Research In Motion’s New Enterprise Product is Too Little, Too Late

Published Fri, Dec 2nd, 2011   Justin Fritz, Executive Editor

Two drunk guys get on a plane…

No, this isn’t the beginning of a joke. It’s a true story that occurred yesterday, involving executives from Research In Motion (Nasdaq: RIMM) taking a flight from Toronto to Beijing.

Apparently, they caused a big enough scene that the pilot decided to make an unscheduled stop in Vancouver to give them the boot.

Not the best timing, considering the company’s third-quarter earnings is scheduled to be released on December 15. 

And especially since this hasn’t been RIM’s finest year…

• The company’s smartphone market share plummeted to 9.2% (down from 24% last year) as it fails to compete with devices from Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG).
• RIM mentioned today that it’s predicting lower-than-expected revenue this quarter. Which would make it the fourth quarter in a row, according to BusinessWeek.
• Not to mention, the massive data outage in October is costing the company $50 million.

Add it all up, and things are looking pretty bleak for the Waterloo-based company.

RIM refuses to give up without a fight, though.

For one, in 2012 it plans to roll out a new operating system for its BlackBerry smartphones, called BBX. The new OS will merge its tablet and smartphone platforms – much like Google’s new Android version, Ice Cream Sandwich.

Plus, RIM Executive, Larry McDonough, recently spoke to a gathering of Android developers in an attempt to reinvigorate interest in creating apps for its platform.

But the company’s announcement this week of a new software program – called BlackBerry Mobile Fusion – is certainly the most interesting development.

Here’s why…

One Security Software to Rule Them All

In short, BlackBerry Mobile Fusion gives IT departments the ability to keep an eye on all mobile devices affiliated with a business. Including phones owned by employees.

More specifically, it helps managers amp up smartphone security across the board. For example, it allows management to reset passwords remotely and block certain applications in the workplace.

If it sounds boring to you, believe me – you’re not alone.

But with more employees using their own mobile devices in the workplace, it’s not a bad idea. As Wired says, “RIM wants to provide a way of dealing with the tidal wave of consumer devices crashing into the workplace and causing all sorts of problems for IT managers.”

The interesting part is, RIM isn’t just making it available for BlackBerry smartphones, but iPhones and Android phones, as well.

So why is RIM suddenly offering support for the competition? Simple. It’s trying to recoup its losses in its bread-and-butter enterprise space.

If You Can’t Beat ‘Em…

According to research from the Enterprise Management Associates in October, BlackBerry is still the smartphone of choice for medium and large companies. Currently, 36% and 52% of employees in these categories are using a BlackBerry as their primary device.

But that number only reaches 16% for small companies, with 27% now using iPhones at work and 43% carrying Android devices.

And according to Northern Securities, 80% of Forbes 500 companies are leaning toward iPhones for executives – even though BlackBerry smartphones are more secure. The research firm says, “We believe the potential adoption of the iPhone by key RIM enterprise users may have a domino effect, creating further market disruption for RIM.”

So instead of fighting the shift, RIM is deciding to roll with it. This way, it can maintain a solid presence in the enterprise space, even if Google and Apple steal its crown completely.

It’s a smart move, for sure. And investors seem to like the idea. Shares jumped 17% this week – a nice break from the 77% freefall the stock has experienced so far this year.

But the rally was short-lived, since the less-than-stellar earnings prediction this morning is spooking investors yet again.

It’s obviously going to take more than new security software to keep investors optimistic – even if it is Android and iPhone compatible.

And keeping its executives sober in public might be something the company wants to add to its game plan, too.

Good investing,

Justin Fritz