Research in Motion, ‘aka’ RIM; the name stands synonymous with the kind of research going on in its premises from the last 25 years. Like any other company which reaches a level of world recognition, RIM has been through turbulent times and still survived to become leading designers, manufacturer and marketer of innovative wireless solutions for the worldwide mobile communication market.
RIM, started as a small Information Technology company in Waterloo, Ontario in the year 1984 with the efforts of Mike Lazaridis, who is President and Co-CEO along with Douglas Fregin. During the growth period from wireless network development to Black berry, RIM faced challenges which can be broadly stated as:
- Legitimacy of firm and technology.
- Implications of technology standards.
- Network effects and complementary goods.
- Partners and social capital as resources.
Lots of critics came along the fame for RIM, like many believed that RIM was too small to maintain its dominance. But RIM has proved its dominance with Black Berry becoming a part and parcel of huge population across the globe. It would be injustice to cover the challenges faced by RIM spanning 25 years in few pages; hence we bring forward a few important case studies.
Case study 1:
RIM launched software in the year 1990 which allowed users to send data on wireless data network, but unfortunately the software failed to create business because it was beyond the time in the market; the consumers were not ready for it.
But RIM was undeterred and in the year 1991, RIM’s wireless technology for modems was licensed by Erisson for $250,000. As the market for wireless data emerged; RIM started producing wireless modems for computers and other appliances.
Case study 2:
It was in 1995 when RIM convinced BellSouth, Pagers – portable wireless devices capable of receiving and sending data. BellSouth agreed to expand its network coverage with a view to support the handheld devices. In 1997, RIM launched the first interactive pager. This pager was wearable that notified the receiver when a message was received and also allowed to respond to the message.
RIM found new vision in this endeavour; they approached BellSouth and proposed to develop BlackBerry which they believed will capitalize the market. BellSouth agreed to sell it wholesale airtime that could be used for the product. In the process of product development, RIM protected its advantages with consistent policy of securing patent protection for its products.
Case study 3:
It was in year 1999 when RIM’s director of Product Planning, Ray DePaul sat in his office and prepared his notes. Top management of RIM had called a meeting to discuss latest product-the BlackBerry and its intensions to set a new standard. The idea was clear to become a world leader in wireless communication devices.
But the challenge faced by the company was mighty, RIM had only 270 employees and was trying to promote wireless email product. RIM faced problems in attracting personnel to work with them because of its size and location. Despite this, RIM was well known for its cutting edge technology; also RIM was an object of curiosity and interest particularly among students and local universities. As a result, it managed to recruit some significant and valuable talent. And thus in January 1999, BlackBerry was launched which allowed its users to send and receive data through emails.
Case study 4:
Competition for RIM’s products came from the likes of Nokia and Motorola who were putting huge investments in wireless digital voice communication rather than wireless data communication. On the other hand, Personal Digital assistant from U.S. Robotics was making headway into market which could digitally organize and store personal information such as task lists, calendars, contact information etc.
RIM could see in future and under leadership of DePaul it predicted a convergence to a single worldwide standard of future devices. The future generation networks would support and encourage multifunctional devices with e-mail, voice, internet connectivity and multimedia functions. Industry standard committee was setup to set standards for future technology generation.
In 1999, RIM’s technology was perceived as one of the few wireless data solutions, the company could not participate in such committee due to its small size.
Case study 5:
(1999) Despite all the revenues of RIM coming from United States, it was almost unknown over there. Potential users were unfamiliar with BlackBerry’s capability, value and ease of use and thus would not allow a small company to be the part of their communication network unless they know that company is reliable and is long known in the field. Also most organizations did not have resources for BlackBerry; instead they had to shift resources from other areas to adopt BlackBerry. BlackBerry faced resistance from IT departments companies which felt that the device is complex enough to confuse an already complex market. To worsen the matter, RIM did not have enough sales force in order to approach each company individually and encourage adopting the product.
In order to face such issues RIM needed to name its products with its own name, do private branding of each BlackBerry in market. After a working on well understood strategy, by September 2002, RIM started licensing its technology to cell phone makers, like Nokia. The companies stocks rose more than 800 percent in May 2005.
Above a mentioned a brief discussion on the challenges faced by RIM. Please appreciate that these Case study are condensed and are the most prominent ones in the history of RIM.
What were some of the industry factors that influenced rim?
IT Industry dynamics posed unique challenges for RIM and influenced it. Few of them are:
In 1999, Companies like Nokia, Motorola invested in voice communication and other means of communication. RIM did not have enough resources to produce wide variety of complementary goods for its BlackBerry. As a result the performance was unsatisfactory compared to voice communication etc. Thus the consumer demand was low for BlackBerry which also reduced the interest of software developers and other complementary goods producers. This forced RIM to improve its product compatibility with other kinds of communication channels.
RIM’s products used to be compatible with the data – only Mobitex and DataTAC networks in 1999. This influenced the company to capitalize on future products that would be an upgrade to GSM standard to GPRS.
RIM’s old partner BellSouth wanted to downplay RIM’s brand in its own favor and other partners also tried the same. This influenced RIM to put its own name on the product to strengthen its brand. Emergence of new non voice wireless communication systems like GPRS, increased speed of data transmission and convergence voice and text data in single device attracted both carriers and handset manufacturers. Thus new emerging technologies have influenced RIM’s dominance in the market.
With Microsoft and Good Technology acting as software vendors, that has more than 5000 organizations paying for its rival GoodLink system, BlackBerry position was influenced. Microsoft introduced new versions of its mail server and Pocket PC software which has push email style like BlackBerry.
The intense competition in the communication market forced RIM to think of it future revenues. Thus RIM entered into partnerships and tried to secure its fate in the e-mail industry as a whole, which has grown and is projected to keep growing exponentially.
From the above discussion, it can be drawn that RIM enumerated the challenges it faced during the course of 25 years and emerged as leading designer, manufacturer and marketer of innovator wireless solutions for the worldwide mobile communication market. BlackBerry proved to be successful and RIM launched various other server versions; today more than 42000 BlackBerry Enterprise Server have been installed worldwide and more than three million people subscribe to BlackBerry service in some form or the other.
But the questions in front of RIM were logical; was this enough to ensure firm’s survival and success? What new decisions had to be taken because of network effects, compatibility issues, and technology standards? What should be the strategy; should RIM aggressively move into the market or delay product development for standards to rise?
RIM had taken a bold step in the initial stages of wireless communication; hence it acted as a beacon for later industry. Other companies invested in alternate technologies of wireless communication as they were awakened by the early success of RIM. The competition was becoming intense and to survive this threat RIM entered into partnership with companies that could major threat.
These influential factors affected RIM course of action and thus we find some of the above stated case studies which clearly show that RIM never deviated from the aim which it coined in its inception; i.e. development of hardware and software for wireless data communication.
- Research In motion: A small firm commercializing a New Technology by Sofy Carayannopoulos Journal Title – Entrepreneurship: Theory and Practice. Volume 29, Issue: 2, Publication Year – 2005.