RIM Continually Searching for Growth

Implications: RIM’s growth aspirations have led the company to expand its offering to include less-popular and unproven solutions like pre-paid and Blackberry Connect, especially in emerging markets like India.

Analysis: RIM’s core offering, and the basis of its success, is the Blackberry device (from which it derived 82% of its revenue in its last quarter) along with servers (BES or BIS) to manage email and application data transfers.  These products have served RIM well as it has grown its customer base to over 16 million and has conquered the enterprise mobile email market.

Now that RIM has significant growth aspirations and is courting the consumer market, the company is looking to pre-paid and software offerings to drive growth in some emerging markets.  These offerings have had little appeal in RIM’s core North American an European markets, though to RIM’s defense they have not been widely available.  Blackberry Connect, which allows you to have a Blackberry-like experience on a non-Blackberry device, was launched several years ago with limited uptake.  The solution was a hard sell to device manufacturers and mobile operators, and most importantly perhaps, users preferred the complete Blackberry experience as opposed to a Blackberry user interface on top of a Nokia or Samsung handset, for example.  Blackberry’s pre-paid offering, also not widely available, has not taken off either.   In most global markets RIM participates in the high-end, post-paid enterprise and pro-sumer segments and thus never pushed a pre-paid solution.

While the strategy of software and pre-paid may be necessary for emerging markets because of cost constraints, limited brand recognition (RIM did not have a decade to penetrate the enterprise market and position itself as a premium product) and time-to-market, the strategy is unproven and reliant upon RIM’s secondary offerings.