RIM faces GRIM future?

I had blogged about what RIM should do about its flagging smartphone business (click here).

Looks like it was a timely blog post. The senior management of RIM have appointed bankers to search for 'strategic alternatives' (click here for NY Times article on the topic).

In addition to the PC makers without a smartphone/tablet presence, I think facebook might take a hard look at RIM too. They have some ambitions in the smartphone business and their market valuation (despite the recent drop) is many times that of RIM.

Whither Blackberry?

Samsung and Apple are winning the war of smartphones (through different strategies...Apple through a single elegant phone built on its proprietary OS and Samsung through a rapid launch of a  slew of multiple sized devices built on Android). The chart above is taken from a recent Time article.

In the meanwhile, RIMM (and its Blackberry) are losing traction rapidly. Its share of worldwide smartphone shipments dipped from 13.6% to 6.7% in a year's time! Looks like their attempt to get the general populace into the Blackberry Boys' club has not worked.

Given that most folks replace their phone every 2-3 years, RIMM could quickly lose its installed base around the world.

What should it do now?

I suggest the following options:

1) Open up Blackberry Messenger (BBM) by tying up with Yahoo and Google so that Blackberry users can message any Yahoo Messenger and Google user (and vice-versa). BBM is still the big draw for many die-hard Blackberry fans.

2) Woo VoIP developers (such as Skype) to develop a VoIP application for Blackberry OS.

3) Figure out a way to marry BBM and Blackberry email with the Android platform. RIMM will gain access to the myriad of apps for the Android platform and Blackberry users will love RIMM for it.

4) Sell the company to any leading PC manufacturer (HP, Dell, etc) who are lusting for a position in the smartphones/ tablets space. RIMM has relationships with leading mobile carriers around the world. This is a big asset for any newcomer (or marginal player) in the smartphones business. Though this is a drastic move, RIMM is trading at just 6 times earnings and can get a good premium by selling.

Is it a phone? Is it a tablet PC?... No it's a Dell Streak

Dell Streak has launched in the UK and will soon be launched in the US. Here is the product page from the Dell UK website (click here) and a much better product page on the O2 UK website (click here). Here's a more instructional blog post from Dell (click here).

I had blogged in January 2009 (click here) about Dell's entry into smartphones. I had said then that Dell would find it a difficult business plan to pull off. It's time to revisit that assessment. (Of course, Streak is a cross between a smartphone and a tablet PC, not just a smartphone, but lets park that for now).

I was able to see a real-life demo of the Streak (don't ask how) and was impressed by the clarity of the display and the compact form factor.

Here's what works in the Streak's favor (or 'favour' if you are from the UK):

• It has a 5 inch screen as compared to the 3.5 inch screen of the iPhone4
  
• Dell Streak is based on the Android platform, which is an open platform, as opposed to the Apple platform.
• The Streak has a Gorilla glass display that prevents scratches.
• It is priced more attractively than the iPhone 4 (GBP 399 with Pay as you go compared to GBP 470 for the iPhone; On O2 it is free with a GBP 25 plan as opposed to a GBP 60 plan for the iPhone4)

Here's what works against it:

• Should I compare Streak with iPhone or iPad? Is there really a white space between a smartphone and a tablet computer?
• The brand pull of iPhone, iTunes and Steve Jobs
• iPhone4 has Retina Display.... one can read a significant part of a newspaper page on the 3.5" screen without squinting
• iPhone4 has video calling whereas the Streak does not

I still think Dell Streak will find it difficult to crack the US mobile market. Here's what Dell needs to do (to pose a serious challenge to Apple in this space):

• Don't launch exclusively on AT&T. Go for T-mobile, Verizon Mobile, Sprint, also so that you are not competing head-on with iPhone4.
  
• Clean up the Dell website to give more focus to the Streak. Currently you have to click 3-4 times to know that Dell sells mobile phones too. Maybe they should launch a separate product website for the Streak.
• The website needs to have more video on how the phone looks and feels. They should show how apps looks on the phone when they run... In PCs that is not critical as most potential customers have worked on PCs before.
  
• Currently Dell sells rival mobile phones (Samsung, HTC, etc) including some Android models. They need to be clear whether they want to sell Streak or help their rivals sell their smartphones.

I still feel it is difficult for Dell to pull this off....but I'll wait to be surprised.