-term success: WordPerfect vs. MS Word. Anybody remember WordPerfect 5.1? It ruled! I think they pretty much owned the corporate word processing market at one time. Any thoughts on what happened there?

    One piece of the puzzle might be WordPerfect missed out on the WYSIWYG boat before it was too late. Then feature creep made future versions tedious. Finally, they probably missed the boat on the whole office software integration thing too (Word/Excel/Access).

    Anything for RIM to learn from that?

  • squished18

    One interesting case of dominance in the enterprise space that did not translate into long-term success: WordPerfect vs. MS Word. Anybody remember WordPerfect 5.1? It ruled! I think they pretty much owned the corporate word processing market at one time. Any thoughts on what happened there?

    One piece of the puzzle might be WordPerfect missed out on the WYSIWYG boat before it was too late. Then feature creep made future versions tedious. Finally, they probably missed the boat on the whole office software integration thing too (Word/Excel/Access).

    Anything for RIM to learn from that?

  • Thought

    Thanks, “squished 18″ for your post.

    As to what happened to WordPerfect…I’m no expert in the history of word processing software, but here goes:

    Basically, I think the reasons you give are all contributing factors to the decline of WordPerfect in the market.

    But here’s what I think was the worst mistake WordPerfect made: they were late in releasing their version for Windows.

    So you had a company that prided itself on being multi-platform, and yet they missed out on the Windows version, precisely when the whole computing world was consolidating behind this platform. After that, they were just trying to play catch-up. And of course Microsoft never let them back into the game.

    As to lessons for RIM or any other company: it seems to me that WordPerfect made a common mistake: they didn’t anticipate or adapt to rapidly changing market conditions. They were great in the 1980′s, with a plethora of computers and operating systems, and with a DOS command structure. But when the world consolidated behind Windows, and GUI’s using mice, icons, pull-down menus, etc., they were late to the game.

    So to RIM I’d say simply to pay attention to the market and don’t allow yourself to fall behind. Judging from what we have seen regarding the new 8100 model, I’d say that RIM is not yet in danger of making those mistakes.

  • Thought

    Thanks, “squished 18″ for your post.

    As to what happened to WordPerfect…I’m no expert in the history of word processing software, but here goes:

    Basically, I think the reasons you give are all contributing factors to the decline of WordPerfect in the market.

    But here’s what I think was the worst mistake WordPerfect made: they were late in releasing their version for Windows.

    So you had a company that prided itself on being multi-platform, and yet they missed out on the Windows version, precisely when the whole computing world was consolidating behind this platform. After that, they were just trying to play catch-up. And of course Microsoft never let them back into the game.

    As to lessons for RIM or any other company: it seems to me that WordPerfect made a common mistake: they didn’t anticipate or adapt to rapidly changing market conditions. They were great in the 1980′s, with a plethora of computers and operating systems, and with a DOS command structure. But when the world consolidated behind Windows, and GUI’s using mice, icons, pull-down menus, etc., they were late to the game.

    So to RIM I’d say simply to pay attention to the market and don’t allow yourself to fall behind. Judging from what we have seen regarding the new 8100 model, I’d say that RIM is not yet in danger of making those mistakes.

  • Thought

    Thanks, “squished 18″ for your post.

    As to what happened to WordPerfect…I’m no expert in the history of word processing software, but here goes:

    Basically, I think the reasons you give are all contributing factors to the decline of WordPerfect in the market.

    But here’s what I think was the worst mistake WordPerfect made: they were late in releasing their version for Windows.

    So you had a company that prided itself on being multi-platform, and yet they missed out on the Windows version, precisely when the whole computing world was consolidating behind this platform. After that, they were just trying to play catch-up. And of course Microsoft never let them back into the game.

    As to lessons for RIM or any other company: it seems to me that WordPerfect made a common mistake: they didn’t anticipate or adapt to rapidly changing market conditions. They were great in the 1980′s, with a plethora of computers and operating systems, and with a DOS command structure. But when the world consolidated behind Windows, and GUI’s using mice, icons, pull-down menus, etc., they were late to the game.

    So to RIM I’d say simply to pay attention to the market and don’t allow yourself to fall behind. Judging from what we have seen regarding the new 8100 model, I’d say that RIM is not yet in danger of making those mistakes.

  • badonkadonk

    I still don’t quite understand though how RIM can successfully “decouple” the idea of consumer-friendly products and strong business tool. Maybe that’s the wrong way to express it…
    RIM’s CEOs haad said on numerous, numerous occasions that they would never put a camera in a BB because of the security risk, and because their products were allowed in places where cameraphones were not. How do they keep that reputation when releasing a device with a camera? Is this why they chose to give it a product “name” as opposed to just a model number, or is that because it is easier to say “Pearl” than “BlackBerry 8100″? I’m surprized that they didn’t try to launch their Consumer devices under a totally different brand… I guess they felt (justly) that the BB brand was too good to leave off their Consumer offerings.
    I think this is a very interesting step for RIM to be making, and I can see them producting two lines of devices – business (read: camera-free) devices and consumer devices. It will be interesting to see how they partition additional services (WLAN, GPS, DVB-M, etc) between those two groups – you may end up having not one but *two* BlackBerry devices – one for work and one for play.

  • badonkadonk

    I still don’t quite understand though how RIM can successfully “decouple” the idea of consumer-friendly products and strong business tool. Maybe that’s the wrong way to express it…
    RIM’s CEOs haad said on numerous, numerous occasions that they would never put a camera in a BB because of the security risk, and because their products were allowed in places where cameraphones were not. How do they keep that reputation when releasing a device with a camera? Is this why they chose to give it a product “name” as opposed to just a model number, or is that because it is easier to say “Pearl” than “BlackBerry 8100″? I’m surprized that they didn’t try to launch their Consumer devices under a totally different brand… I guess they felt (justly) that the BB brand was too good to leave off their Consumer offerings.
    I think this is a very interesting step for RIM to be making, and I can see them producting two lines of devices – business (read: camera-free) devices and consumer devices. It will be interesting to see how they partition additional services (WLAN, GPS, DVB-M, etc) between those two groups – you may end up having not one but *two* BlackBerry devices – one for work and one for play.

  • Thought

    badonkadonk: you bring up some excellent issues.

    I agree with you that RIM may very well end up creating 2 very distinctly different product lines so as not to alienate their core enterprise users. As you allude to, the very look and name of the new 8100 seems to be a totally new direction for RIM. Who knows…perhaps even the substitution of the track ball for the scroll wheel will become a differentiating feature for the consumer line.

    I also agree with you that RIM definitely did not want to leave off the Blackberry branding from their consumer line. To me this is a very wise decision and the point of my article. The Blackberry brand is a golden name to consumers precisely because of its success in the enterprise market. It is this name that gives the consumer device a real chance in the market.

    As an aside, I must say that it is apparent from the comments that the readers of the BlackBerry Cool blog are surely an intelligent and and well-informed group. I am humbled to be able to offer up a few of my thoughts.

  • Thought

    badonkadonk: you bring up some excellent issues.

    I agree with you that RIM may very well end up creating 2 very distinctly different product lines so as not to alienate their core enterprise users. As you allude to, the very look and name of the new 8100 seems to be a totally new direction for RIM. Who knows…perhaps even the substitution of the track ball for the scroll wheel will become a differentiating feature for the consumer line.

    I also agree with you that RIM definitely did not want to leave off the Blackberry branding from their consumer line. To me this is a very wise decision and the point of my article. The Blackberry brand is a golden name to consumers precisely because of its success in the enterprise market. It is this name that gives the consumer device a real chance in the market.

    As an aside, I must say that it is apparent from the comments that the readers of the BlackBerry Cool blog are surely an intelligent and and well-informed group. I am humbled to be able to offer up a few of my thoughts.