This one act has probably done more to show the world that RIM is in it to win it than any other so far this year – RIM is staying out of China.

The Huffington Post had a really great article in it yesterday. The article described how Thorsten Heins, RIM’s CEO, has made an operational decision to stay out of China. Specifically speaking, despite the cheap labor and lax environmental laws, RIM’s manufacturing operations won’t be moving there… ever.

The immediate question is, “why is this important?” That’s really quite simple. Historically, it’s been very easy for Chinese companies to “acquire” intellectual property and produce like and/or competing products and services from companies operating within their borders. In many cases, government officials order, intimidate, cajole, or otherwise “make” Chinese workers cough up the information.

Shortly after that happens it’s not been unheard of for foreign companies to lose or be underbid for work because a Chinese organization introduces a like product and wins a contract or business with that illicitly gained information. This is a well-known occurrence for organizations with operations in China.

RIM is in butt-saving mode. Its cutting staff, cutting costs etc., trying to insure that it has enough staying power to release BB10 and the new devices that run it. The one thing it won’t be doing to save money on manufacturing costs.. ? Moving its manufacturing operations to China.

This is huge step in the right direction for RIM; and it may be the first thing they’ve done right this year. This decision protects RIM’s reputation, RIM’s current product line and most importantly, RIM’s customers from rogue Chinese government sponsored hackers running amok through RIM’s enterprise, or YOUR enterprise because the Chinese were able to hack through BIS/BES. It protects RIM’s most valuable asset – its security features. It also protects RIM’s value

Despite the fact that RIM could have saved a great deal of money on operating expenses, Heins has likely saved the company by keeping the company out of China.

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With its stock at an all time low, the Ontario-based company has retained JP Morgan-Chase to help it evaluate its options

Sometimes I really hate it when I’m right. I really do…

Late last year, I pumped out a couple columns on why I thought 2012 was going to be a very, VERY difficult year for RIM. They’ve got a huge set of hurdles to overcome. With layoffs likely to happen at any time between now and the end of the year, employees who aren’t actively looking for new employment are likely setting themselves up for huge problems later on. When a company is tanking, its always better to leave earlier rather than later in my opinion.

Be that as it may, about a week ago, it was reported on Wall Street that RIM has retained JP Morgan-Chase to help it figure out what to do with itself. There’s really only one reason why RIM would hire an investment bank the likes of JP Morgan-Chase – they’re actively looking to shop the company, wanting to identify a buyer sooner rather than later while the company’s stock and assets still have value.

I saw an article on Seeking Alpha that identified three real world players to purchase all or part of RIM or its patent portfolio: Microsoft, Google or Apple. The article’s author, identified only as “kracken,” is correct. There are only three. Some people may wonder about companies like Nokia, Samsung, LG and HTC. The fit isn’t right there.

Nokia, Samsung, LG and HTC are handset makers that play in ecosystems created by Microsoft (Windows Phone), Google (Android) and Apple (iOS). For Nokia, Samsung and the rest to make a play for RIM would mean that they would be interested in throwing considerable capital behind the continuation and evolution of BB10/QNX, and the rest of RIM’s ecosystem, which includes the pitifully received Blackberry Playbook. Even though version 2.0 of the tablet’s OS was fairly well received, its highly unlikely to make an appearance ANYWHERE with any kind of impact that would make it worthwhile to have.

RIM currently has $2.1B in cash and over 78M known Blackberry users worldwide. However, only 20M of those are enterprise level users. With 58M consumer-based users that could jump off the RIM ecosystem for a more viable one in MS, Google or Apple, its clear where RIM’s current value currently lies – its patents.

With Google’s recent acquisition of Motorola Mobility recently completed, its unlikely that regulators would approve the additional acquisition of a set of patents that would likely, and most certainly, create a near total monopoly for Google in the mobility space.

Microsoft is perhaps the second most likely candidate in the list of three, some may think.. As a former, direct RIM opponent in the Push eMail space, it would be very ironic for MS to acquire the RIM Push mail patents (as well as others) when, during the 2002-2004 timeframe, if memory serves correctly, RIM brought litigation against Microsoft for the way Exchange ActiveSync pushed mail and notifications out to a connected device. MS had to change the way Exchange ActiveSync worked, much to the dislike of many. Acquiring the patent would certainly close the loop for MS is that story, but with Microsoft’s flat stock performance over the last 10 or so years, I’m not entirely certain what the acquisition would truly buy them other than a sense of vindication. They’ve already “won the war,” especially if they do, in fact, end up taking 20 or so percent of the mobile market by 2016, as predicted by some analysts. Apple and Google already license Exchange ActiveSync as the back end of both’s abilities to sync with Exchange Servers for mail services. There’s no reason for them to purchase patents for a competing push service when no one else is likely to use it.

From my perspective, the only reason why MS would buy them would be to kill them.

Come back next time, and I’ll finish up the analysis…

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In a mobile world currently dominated by iOS and Android, does the loss and then open sourcing of WebOS really matter?

I’ve been in mobile devices most of my career. I cut my teeth on them. I’ve watched some devices and operating systems grow up, grow old and die. PalmOS, WindowsCE and Windows Mobile are a few. WinMo was killed for Windows Phone, and its totally different.

WebOS with its cards motif was a big step forward and a huge step away from Palm’s traditional PalmOS. The hardware was ok, the OS was pretty good; but Palm lost their momentum and wasn’t able to turn it around.

Palm mothballed the OS and sold it to HP. HP promised to do something with it, but they couldn’t get it together either. They initially decided to let the OS die, but later decided to revive it and open source it. Its been a number of weeks since that announcement. I can’t help but wonder what the impact of that development means at this time.

In a word or two…not much.

HP’s official development and work with WebOS has ended. They’ve given the software to the development community to tweak and use as they like. Right now, there aren’t any CURRENT devices using the open sourced (or any) version of WebOS. Unless a major hardware manufacturer or OEM decides to go that way, you likely won’t see it, either.

So again, what does that mean? Will it make a difference in an iOS and Android dominated market?

I don’t think so. The iPhone is the iPhone and will continue to grow in popularity all over the world. Android will continue in current and new devices, and be as diverse as the day is long. Windows Phone will continue to chip away at both; and RIM will likely disappear,  regardless of what WebOS does or doesn’t do.

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RIM is headed for a very difficult 2012. It seems that it can’t even GIVE it away…

Case in point – RIM has been a huge player in the PDA/Smartphone market for more than 10 years. Its closer to 15, really; but not quite. Anyway, in 2011, it was stated that RIM’s stock lost 75% of their value, and while that loss still leaves them with well over $1.7B in cash, it’s not clear how long that cash will last when they are constantly losing market share to both Apple and Google’s Android. Big decisions need to be made, and made quickly.

One thing is very clear, however – RIM needs to get their act together…quickly.

One thing that really puzzles me is that RIM has turned down acquisition overtures from a number of really big players in the tablet and smartphone markets, including both Amazon and Nokia. They seem to have scared off Microsoft and their interest in the Ontario handset manufacturer more than once. They also don’t seem to care. Their co-CEO’s appear hell bent on trying to right the company. While I applaud them for their tenacity, they really just need to knock it off. The party’s over.

Not only is the party over, but the the BGR reported rumor that sparked a 7% uptick in the company’s stock on 17-Jan-12, has been emphatically denied by Samsung. They have CLEARLY stated they have NO interest in RIM, and have never considered or formally discussed any interest in them. At this point, I not only expect the market to give back yesterday’s ample gains, but for the company to lose additional value in the immediate future’s trading.

Nearly every industry pundit that I know of is predicting RIM’s future to be dismal at best. C|Net’s Buzz Out Loud podcast recent 2012 Prediction’s Show also spelled out a bleak to dismal 2012 for the once dominant RIM.

Everyone else can see it…why can’t they?

Any way you try to look at this, RIM needs to act, and act now if they are going to do save something, anything of themselves. The company lost 75% of its value in 2011…75%! It can’t stand to have that happened again. If their board is paying attention, much of the tech industry is chiming in on their rather pronounced misfortune, and they are making provision for that continued misfortune. Unfortunately, most everyone thinks we are past the water bailing point. According to the industry, the ship is going to sink. It’s just a matter of time, and it’s just a matter of determining how much value for their shareholders can be saved.

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In the Navigating the Mobile Landscape: Ecosystems #1 and Navigating the Mobile Landscape: Ecosystems #2 we’ve been talking about why Ecosystems and mobile devices. The big question that many of you are probably asking is, “Ok… so what’s the big deal? Why do I care about this? We’ve been through Amazon and Google pretty thoroughly.

The one remaining player, Microsoft, has been pretty much out of pocket on all of this. Let’s briefly talk about why.

Bringing it all Together – Where the Heck is Microsoft?
Over the past few years, Microsoft has really struggled with mobility. Quite frankly, it doesn’t know its own butt from a mobile hole in the ground. Its pathetically sad, really. They had this market sown up and they let it slip away from them. Ballmer is a huge part of this problematic equation for Microsoft. He just doesn’t get mobile computing.

When Microsoft introduced Exchange ActiveSync with Exchange Server 2003, as a directed salvo aimed directly at RIM and Blackberry Information Server and Blackberry Enterprise Server, it did more than just hit RIM where it counted the most (in their wallet), it actually won the ecosystem war, really before it started, and didn’t know it.

Exchange ActiveSync (the PIM synching FOUNDATION of the ecosystem) did what BIS/BES did for Blackberry, it did it for all Windows Mobile based devices, and it did it for free, totally undercutting RIM’s revenue model. Today, RIM finds itself nearly unable to recover from this 8 year old wound. To add salt to it, Microsoft has licensed the basics of Exchange ActiveSync to both Apple and Google, bringing push to the iPhone and to every Android device, literally, everywhere.

As for the rest of the ecosystem – music, multimedia, ebooks, pictures etc. – Microsoft sorta had that in place with the Zune and the Zune Marketplace, but killed the Zune a couple years ago. The Zune Marketplace has struggled for any kind of identity since. Microsoft hasn’t cultivated new or tended any existing content distribution agreements that I’m aware of.

Further, Microsoft also killed Windows Mobile in favor of Windows Phone. The platform may be superior to its predecessors from a developer’s point of view, but Windows Phone has failed to gain any real traction with consumers since its introduction. While Microsoft and Nokia have partnered to introduce new hardware on MS’ updated Mango release of the platform, its largely seen as a last ditch effort to save both companies.

As far as a tablet is concerned, Microsoft just can’t seem to get past the, “put the whole OS on a mobile device” stance. No one wants a full blown version of Windows 7 or Windows 8 with its strange metro UI on a tablet. Consumers are telling manufacturers they truly want a companion device, not one device to rule them all, and Microsoft simply isn’t listening.

The best thing that Microsoft can do for itself is:

• Ditch Windows 7/8 on a tablet and pull together a version of Windows Phone that will work on a tablet styled/sized device
• Breathe some life into the Zune Marketplace for music, movies and TV shows. Insure that multimedia store apps are tightly integrated into Windows Phone and Windows Tablet (a working name, for lack of any other)
• Adopt an ereader app and format as its designated platform and go with it. It doesn’t matter what format they choose, but they need to pick on and promote the hell out of it. Please don’t reinvent the wheel or try to bring back Microsoft Reader. It died a long time ago and we don’t need to splinter the ebook market any further
• Develop Windows Live Essentials components for Windows Phone and Windows Tablet. They also need to update Windows Live Essentials for desktop Windows to include the sync support for WLE.
• Give the sh…, uh, I mean stuff… Give the stuff away. Off branded Android tablets are doing well because they’re part of the Android ecosystem; but they’re cheap. The HP Touchpad sold well in the Fire Sale because it will make a GREAT Android tablet and again, they were cheap. Microsoft doesn’t have the luxury of brand or eliteism like Apple does. It doesn’t have the install base like Google’s Android does. It needs to get into the market and saturate it – Buy a Windows Phone, get a Windows Tablet, and vice-versa. That kind of thing. If it doesn’t do this, it may as well not even try. All they’re going to do is create a huge charge and/or write off for the company and their stockholders

Based on all of this, what should you get your loved ones for the Holidays? Come back next time, and we’ll start talking about that.

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