Part 2: My Rembrandt – Oops I Meant My RIMM Rant

The release of the first iPhone, July ‘07, ushered in phase II of the mobile phone era. Before iPhone, the carriers wielded the power. The carriers dictated what features the phones supported and the cell phone manufacturers  fell in-line. I recently listened to a Research in Motion (RIMM) earnings call. The CEO kept going on and on about integration with the carrier and yadda yadda. They are so deeply tied in with the carriers it’s ridiculous. Palm is going down the tubes and are blaming Verizon for not promoting their phones enough. Hello - it’s not Verizon’s job to sell your phones.   Apple wanted no part of this model. They negotiated feverishly with AT&T for their independence and created a phone unlike any other.

I read a great book, Crossing the Chasm, many moons ago. It has become a classic in high tech marketing. The chasm is the great divide between the new and the old. DEC and Wang were huge companies in the mini computer era. They’re gone. Sucked into the chasm as computing transitioned from mini to personal computers.

All of the Phase I cell phone manufacturers are attempting to cross the chasm. Some have so much baggage that they simply won’t make it. RIMM has built its own wireless data network. It brings in a tremendous amount of revenue to the company.  However, it may not be needed in the Phase II world. Whether it can be carried over the chasm is to be determined. Apple and Google started in Phase II with a clean slate. That’s a tremendous advantage that may not be possible to overcome.

The chatter over on StockTwits inspired me to write this rant. Most are chart watchers over there. The chart is saying that something has to give real soon. Additionally, RIMM announces earnings in 3 weeks and it typically runs into earnings.  Will a sweet looking chart and an earnings announcement trump the company’s business issues?

My questions extend beyond the next 3 weeks.  I asked a question on Twitter this morning.

“Just curious – are there any non-BlackBerry user planning on buying a BB any time soon?”  I only got two response, but they were quite enlighten. The first person was from the US , “Not me….no way.” The second person was from South Africa “couple of friends picked up BB’s last few weeks, as well as myself,cell co’s pumping BB in a BIG way in South Africa lately.”

Although, it is only a small sample size it makes sense.  RIMM’s growth has to come from outside of North America.  How well can it compete with Nokia and Sony Ericsson on their turf?  On the domestic front, the casual blackberry user is definitely at risk.  I put myself in that category.  I am a long time customer, but I am ready to bail. My golf partner has already bailed. I am certain there are thousands of Verizon customers ready to make the switch as soon as AT&T loses its exclusive.

I also believe their power user base is at risk.  Those include people who pound out long emails and updates their blogs from the phone.  For them a virtual keyboard, ala the iPhone, is a non starter. Interestingly enough some of these people are beginning to crack. I have read blogs by power users that are saying that a virtual keyboard and software like swype is workable. If RIMM starts to lose those users it is over.

Personally, I believe that RIMM is hearing the giant sucking sound.  However, only time will tell whether they are sucked in or cross the chasm.

We are on a roll.  Let’s make a trilogy - Part III.