Chris Umiastowski spent over a decade working as a technology analyst on Bay Street. He now works as an independent analyst and strategy consultant and is blogging from the BlackBerry Developer Conference for the Globe and Mail.
What happens this week will have a big impact on whether I remain a Research in Motion shareholder or not. The venue is the Marriott Marquis hotel in the heart of downtown San Francisco. The event is the BlackBerry Developer Conference, or DevCon for short.
In May of this year, I attended the BlackBerry World conference in Florida. The crowd was bigger than ever. Speaking to developers and talking to employees from RIM’s latest acquired companies, I was convinced that the company was on a successful path towards its own reinvention. Developers that I spoke to were excited about the new operating system, QNX, that RIM had acquired and used to build the BlackBerry Playbook. The bar conversations had shifted from how worried developers were about RIM to how excited they were to try out the new developer tools on this powerful OS.
I bought more stock that week. RIM’s new operating system and the excitement of developers was the clincher for me. And so far? It’s been a very costly mistake. So what has changed between May and October of 2011? Why might I be on the verge of divorcing this stock after 11 years as a shareholder?
Developer excitement seems to have dropped radically. I’ve spoken to several BlackBerry developers who are utterly disappointed by the pace of progress within the company. They’re still waiting for completed developer tools enabling them to build great apps.
Since the Playbook launched in May, the company has still yet to deliver a polished operating system with core applications that we need. Native email doesn’t exist yet. Even simple things are missing, for example proper auto-correction and auto-punctuation on the virtual keyboard, or the ability to delete PDFs from my device after reading them. Or how about bluetooth headphone support? The laundry list of missing features is embarrassingly long.
We’re all waiting on a big software upgrade for the Playbook for which enthusiast site Crackberry.com founder Kevin Michaluk has coined the term “Playbook 2.0”. Internally, RIM had hoped to get this done in time for DevCon, but in typical fashion, it’s late. The big Playbook relaunch is expected in November.
Maybe RIM will share an early version of this big software update with attendees at DevCon. Maybe it will be the big shot in the arm we all need to see to maintain confidence. As a shareholder, I hope so. But I’m not walking in with a lot of confidence. RIM’s execution seems to be getting worse, not better.
When I dig deeper I keep finding signs that top level management does not have the right people in the right place. Too many senior managers with poor track records remain in place. Good examples include the people responsible for years of a horrible web browser, stagnation of the BlackBerry Enterprise Server, and poor developer tools.
Even last week, RIM experienced one of the worst service outages in its history. Most of the world was affected for the better part of three days. Major network services such as Google.com or Amazon S3 never experience these kinds of outages, and I’d argue that if they did, a senior executive’s head would roll. But not at RIM. The same senior people remain in place. It’s not a healthy sign.
Despite the clear negatives facing the company, I’m not throwing in the towel quite yet. I believe the stock will perform strongly in the back half of this year as BlackBerry 7 sales flow into the company’s earnings. But beyond that, I’m looking to find answers about the long term future of RIM at DevCon. The transition to a QNX-based operating system is at the heart of RIM’s future success or failure in the smart phone industry. Developer support, or lack thereof, will play a critical factor.
RIM has a track record for putting on a good show at all three past DevCon shows that I’ve attended. But talking the talk is very different from walking the walk. If I’m to walk away more optimistic about the company, it has to be from tangible results they demonstrate, not plans that they announce.
I’ll be blogging for the Globe and Mail from the show this week. My main focus will be on pressing RIM employees and developers to understand whether or not the BlackBerry brand can compete for the third position in the smart phone race behind Apple's iOS and Google's Android. If they can’t win #3, they may as well go home.
It’s RIM’s battle to lose.