RIM’S dilemma
With clients jumping ship, marketing is becoming as important as technology,
As high-profile government and corporate clients ditch their BlackBerrys for other smartphones like iphone or Android, Research In Motion faces one of the gravest challenges in its history, experts say.
And that’s as much about marketing as technology.
This week alone, the U.S. National Oceanic and Atmospheric Administration as well as energy drilling giant Halliburton announced they were switching to iphones. There were also reports the U.S. military had overlooked RIM in its search for smartphones to handle classified documents.
“This is as potentially dangerous for RIM as listeriosis was for Maple Leaf Foods,” said Ken Wong, a marketing professor at Queen’s University.
In 2008, an outbreak of listeriosis killed 20 people in Canada, and was traced back to a Maple Leaf Foods processing plant. It was one of worst outbreaks of food-borne illness in modern Canadian history. The company’s public image took a battering as a result.
While RIM’S products admittedly haven’t killed anyone, Wong says the series of high-profile desertions could be just as damaging in terms of perception, because it sends a message to other customers who had been the company’s bread and butter market.
“If other companies are looking at it, they might think ‘well, maybe RIM’S security isn’t as good as it used to be, or maybe Apple’s is better than it used to be,’ ” said Wong.
It’s also a potentially damaging message for consumers who are looking to their smartphones for more than just email, text messaging and the odd bit of web browsing.
“If your smartphone is becoming your virtual wallet, the last thing you want is the message that your security isn’t as good,” Wong added.
RIM’S Blackberry devices are still a popular choice for many securityconscious U.S. and Canadian government departments, including the FBI. RIM’S Blackberry 7 operating system received Canadian and U.S. government approval last week.
Still technology analyst Carmi Levy said the desertions are a blow to RIM, whose high-profile troubles came to a head weeks ago with a changing of the guard at the company.
Founders and co-chief executives Jim Balsillie and Mike Lazaridis stepped down and were replaced by incoming chief executive Thorsten Heins. Heins said one of his most important tasks is to hire a chief marketing officer.
“This is a huge change and the fact that RIM wasn’t part of the discussion here is a big knock against the Canadian company’s previously unassailable reputation for security,” Levy said.
RIM stood tall in 2008 when incoming U.S. president Barack Oba- ma, who insisted he would not surrender his Blackberry, was eventually given the green light from his security team to use a specially modified one. “One of the last remaining bastions for RIM is that its security is better than anyone else’s. If the U.S. government now decides that Android is good enough, it gives pause to government agencies and corporations as they consider platform choices,” Levy said. “It means the Blackberry is no longer the only secure choice in town.” Kevin Dede, a technology analyst at Brigantine Advisors, said while it’s disappointing Blackberry devices may not have been chosen for military use, it’s not a serious blow to RIM’S reputation. “I don’t know how much of their sales are driven by the U.S. government,” Dede said. “But I don’t view the government as technology innovators.” Still, from a marketing perspective, this week’s events have been damaging, says Wong. The company needs to do a better job than its less-than-adept responses to earlier crises, such as two major service outages. They could do worse than learning from Maple Leaf, Wong suggested. “What they needed to do was first acknowledge very quickly that there was a problem, then say they’d figured out the cause, and how to ensure it wouldn’t happen again,” said Wong.