Mumbai, July 8: The going looks pretty grim for RIM.
Research in Motion (RIM), the $18-billion Ontario, Canada-based mobile communications company, recently announced results for one of its worst quarters in its 28-year history.
The maker of BlackBerry phones is wallowing in losses. It plans to slash 5,000 jobs worldwide this fiscal, which is over and above the 2,000 last year.
Worse, RIM president and CEO Thorsten Heins' biggest bet ' the BlackBerry 10 ' has gone badly awry after he was forced to put off its launch till the first quarter of calendar 2013, giving rivals such as Google and Apple the opportunity to grab the mindspace and market share with the products and service offerings they plan to launch later this year.
Heins has been driving a hard agenda ever since he was pitchforked into the hot seat earlier this year. He has decided to cut jobs, slash costs by $1 billion this year, and has called in consultants to help him completely overhaul the organisation.
However, officials overseeing RIM's India operations aren't allowing all that depressing talk to dim their confidence as they explain their strategy to grow the business over the next few years.
There's no doubt that BlackBerry sales are bucking trends in North America and are clearly rising in India and the Asia Pacific region. Over 54 per cent of the BlackBerry users today come from outside North America. And just over 70 per cent of consolidated revenues come from outside North America.
In India, enterprise solutions remain the bread-and-butter business and RIM officials are aggressively pushing into that space where it has always held a pre-eminent position.
"There was a time when we were seen as elitist. Not any more. We are looking to address all parts of the pyramid: the large companies (who roughly number 8,000), the middle-level companies and the small ones in the lowest tier," says Sunil Lalvani, director (enterprise sales) at RIM's India operations.
"We have tweaked our strategy for India," adds Lalvani. There are two broad parts to the strategy for India ' both underpinned by the resolve to trim end-user costs.
In the case of companies ' especially SMEs ' RIM has staked out the turf by offering a price-sensitive BlackBerry Enterprise Server Express (BES Express) solution.
Until last year, companies could only hook on to the fully-loaded BlackBerry Enterprise Server (BES), which comes with a customisable menu of 450 IT policy options.
A policy option is basically a special service feature. For instance, a company might want to stop rogue elements in its workforce from pilfering data. So, it could deactivate cameras on the BlackBerry phones as soon as the employee walked into the workplace. Or, it might choose to bar employees from transferring data on to their micro SD cards when at work.
The BES Express offers 90 IT policy options out of the 450 in the full service.
In the end it's all about cost. Company employees using BES Express can access it for a monthly fee of as low as Rs 399 against the usual Rs 899 for the full-service BES that carrier partners such as Airtel and Vodafone charge.
"We started with Airtel as our first carrier. Now, we have nine. Companies play off one against the other to get the best pricing plans. We have seen companies with as many as four carriers offering BlackBerry services to their employees. It keeps everyone on their toes," says Lalvani.
For the bottom of the pyramid, there is the hosted service targeting small firms with a "pay per user" monthly plan.
When BlackBerry services first came to India, it was usually offered to the executives in the top tier. That's no longer true. Entry and mid-level officials are now being offered BlackBerries so that they can stay connected.
But companies are loth to stump up money for the devices and the services for its entire army of workers. That's where the second part of the strategy kicks in ' and it goes by an acronym, BYOD.
Bring Your Own Devices (BYOD) plugs into a rising trend where employees decide which smartphone they want to use. The benefit for the company is that it allows the employee to pay for the phone. It then configures them so that the employees can access their corporate mails and other enterprise applications.
But there's a downside here: employees may not opt for a BlackBerry at all. Intuitively, RIM has come up with two solutions to make sure that even if it loses on the swings, it can win on the roundabouts. The two solutions ' Blackberry Mobile Fusion and Blackberry Balance ' allow RIM to straddle the smartphone universe.
"We plan to launch Fusion soon. We are building up the channel partners," says Lalvani.
The Fusion is the next generation enterprise solution for Blackberry, Android and Apple iOS smartphones. It enables companies to provide seamless enterprise services across all devices. At the same time, the Balance allows enterprise users to carry only one device to work, which can be synced with all the other devices including laptops and desktops.
The BYOD phenomenon does present one problem. What if the employee quits the company? RIM allows enterprises to wipe the slate clean, preventing the employee from walking away with company secrets and proprietary data.
Lalvani is also gung-ho about Near-Field Communications (NFC), which enables devices to zap information to each other. He gives me a small demo: he places two Blackberry devices back to back and they are able to instantly share data, pictures, anything at all without having to use a cumbersome interface. Bluetooth does this as well: but NFC is faster, seamless and doesn't stutter when sharing large pools of data.
"RIM is going big on NFC. It will enable us to provide a new platform for cashless transactions at stores, for instance. You can pay for your purchases by just holding your smartphone against another device at the point of sale. Here's a situation where we are ready to go. But we must wait for approvals from the regulator (the Reserve Bank of India in this case)," he adds.
RIM knows that smartphones today won't sell unless it can help develop applications that users can access on their devices. "We have a community of about 28,000 application developers in India. They range from mid-size companies to individuals. Some of the apps developed in India have become very popular overseas," says Lalvani.
When the talk turns to the troubles that RIM is going through, the officials go on the defensive.
"We haven't had any job cuts in India till date," says Lalvani. RIM plans to axe 5,000 jobs out of the 16,500 worldwide, which means one in three jobs are now on the line.
"We have not specified the individual markets or departments that will be affected," says Varghese M. Thomas, director, corporate communications for RIM (India and Saarc), in response to an e-mailed questionnaire after my interview with Lalvani which took place just days before RIM came out with its disquieting first quarter results followed by announcements of job cuts and the delay in launching the BlackBerry 10.
In his conference call with analysts on June 28, Heins said the BlackBerry 10 launch had been delayed because of " hitches (in) the integration process into the platform". He had added that he didn't plan to go to the market with a less than perfect product.
Thomas added: "RIM has hired advisers to help the company examine ways to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives."
The Cassandras have already come out with some pretty dire forecasts about RIM's ability to survive. Heins and other RIM officials, however, firmly believe that they will be able to turn the giant around after going through a period of some pain over the next few quarters.
The jury is still out on this one: it will crucially depend on the BlackBerry 10 launch early next year. RIM is certainly looking over the edge. If Heins can pull it back from the brink, RIM could still take the fight to its rivals.