Just a few years ago, Research in Motion’s BlackBerry line was on top of the mobile phone market as a niche phone for people in the business world. Its BlackBerry Messaging (BBM) was likewise one of the top features in the market.
Now, RIM has fallen behind its smartphone competitors and has lost its lucrative niche market to iPhones and Android phones, resulting in a recent freefall in RIM’s profits and stock value.
There are numerous problems in the company: RIM’s stock fell 23 percent over the last year as the company experienced a 59 percent drop in profits in the second quarter of this fiscal year. The sales of BlackBerries dropped for the second straight year, from 13.2 million in 2009 to 10.6 million in 2011. In the tablet industry, the Blackberry PlayBook only sold 200,000 units in the second quarter, compared to 500,000 in the first.
The company’s position worsened in June of this year when an open letter to RIM’s executives from a company employee made the rounds on the internet. The letter blasted RIM’s business plan and the company’s mismanagement over the last few years.
RBC Capital Markets analyst Mike Abransky said BBM and BlackBerries simply aren’t “cool” anymore, attributing their lagging sales to a lagging PR and marketing department. Junior Danielle Russo agrees with Abransky’s view.
“The iPhone just looks and seems cool,” Russo said, “and it makes me feel like my BlackBerry is dated. I’ve only had my BlackBerry for a year. The PR for the BlackBerry is awful when you compare it to the iPhone or Droids.”
Despite the complaints, Russo has no plans to switch. Her roommate, however, does plan to switch to an iPhone when the phone plan on her Blackberry expires.
The BlackBerry might have flatlined in 2011, but they aren’t down for the count: RIM still has an estimated 45 million BlackBerry users. Although the PlayBook has lagged in sales, its QNX operating platform is set to be implemented in new phones set to be released in 2012. Furthermore, only the BlackBerry supports Flash, and RIM executives hope to capitalize on this advantage over its rival Apple.