Comments on: RIMM Q1 – Deceased feline?

By: shopping

shopping — Sun, 07 Oct 2012 12:01:23 +0000

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By: windsorr

windsorr — Fri, 05 Oct 2012 10:01:03 +0000

I agree with margin. In fact margin would probably have improved if BBM had beem made available on other platforms as one would probably have seen a big increase in users at virtually no extra cost. BUT revenues probably would have fallen off a cliff. This is because there would be no reason to buy the devices anymore. Each device is worth $220 to the company in terms of revenues. I would have thought that an Indonesian user might pay $1 per month for access to BBM ($2r a year). That means for each device sale lost RIMM would have to add 18 usres just to keep revenues flat. This is the problem that faces all hardware makers. They are hooked on hardware heroin and cold turkey is just to painful. I think RIMM had no choice but to keep BBM exclusive to its phones, its the only reason why they still sell handsets today.

By: Francisco Kattan

Francisco Kattan — Thu, 04 Oct 2012 17:01:39 +0000

Could not agree more with your comment: BBM is the crown jewel. RIMM has failed to realize that it is no longer in the platform business. It is a messaging company. Between BBM and it’s enterprise messaging businesses, RIM had a shot at making it. It is too late now, but had RIMM realized this before, it could have repositioned and grow a profitable messaging businesses, including taking BBM to competing platforms to expand its TAM rather than limit it to its own shrinking share of devices. The question is whether RIM could have made up the margin it gets from devices by selling more subscriptions on other platforms and I think so. I wrote about this a while back where I included a back-of-the-envelope margin analysis here: http://franciscokattan.com/2011/03/20/is-rim-in-the-smartphone-business-or-the-messaging-business-time-to-decide/