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Balsillie resigned over shift in strategy; Sought to allow carrier use of RIM services

By Adam Zeis on 13 Apr 2012 08:38 am EDT
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Jim Balsillie

It's been a few weeks since Jim Balsillie resigned from his position on the board at Research In Motion. Until now however, it was unclear as to just what ultimately led to the decision. Reuters is reporting that Balsillie "sought to reinvent the BlackBerry smartphone maker with a radical shift in strategy" before he ultimately stepped down. Apparently Balsillie had come up with a plan to allow North American and European carriers to use the RIM network for non-BlackBerry devices. The carriers would in turn be able to offer limited messaging plans and inexpensive data plans to customers. There was disagreement over Balsillie's plan on many levels, however, and he ultimately stepped down from the board.

The plan, which would have been beneficial for carriers, consumers and RIM alike, would have allowed consumers to purchase lower cost, entry-level smartphone plans that included social media, messaging and most importantly -- BBM. The service would allow other devices to run on RIM servers which are located across the globe, breaking RIM's BlackBerry-only history.

RIM currently offers low-cost BlackBerry plans in emerging markets that provide basic messaging and social media. While they had developed software in which to provide these services to both Android and iOS users, the plan was rejected by new RIM CEO Thorsten Heins in favor of BlackBerry 10 devices. While he was originally against the idea of selling or licensing their software at all, after the March earnings call, Thorsten Heins has recently stated RIM may now be looking for partnerships or licensing.

Source: Reuters

73 comments

joski

This guy is a f**king idiot. He makes things sound great, but him stepping down was most definitely for the better.

joski

"While they had developed software in which to provide these services to both Android and iOS users, the plan was rejected by new RIM CEO Thorsten Heins in favor of BlackBerry 10 devices"

This goes to show that Thorsten is focusing on making BB10 great. Up until now, with Balsillie IN the picture, RIM was terrible with deadlines. It appears as though Mr. Heins definitely addressed the issue of the company doing too many things at once.

westex#WP

I have never doubted Balsillie's intelligence (he's much more educated than me), just his strategy. I don't think he ever had a vision that would allow RIM to be anything more than a device for businesses and a niche player in the industry. He was, in effect, the anti-Jobs and didn't have a clue what the public wanted.

I also agree with some of the other commenters that the best thing for RIM, was ridding themselves of the previous co-CEO's.

joski

Ridding themselves of the co-CEO's was necessary, but Mike Lazaridis and Jim Balsillie can't even be compared. Jim Balsillie was riding on the coat tails of Mike Lazaridis - the brilliant one behind RIM. Unfortunately that was a bad partnership between them. I still thoroughly respect Mike Lazaridis. I'd love to shake that guys hand! haha.

gordongr

+1, I like Mike, personally I've always found it hard to believe a word Jim said

Kekus

I used to share your views until I talked to a friend who 'used to' work at RIM. As brilliant as Mike may be, he was also the one who at one time said - 'There will never be a camera in a Blackberry.' People make mistakes and need to course correct - even Steve Jobs. I wish RIM all the best, and I say this as someone who owns shares. Either strategy can work if executed well. I like the new CEO - but he can't afford to make any mistakes.

slheins

I have to agree with the first few comments I have read here. The two former co-CEOs were at the beginning a great mix. They balanced each other out. Half business, Half Engineer. The problem is, as RIM got big, their Egos did too! As stated Mike made calls where devices weren't allowed certain gadgets that are a norm in a smartphone today. Jim, he is or was a solid business man, the problem though is that in my opinion he lost sight of what RIM was capable of and with rising competition, got pushed in a corner where he had no other choice than to announce deadlines that simply weren't possible.

I am certainly not denying their genius in their respected professions, I'm just saying that they let their egos get to them.

I remember reading an article on bloomberg on the two and one thing that Mike said is still stuck in my head. When iPhone first made appearance in 2007, he said that there are no major worries.

PineappleUnderTheSea

Well it appears he believed that things were so dire with RIM that his plan was the most viable option, even with BB10 coming on board. So he obviously didn't want to put all his money on BB10.

This disturbs me a bit, a top guy no longer fully trusting his hardware. Maybe that's why BB10 was delayed until the end of the year, it just wasn't fully baked. But the long delay is definitely hurting RIM, maybe he just wanted to stop the bleeding.

joski

Trust me, he has tried to stop the bleeding many, many times in the past. The bad taste people have in their mouth about timelines and false promises though can be totally blamed on Jim Balsillie. I'm sure his verbal diarrhea is quite convincing!

dentynefire

Wouldn't be soo bad if BB10 was out and was successful. Timing is totally wrong. Awesome that Jim wants to kill BB to save RIM, says a lot about him.

the brother

Jim and his silly balls....what a tard.

Plazmic Flame

I'm gonna take a stand and say that you're all fools! Jim was trying to save the company. Think about it for a second... Expanding BBM to other platforms would actually retain customers and maybe gain customers if they charged an annual fee for it, like $5-$10/year.

People with BBM wouldn't leave to pay for it on another platform and those on other platforms would probably consider jumping on the BB platform to not pay for BBM. Lets face it, there are a lot of detractors from the Blackberry camp but a good majority still miss the BBM.

I take back any negative things I said about Jim, the man was trying to save the damn company. +Reps for that!!

gregorylkelly

It really isn't a bad idea, but it would have been WAY too risky to do. This would have been an end move for them. If it worked, they would have secured profitability, but lost a lot of traction in the OS market share game. However, if it flopped, they would have been out of business in less than 2 years. With BB10 at least they have a chance to become a major player in not only the business/gov't sector, but the consumer as well.

gregorylkelly

And I'd like to add, the fact that they have the plan in place with software written, means they have a backup plan at least if BB10 fails.

I don't know if the market will react or not, but if I were a stock holder, I'd feel more confident in my stock at least being somewhat protected with this backup plan already in place.

Matt8193

The employees at RIM lost confidence in Jim B looooong ago. The running joke after his presentations is that he talked for an hour and said nothing. People would walk out of the meeting asking each other what he said. He is the main reason RIM went downhill. He burned many bridges during his time at RIM.

BerryDiva

I think this goes to show that he was focused on increasing/maintaining revenue streams rather than addressing the shrinking market share.

dmroberts8

This plan does have some merit though. By making a data plan cheaper, you are getting those customers that may have been reluctant to move up to a smart phone. The lower cost may entice them and also have them upgrade to a BB device, and hopefully have them stay with the BB platform, thereby extending the reach of the BBM platform.

Puz_zled

But this is currently BB's one main advantage in emerging markets in the smart phone price wars. RIM can offer inexpensive access to messaging up to full social messaging and then full data plans whereas other venders can offer only data or no data. In markets like India, China, Indonesia and across Afirca and South America this is a key differentiator at purchase vs. the iDroid competition. Giving that option to other hanset vendors as well right now would nullify that advantage. As is pointed out below, this is an option when (and ONLY when) BB10 is out and doing well.

joforg

Is this sort of an expanded consumer version of enterprise fusion? If so, I kind of like the idea, but it seems like it should wait until the BB10 is out and the market has a chance to react. If it is a first rate user device then maybe playing with the server share works without exposing too much. It would give an share of the market beyond us BB types, but it does mean the handsets would have to stay cutting edge to ensure OS sustainability. Might work after BB10 is out and good, or be an alternate strategy if 10 has lukewarm end user reception

lang007

Does not sound to me like this would have worked out like he wanted. And who is to say that the prices for a data plan would go down.

siddo_d

Jim is an idiot it would of damaged the blackberry platform and RIM itself. If thoristen goes ahead I lost all support for him

Matt J

You have to remember that BB10 is just a smartphone version of the PlayBook OS. What do you expect it to do that the PlayBook doesn't already do? Remember, PlayBook OS is not a speed-demon or battery efficient.... Realistically, for a phone like the Bold 9990, whether the OS is BB7 or BB10 will make little difference.

The differentiation for ALL smartphone makers will come through the "back end" once the user interfaces become standardized commodities. Balsille had the right idea.

Case in point... Desktop OS's... really, what is changing? Most people are still using the "windows based" UI developed almost 30 years ago. Windows, Linux, Mac... all the same old. "New" releases of the same old windows-based, multitasking OS. Why? Because it works.

Smartphones will all look alike... like the current Android, iOS and (yes) upcoming BB10. The innovation will be in the "back end".

MattyC47

This comment is extremely wrong. BB10 is an all new OS built on QNX(only similarity to Tablet OS). It is not the same as Blackberry Tablet OS. it will take some great things from it but it will not and is NOT the same thing. The PlayBook will adopt the NEW BB10 OS when it is released.

So yes, the new devices and new OS will make a huge difference. Balsille had the WRONG idea and has had the wrong idea for the last 5 years. That is why he is gone.

Case in point, how were things going under the previous CEO's the last few years when EVERYONE was telling them that staying the course was the wrong choice?

edyb

You can say the same thing about the iPhone being just an iPad or iPod touch with a "phone built in".

BB10 is going to unify and simplify the Blackberry next-gen smartphone experience. We will see fewer devices, but high end and strong players which can compete with the latest iPhone and Android variants.

The Playbook is an entirely new, secure streamlined OS that has future expandability and potential. With support of multi-tasking, several development platforms (native, AIR, webworks, android) it can deliver what RIM needs to do over the next 5 years.

I believe a change was necessary and time will tell, but RIM needs focus more than anything right now and having 2 heads at the top, who was controlling the direction? And what was the public perception?

Puz_zled

I think, when fully implemented BB10 will offer significant multitasking advantages vs. The iDroid competition Os es, however I agree, Matt, that eventually we will get to a place where they are all powerful and slick enough that they commoditize leaving the smart network RIM has as a key diffentiator. We're not there YET though.

blackmoe

From the original article this was based on...

"But in late March, while reporting RIM's first quarterly loss since 2005, Heins abruptly said he was reviewing options such as partnerships, joint ventures, licensing and other ways to leverage RIM's assets. He did not rule out a sale.

"I did my own reality check on where the entire company really is," he said. "It is now very clear to me that substantial change is what RIM needs."

Those comments don't rule out talks with carriers about a plan like the one Balsillie proposed."

rickgainsmith

Had a visit from a Vodafone rep on Thursday. 1. No pricelist for BlackBerry 2. Why go BB, it costs more per month. 3. Everyone is going iPhone, Samsung or HTC.

His words.

joski

Big deal. Another idiot carrier rep.

These people sell these devices but they typically know no more than their opinion - which in that case was quite biased and opposing BlackBerry.

br14

Why would a rep push iPhone or Android over BlackBerry?

Because his employer makes more money selling iPhone and Android.

BB doesn't cost more per month! It costs less because it uses less data.

The MAIN reason Apple and now Android have done so well is because the carriers make more money selling their devices.

Most people buy the phone they're sold.

PLTM

This is why i always say, RIM need its own Blackberry stores in the US so that they can educate to public better and focus the consumers on BB only when they enter a BB Store. When you go into any of the carriers or Best Buy Stores, you are distracted by other products #1 and a bias sales rep whose job it is to generate business for the company and sell all the products of the store. A rep should answer the questions of the consumer, not laugh or form an opinion without being ask for that opinion.

If i walk into a Carrier or Best Buy, i go over to where the BB's are, I expect that the rep will do his complete best to sell me a BB phone, not try to move me over to an Android or iOS. If i then ask about the comparison of the other devices, I expect the rep to ask, what are you looking for from your phone and then highlight the best of each device, leaving the decision to the customer

phonenvy#CB

Preach brother Preach! Hallelyur!!!

fgoyti

A BB store will be empty, unfortunately. Because you go in and it will have 2 shelves: BB phones and BB playbooks. That's it. Can't have a store with just that.

Apple stores have desktops, laptops, iPods, iPhones, iPads, Apple TV.... BB can't compare to that.

Bottom line is BB needs to press carriers to sell BBs. Have an incentive for the sellers. Don't open up another store, just have the salespeople make a bit more commission on selling a BB :)

Puz_zled

In the States, with carriers eating (gagging on/choking on) the true costs of an iDroid, these "a la carte" plans that RIM can offer don't seem as compelling to the generally wealthy end user. They only work where the customer has to pay more of the real costs and that cost matters to the customer. Most of the world isn't going to shell out $100 bucks a month (no problem here but in many places that represents 50% of their takehome income) on their cellphone bill.

Sent from my BlackBerry Playbook

Blackberry_boffin

People need to stop and think.
BBM and RIM's NOC value are increasingly being eroded. It could be a matter of time before a proper competitor to BBM is available elsewhere whilst the value of BBM's exclusivity itself is diminishing daily. The CEO already said smartphone security is not as important as they thought in the grand scheme of things.
So to cash in on these now not only makes sense but is a safeguard that makes others suspended active efforts to undermine these very services. Cashing in means RIM will always be on even keel financially thereby enabling them to innovate. Microsoft gets royalties from Android which is way better than sitting on patents and systems they cannot fully monetize.
It is all subjective like the keyboard debate. Giving these up implies opening up exclusives to competitors.
The best strategy is to leave the option on the table and only pull the trigger based on the response to BB10. That way you are guaranteed BB10 has something to ride on when it launches.
Typing on my PB now, I have confidence on BB10. Though we all know execution is everything.

dagerlach

Balsillie would not have stepped down just over this disagreement. There has to be more. That said, I'm think this would have been a very bad decision for the company.

lorax1284

I think this is a sound strategy if the BlackBerry devices are competitive with Android / iOS offerings... that is, if one of the competitive advantages of BB7 OS devices is that low-cost entry-level plans are possible, then why do you want to let Android and iOS devices get in on that?

When the BB10 devices are available, that go head to head feature for feature and hopefully app-for-app with Android and iOS, then this makes some sense, but not before then.

Puz_zled

Exactly. Well said.

Sent from my BlackBerry Playbook

Matt J

People say that security is no longer a big deal.... but once a serious breach happens (and happen it eventually will, probably on Android or iOS) people will be screaming "how could this happen?!"

vrp

@Kevin : Pls dont miss announcing the new updates in http://devblog.blackberry.com in CB. Developers like me need to get it from CB rather than going to the dev website... :)

beware96

Seriously I don't understand what happened to RIM, on my Palm Treo years ago I had a RIM Application that generated a unique PIN and was able to connect to RIM's back end email system without issue. Why they stopped development on that system makes me wonder. The fact that they want to bring it back is good, but a little too late, once they saw the explosive growth with BBM Jimbo & Mike should have hit the green button on that imitative and immediately started iOs and a Android app to do the same, if they had they would have been in a completely different situation now.

koool1

RIM needs a multi-pronged strategy to get back in the game. Offering BBM and access to RIM servers is a good idea IMO but they still need BB10 yesterday and they still need a revamped tablet with a 10" version.

lnichols

Yes Jim because North American Carriers want to sell cheap data plans to customers with iPhones and Droids, or Blackberry's for that matter, instead of the goldmine they have now! You sir are a moron, had way too much faith in your "great carrier relationships", and they NA carriers dropped you like a rock in favor of more profitable platforms! Also if you put Blackberry services on other phones it would just get more people to move to another platform, and then eventually those platforms, and the carriers would figure out how to provide the exact same things that Blackberry could without paying you $5 per user. I am so glad that this guy is gone. If BBM were available on other phones, and with those other phones support EAS now, it would be the death of the Blackberry phone in all but developing markets.

br14

If Jim Balsillie had such a great relationship with carriers, how come they haven't pushed his products in several years.

And how come last year the Verizon CEO implied RIM was dead as a smartphone platform?

I feel sorry from Mr Balsillie, because he started to believe his own BS and was clearly completely fooled by his customers. His arrogance led to him being blind to his own faults. His lack of experience of enterprise management meant he allowed costs to escalate out of control, and that has been a significant contributor to reduced margins and a falling share price.

If RIM reinvents itself as a purely software and services company it might as well give in because Google provides software and services pretty much for free.

blackberryto

I think this strategy has merit, except it needs to be expanded to remove the carriers from the picture, which have become RIMs biggest liability. Smartphones have become all about data and even voice will soon become just another app - so RIM needs to partner with Microsoft to get Skype closely integrated into BB10 so that they will have no need for the carriers. I think that type of strategy gives alot of merit to the Microsoft rumours from the other day.

thecsman

Now, this is interesting. Two different strategies. We will see in the near future who was right.

Some people here bashing Jim Balsillie from their arm-chairs with no experience in this kind of business are the real, to say the least, dummies.

Let's hope Mr. Heins is right.

trsbbs

While the idea isn't a bad one overall I hope the door didn't hit him in the ass too hard.

The man burned his bridges and came off as a simpleton in his interviews.

Perhaps if he had thought of this two years ago instead of him and his fellow CO-CEO sitting back and sucking the life out of RIM he might still have a job.

Ps, I own two busineses.

Tim

olblueyez

I'm pretty sure if you were to look, you would discover it is his chair that is covered in diamond pleat leather and most definitely has big cushy ARMRESTS!!!

Rob Robertson

BB10 is still 6 or 7 months away. In that time, RIM will bleed more subscribers in North America. Making BBM less and less relevant.

They should have executed both strategies. Opening up BBM would help them immediately, while BB10 would be a long term investment.

EveryApp Mobile

The idea Jim had was not bad at all.....

Xader

Explain how providing an incentive to get a device other than a BlackBerry is good...

HabsSuck

service revenue, hardware have lower margins, interesting idea. RIM's NOC is something people fail to remember, there's value there but how do you maximize it.

Rob Robertson

1. People are jumping ship anyway. The value of BBM and push messaging to consumers is dwindling every day. They need to strike while the iron is still lukewarm.

2. Logical to make some money on service plans to people who are leaving BlackBerry but still miss BBM. Otherwise you get nothing

3. No true competitor to iOS and Android for another 6 months means a steady stream of iOS/Android defectors

olblueyez

His EGO let him sit on his azz and let future development and support for current products become rife with the stench of RIM's demise. Now his EGO would have him think anyone would give a rats azz about some screwball idea that wouldn't work using RIM's current servers being that we all know these servers are maintained to a bare minimum level. How many years did that Donkey have to implement that idea? What was happening when he was working at RIM?

The only person he is fooling is Himself. WE KNOW WHY HE IS GONE.

PlayBook 2.0 Ring any Bells?

finkle56

I read these comments and have a chuckle. Jim wasn't the hardware/ software guy for RIM. Never was, that was all Mike. Yet so many of you blame Jim for your biggest problem, which is poor hardware and lackluster software. So if Jim is at fault yet he doesn't deal with that directly, I am confused how it is his fault.

Jim's fault was he sucks at Marketing, plain and simple. He is an account/ numbers guy and with that come no imagination at all. His plan is a solid plan because it does something that no other smart phone os out there does. He increases the revenue streams and gets those fringe users who like the iphone but miss the joys of the bb network. It is all about bringing money in folks, that is what share holders care about. If They increase their revenue stream, the share holders are happy. Mike L got off his ass and stayed up on the times for the hardware and software, "RIM" is dead talk wouldn't even be out there.

Perjade

Suddenly Jim Balsillie becomes the scapegoat for the failure of RIM. This is very convenient to blame one person for RIM's misstakes.
"Now RIM is on the right track and everthing will be just fine."

fdlopez2

Last in; first blamed.
Last out; first blamed.

Nothing new here, business as usual.

RIM definitely needed fresh blood at the helm no denying.

I'm currently in a holding pattern... I have a Torch 9800(And a PlayBook) that only slightly irritates me on a daily basis. I haven't upgraded to 7 because from what I've read I'm really not missing all that much so I'm patiently waiting for BB10 to hit... I'll even go so far as to wait for the first BB10 slider to show up. By then if RIM hasn't gotten their act together I'll probably be forced to switch to iPhone... Which I view as the lesser of two evils.

About that time iPhone 5 may be out and my current contract will definitely be up so I'll be free to get whatever and go wherever I please.

It's really sad because I love RIM/BB but it's starting to not meet my needs. I'm not someone who sticks with a brand out some some misguided sense of loyalty; I get what works for me and fills my needs. End of story.

berrybait

What specifically is starting to not meet your needs?

fdlopez2

There's a litany of things that are beginning to bug (or have been bugging me for a while)me but the two big things are the web browsing experience and app support.

It seems BB is falling further and further behind the curve. Pages not loading correctly or not loading at all. I dread every time someone sends me a link to any kind of streaming media because it's a 50/50 chance that it will work correctly on my phone. (yahoo's news clips are notoriously spotty for me)

I'm sure I'm like many of you: I use all sorts of services from all sorts of places. Say for instance a store or bank that I like to use drops support for a blackberry app or had none to begin with while iOS/Android support are readily available over a wide variety of vendors... I don't need 23876287345 different kinds of fart soundboards but come on... You have to be blind to not see that BB apps are slowly drying up...

It's just getting frustrating. I can deal with not having a "dedicated" app and using a link to a web page but if the web is spotty anyway what then?

Preemptive box:
-Yes, I've updated my OS.
-Yes, I clear my cache and regularly clean up my phone.
-Yes, I do frequent battery pulls.
-That's great that everything that YOU use works perfectly and you never have any problems. But you're not me.
-No, I'm not a "fanboi" As I said earlier I pick what works based on my needs. If those needs stop being met, I move on.

sam_d

I think you need to first update to OS 7 and then check if you are still missing something.

Matt J

People please.... BB10 will be just another mobile OS....probably similar to iOS and Android. The CORE competencies of RIM are infrastructure and security. Balsillie had it right.

jechow

I totally agree. BB10 will be just another mobile OS with little product differentiation. Just look at Microsoft's WP OS. It is GUI is very different but there is nothing compelling Android, IOS or feature phone users to adopt the WP platform. I do not see BB10 as the OS the trumps all other mobile OS's so I think a lot of BB fans will be disappointed. There is just only so much you can do with an 1800 mA battery and a mobile CPU.

Blacklatino

Interesting story that changes little and you seriously can't blame one person for the downslide of RIM. Too bad it's not that simple. Time will reveal all.

jechow

Being the CEO (or Co-CEO) you get paid obscene amounts of money and bonus, their compensation (salary, bonus, and other perks) are more than you and I will make in a lifetime (maybe 2 or 3 lifetimes) so YES you can blame one person especially if he is in the driver seat.

friendly1013

Let's face it... Its an Android/iOS world. This idea has a lot of merit, which is throwing in the towel on hardware and saying, "no one wants our hardware, but our network and our software are the best in the world". - It makes sense. However, coming from anyone who was at the helm as RIM got to the situation they are in, it loses weight.

I give Blackberry 10 a 5% chance of succeeding. Look, Windows Phone is a superior OS, they paid out the rear to get some of the big apps, they have the Microsoft ecosystem behind them, which is used by so many... Yet no one wants to buy them. Salespeople steer people away from them because, they are less used, hence less app support, etc.

Think about it. If, say, your banking company, releases an app, its going to be iOS or Android. In the US, you are guaranteed to be able to use all the latest functionality that comes out. It's like Mac OS and Windows. Would you buy a PC with a new, flashy operating system that no one, except for a few niche developers, was writing software for?

In the end, Jim may have been right. Leverage what value is left, because if you don't, those servers will go unused and the company will be gone. What a waste of a great worldwide data network. The most secure network, and lowest cost due to compression.

Anguish

So let me get this straight. Heinz' view is that BB10 is just going to make everything okay? I don't get that. It's an OS. It'll have icons. You click on them. Things happen. It'll have a browser. You type a URL, you browse. I don't see what the compelling must-have feature is that will allow RIM to suddenly compete with iPhone and Android devices.

Balsillie thought "we've got a product people want, let's sell it", and the Crackberry community thinks that's a bad thing?

Betting the farm on BB10 - which may very well be nice - is a poor choice. Just like BB6 and BB7 it'll be the next shiny interface only BB fans (of which I am one) care about. RIM needs more to sell than just phones. BES used to be it, but with alternate devices doing IMAP or ActiveSync, and with the market being eroded by enterprise users accepting non-enterprise phones, RIM needs something new. BBM could have been it.

joeku

Is this speculation or fact?
If it's fact, how does it go up against the "All options are still on the table" that Thorstein talked about recently? What it tells me is that RIM still haven't figured out what they want yet. The leadership mindset is still a mess.

marko868

The one thing that could have saved Blackberry too bad cause its app store is very limited and the spinning clock doesn't seem to go away even on the 9810 and 9900! A lot of work to be done if it is too survive.

drecar

You guys are nuts. This is a brilliant strategy. Rim gets paid by every mobile user. Upgrade to bb10 for a full feature set by blackberry. plus it elimInates all competition for bbm.

Liquid_Revolver

He knows RIM is doomed and it should sell the little it does well...I agree

drecar

Although i disagree with other peoples choices, they are choosing other products. Jims idea makes money on that plus introduces these buyers to blackberry tech. Want the full package, buy berry.