RIM Will Fail With Open Source As Hewlett Packard Is Already Failing

| About: BlackBerry Ltd. (BBRY)

RIM (RIMM) has announced in Europe that its BlackBerry 10 Native Software Development Kit (SDK) is now open source. As someone who has covered open source since 2005, and technology since 1982, this has fail written all over it. As I explained in December regarding Hewlett-Packard (NYSE:HPQ) and webOS, open sourcing a failed product is just another way of stretching out the failure and blaming someone else for it.

RIM's decision to take the same route in the same way could threaten the company's existence, since unlike HP it has no other technology on which to make a case to investors. While its shares have lost three-quarters of their value in the last year, this could be the catalyst for them to lose the rest.

Since pushing webOS to open source, HP CEO Meg Whitman has been making big noises about it, claiming it will be bigger than Android. But Jon Rubenstein, the former Palm CEO who knows the product like no one else, has already left the building and the code isn't being released until September.

HP has already released the Android code it was working on and it's plain the company was riven by division, and spent 2011 making two bad things rather than one good one.

The problem for RIM isn't just that, as Globe Investor quotes James Surowiecki of The New Yorker, the product isn't made for today's world. The problem is there's no money to fix the problem, not enough distribution to make the product a player, and no OEMs who might take the product forward.

Successful open source programs start as open source, through big alliances, or with important sponsors.

Linux started as open source. Firefox, while it began as the failed Netscape, quickly drew major allies that made the Foundation a potent competitor to Microsoft (NASDAQ:MSFT). Many systems have succeeded under the Eclipse or Apache foundations because big companies allied to push the code forward in a neutral setting.

Unsuccessful open source programs start the way webOS and RIM have started. Symbian, as an open source project, was begun this way under Nokia (NYSE:NOK). It never works.

RIM may seem to have some hope in that it has had open source repositories for more than a year. This means it already has relationships with developers. But that's not good enough. It will only get you, at most, into a niche or two.

You need more than developers to gain traction for what is essentially a hardware platform. You need OEMs. A Linux tablet called Spark comes out in May but it's really just a re-worked Android from Zenithink, a Chinese company. A second Linux tablet has also been announced, the Trimble Yuma, but it's a specialized device, designed for military applications, with a $3,695 price tag.

If you want to be more than a niche player, you need allies with the cash and motivation to break through the market clutter. Neither RIM nor HP have that. What is left is hype and, later, an attempt to claim that open source is to blame for market failure.

Open source is not to blame for market failure. Market failure is to blame for market failure. In this space RIM and HP are dead men walking.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.