Rise and Fall of Research in Motion

Rise and Fall of Research In Motion

The company that invented the Smartphone

5/10/2012

Research In Motion was a small start up in the 80s that became one of the leaders of mobile telephony around the world with the first Smartphone, the BlackBerry. Let's follow the way to success of this Canadian company that turn out to be incapable of maintaining its avant-garde position on the market and that is now risking bankruptcy.

Table of Contents

Introduction 3

Background 3

Reasons of the success 5

The Rise 5

The Take Over 6

Idling RIM 7

The Fall 12

Now what? 15

Conclusion 17

Bibliography 19

Rise and fall of Research In Motion

Introduction

The world of information technologies is a difficult one. To be more precise it suffers from the same symptoms as the business world but at a quicker pace. Rises are quick but more fragile than in other sectors. Examples are numerous after Nokia or Motorola the next victim of this flicker economy could be RIM, the Canadian company designer of the so famous Blackberry. After reaching the 4th worldwide rank in mobile telephony in the first quarter of 2010, RIM has been caught in a downfall, turnover and market shares losses, margin collapse, lay off, QNX, PlayBook failure, and finally the network failure that left the Blackberry users in the dark for 4 days. The result? A share that has dropped from $70 to $20 in a few months. Why this collapse? More importantly from where does it comes from and how far will it go? We will start by doing a quick overview of the company's background before having a more in deep approach of each state the company went through.

Background

Research In Motion was founded in 1984 by Mike Lazaridis and Douglas Fregin in Waterloo, Canada. RIM was created as a consulting business specialized in electronics and computer science. In the following years the company turned its focus on wireless data until it became the leading wireless data technology developer in the North American zone in 1988. By 1996 the company was proficient with pagers and found a way to receive messages on them but also how to reply back through them. Message could now be send back and forth through wireless network. The next step was to apply it to e-mail. At that time Jim Balsillie joins RIM with a $250,000 of personal asset that he put into the company. That year wireless handheld pager was released, the Inter@ctive or RIM 900. This step forward allow RIM to be listed on the Toronto Stock Exchange a year later and gained $115 million at the same time. In 1998 another device was launched the RIM 950 Wireless Handheld.

Finally in 1999 the name BlackBerry was born, it was the name of the wireless e-mail solution proposed by RIM, the BlackBerry Enterprise Server Software (BES) at the same time as the RIM 850 Wireless Handheld. (Therefore the device name later came from this network and never from the story of the phone keyboard looking like strawberry seeds.) It was a wireless handheld computer that for the first time could reliably do two-way paging and basic e-mail. The customer was also able to consult on specific pages basic information such as weather, stock market data or weather and travel information. It was RIM first big success, it had an advantage on its predecessor the 950; it was a small QWERTY keyboard. This handheld device was an instant success. The company was soon after listed on the NASDAQ and raise $250,000 million more.

2000 was the occasion of another fund rising through a share offering of $950 million. RIM released the RIM 857/957 Wireless Handheld that year. But also around that time RIM produced the first device call BlackBerry, the BlackBerry 5790.

In 2001 the BlackBerry Enterprise server software was upgrade to allow automatic wireless calendar synchronizing.

The year 2002 saw a lot of progress and the first BlackBerry that really start to be widely notice on the market. First the BlackBerry 5810, the first device equipped with a GSM/GPRS radio. Then the revolution the BlackBerry 6710 and 6720 that are upgraded device that had switched from a two-way pager to an e-mail capable mobile phone. Bur also the Nextel BlackBerry and the BlackBerry 6750, this last one improving the calling capacity and the bandwidth. The first BlackBerry Web Client was launched that year too; it enabled users to add multiple e-mail account on their device.

From 2003 onward Research In Motion released many devices but they were now in color. Only reflective colors displays in the beginning the full color will come later on. They also now allow international roaming on the GSM network.

2004 is a year for celebration in the RIM Company between its 20 year anniversary and reaching 2 million users worldwide. A leap was done in term of technology with the BlackBerry 7100 that was equipped for the first time with Bluetooth and the first real color screen.

In 2005 RIM reached 4 million subscribers worldwide. Double the previous year. A new phone the BlackBerry 8700 that was really popular. RIM start providing smart card reader for more security with please many private and public organizations.

Since 2001 RIM had had unsettled patent problem with the NTP inc, a company that is a patent troll that concentrate more specifically on the wireless e-mail field. Of course their disagreement is around the wireless e-mail patent. The lawsuit was held in the U.S and the court recognized RIM as a willful guilty part that voluntary infringe the patent. The $33 million damage was increased to $53 by the judge because of the willfulness plus an additional $4.5 million of legal fee for NTP. The Department of defense when against the injunction to shut down RIM network in the US claiming that to many secured communication of the U.S government was dependent of BlackBerrys. In the end in March 2006 after back and force communication both side found an agreement. RIM accepted to pay $612.5 to NTP at the condition that it would end all claims. A lot of analyst declared this settlement to be very low since NTP did not ask for royalties on its patent until the end of it which would have been