A few thoughts on Thorsten Heims’ recent comments about licensing BB10.
After reading a few of the articles about the subject I think that we can draw a number of parallels between RIM’s position and Apple’s position pre-iPod. Even the number of their next-generation OS is the same.
Apple was starting to see its market share decline with the arrival of Windows machines en masse. Very similar to RIM’s situation with the arrival of iOS and Android. At the moment, I think that we can discount the effect of Windows Phone on RIM’s situation.
In order to stave off the marketshare bleeding, Apple decided to license their operating system. This ended up being an absolutely horrible idea for them. The basic problem was that the clone makers were making cheap machines. Most importantly, cheaper than Apple. This is exactly what RIM seems to want other hardware manufacturers to do.
The problem is that this has the unintended side-effect of killing off your own hardware business since you can no longer compete on price. At the same time, the revenue from licensing is usually considerably less than what you get from your bundled hardware with operating system.
Unless RIM is willing to pivot and become purely a software and services vendor, this can only end badly.
To further compound the problem RIM is entering a software market with two entrenched players: Android and Microsoft. Android is ostensibly free, although many hardware manufacturers pay Microsoft some patent licensing fees to stay out of court. Next to these two, we have Apple competing in a similar manner to RIM’s traditional handset business with their own hardware bundled with their own OS.
Quite frankly, I don’t know who would be interested in licensing the Blackberry OS. Perhaps in some of the developing world this would be a viable option, but that’s currently the last place where RIM is making money, so they would be exchanging their handset revenue for licensing revenue, probably at a significant overall loss.
Two logical approaches that don’t seem to be on the table are:
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licensing out the communications stack for integration with other operating systems similar to the way Microsoft licensed ActiveSync for Exchange integration.
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Buy Good Technology and integrate the Blackberry services with their offering.
Licensing the useful, generic part of the stack would permit RIM to continue selling BlackBerry Enterprise Server (BES) licenses, and operator hosted BB services without the overhead of the full blown OS or the headaches of managing hardware reference designs for licensees.
Buying Good is a logical step as they are currently offering the what is perceived by the enterprise market as the valuable part of the BB service to all comers, and are completely OS agnostic. This would permit them to expand the Good service to an existing BB install base and culturally it would appear to be a good fit since the technical architectures of Good and RIM are practically identical.
Both of these options permit RIM to profit from the growth of their hardware competitors, but will require them to wrap their heads around the fact that they have a feature (secure messaging), not a platform.