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"We don’t have the economy of scale to compete against the guys who crank out 60 handsets...

"We don’t have the economy of scale to compete against the guys who crank out 60 handsets a year," says Research In Motion (RIMM) CEO Thorsten Heins (ed: Apple seems to get by with one phone/year). As a result, Heins is interested in licensing BlackBerry 10. But can RIM convince anyone to choose the OS over Android and Windows Phone? Heins' comments echo concerns about how Apple and Samsung's monopoly on smartphone profits is depriving rivals of needed resources. (4G PlayBook)
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Comments (12)
  • RealMrBean
    , contributor
    Comments (67) | Send Message
     
    "It ain't over till the fat lady sings" (good old Irish proverb).

     

    The fat lady just sung.

     

    How can Heins be so naive to think he will license BB10 when Android is open source and free. Granted, QNX already generates some revenues from embedded devices outside mobile.

     

    I side with Benjamin Franklin....
    2 Aug 2012, 12:55 PM Reply Like
  • bedrock65
    , contributor
    Comments (637) | Send Message
     
    Android is not free, both HTC and Samsung pay royalties to Microsoft for using Android.
    2 Aug 2012, 07:52 PM Reply Like
  • danredsox9
    , contributor
    Comment (1) | Send Message
     
    I hope Heins can turn things around, but it might be too late. However, I would sugggest buying RIMM stock because the price will go up, it will never return to the stock's heyday, but it will go up.
    2 Aug 2012, 02:25 PM Reply Like
  • Minerv
    , contributor
    Comment (1) | Send Message
     
    I am a Blackberry Smartphone owner and I own a Blackberry PlayBook. Yes, I have had some issues with RIM's choice of marketing in order to compete with Apple and Android, but overall I feel that RIM is moving in the right direction in order to become the number 1choice of most businesses and government agencies to provide security, compatibility with BYOP networking, and a full service Business Enterprise system. I would venture to say that the people who complain about RIM and Blackberry, and are looking for a tablet that does EVERYTHING, including the tether and HDMI presentation skill of the PlayBook and Smartphone connection, Citrix, etc. one needs in order to maintain the office on the go connection, have not given the PlayBook a try...........
    2 Aug 2012, 02:30 PM Reply Like
  • ningmeng
    , contributor
    Comments (2) | Send Message
     
    i knew a guy who was a technician at RIM and asked him what is wrong with RIM? He said, "nothing is wrong with RIM" and complained,"all because the opponent is too strong and too competitive". I felt speechless. It has been a typical thoughts, I guess, in RIM
    2 Aug 2012, 03:28 PM Reply Like
  • phbanks
    , contributor
    Comments (58) | Send Message
     
    RIMM is not primarily a device maker (although RIMM has made huge profits from them in the past). It provides enterprise solutions.

     

    It was doing great business in the consumer market, but I think that is behind them. However, their enterprise solutions are still a unique value proposition that needs a device that works as wonderfully as a Blackberry device.

     

    It makes perfect sense for a manufacturer such as Samsung or Nokia to make a device to complement RIMM's enterprise solutions.

     

    This is an excellent announcement from RIMM. The company has recognized that they need to focus on the business where they have a huge advantage.
    2 Aug 2012, 05:07 PM Reply Like
  • kherman
    , contributor
    Comments (809) | Send Message
     
    All he really said is that if they make 60 models (whcih they don't intend to), that hey would need to license out the OS.

     

    They have already publicly stated that they need fewer models.
    3 Aug 2012, 01:50 AM Reply Like
  • Yasch22
    , contributor
    Comments (400) | Send Message
     
    Chris Umiastowski at Crackberry.com wrote an article putting Heins' comments into context, and verified this by talking to RIM. Heins was talking specifically about RIM's problems in selling low-end Blackberries. The first couple of BB10s will be for mid to high-end customers, but sooner or later RIM will need a BB10 equivalent to the low-end 9320/9330 Curves they're selling at low prices in developing countries right now. They won't be able to get the same margins and variety of offerings that companies like Samsung have. However, Samsung just might want to put the BB10 OS (presumably superior to every other OS out there) into a low-end handset, which they can produce cheaply because they can deploy economies of scale, and that would work out nicely for both RIM & Samsung. Basically, the problem with Heins' comment is simply that he's still used to having conversations with fellow engineers where they understand each other's contexts and fill in the gaps. He needs to develop the kind of precision you need when you're talking to journalists and the general public, especially in a context where all kinds of lazy and manipulative journalists and bloggers will take any angle they can, or any imprecision in Heins' speech, to twist it into something that suits their agendas.
    3 Aug 2012, 04:03 AM Reply Like
  • bedrock65
    , contributor
    Comments (637) | Send Message
     
    Yasch22, couldn't have written it any better. Great post.
    3 Aug 2012, 09:32 AM Reply Like
  • slickvguy
    , contributor
    Comments (498) | Send Message
     
    You're exactly right. It was very clear and obvious to me what Heins was referring to - not sure why others have such difficulty.

     

    And to the posters above...where do you see Heins making excuses? How is it that you interpret his comments that way? He's talking about business realities - which is actually nice to see for a change from RIM. Isn't it obvious that it makes non sense for RIM to try and compete in low-end handsets against the likes of Samsung? Not sure it makes sense for themt o mfr. devices altogether. Let someone else do that. RIM is about software and services - not consumer/commodity hardware.

     

    There are a few different ways for RIM and the potential partners to work together. Not sure how it will pan out. But that RIM finally recognizes that they'd better focus on being a strong niche player and making sure they keep that market, i.e. play to its strengths. This is a big change. Obvious to the rest of us, but RIM was stuck in yesterday. I still some denial about RIM's reality, but at least they are FINALLY moving the ball forward and making changes. Laying off thousands of unnecessary jobs is a good step too.

     

    RIM could one day be a powerhouse again - but NOT in the way they did it previously. And the QNX/automobile potential - which hardly ever gets mentioned - is huge. The next generation of cars will have smartphone-like integrated technology built into them. We're at the early stages of adoption. RIM is the leader.

     

    If only RIM stuck to its name, they'd be fine: Research In Motion. What we saw for far too many years was LACK of research and very little motion.

     

    I wonder if Watsa is just averaging down to save face because he can't stand losing, or if he doubled down because he sees something most cannot see? He could be completely wrong on RIM, but he's a pretty smart guy. Sure, they all make a mistake now and then. But being on RIM's BOD, I'd be surprised if he wouldn't have just cut his losses and moved on a long time ago if he didn't think RIM was salvageable.
    6 Aug 2012, 01:33 AM Reply Like
  • Yasch22
    , contributor
    Comments (400) | Send Message
     
    Thanks Bedrock. I appreciate your posts too! Here's the link to the article by Umiastowski. http://bit.ly/MlpXAT
    He and Kevin Michaluk also wrote an excellent article on so-called "activist investor" Vic Alboini. http://bit.ly/NKRily
    5 Aug 2012, 02:52 AM Reply Like
  • Filpken
    , contributor
    Comment (1) | Send Message
     
    Sounds like an extremely weak comment from a CEO who demonstrably took the company over and announced he had a solution to turn the company around.
    7 Aug 2012, 02:08 PM Reply Like
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