This thought came to me in at the gym. How can RIM become relevant again?
Sometimes, I like to root for the underdog. I have been rooting for Yahoo for years (short story is, I think a stronger Yahoo = stronger tech ecosystem). And now I’ve reached the point where making fun and beating up on RIM and Blackberry is no longer funny. So as I was resting between sets, thinking about how RIM could make a comeback. How could they get its devices in the hands of more everyday consumers? (BTW: RIM is probably going to lose its government customers)
RIM needs to become cool again. They need a way for people to walk down the street and say, “Oh, that person has a Blackberry.” Headphones. That’s how RIM could do it. Just like Apple did in the mid-2000s with its white ear buds, RIM could do the same with headphones. I was in Chicago the other week and it seemed like everyone had huge headphones on, very similar to the Beats by Dre. I couldn’t name any of the brands on people’s heads other than the Beats by Dre.
Beats by Dre is a cool brand. Dr. Dre, the namesake of the brand, automatically makes them cool. The high quality audio just reinforces the brand. In the most recent Summer Olympics, Beats by Dre dominated the ears of athletes preparing for competition. When you walk around, you can see someone with big headphones on, you can tell if they are Beats by Dre from the distinct “b” on the ears. Beats by Dre is definitely a cool brand and offers status to those who wear them. This is exactly why RIM needs to acquire Beats by Dre.
Being cool isn’t RIM’s only problem. They are woefully behind in the app marketplace. They have a terrible operating system, no developers want to create on the Blackberry OS. Users want apps. Apps are why people use their phones. Actual phone calls are not the main reason why we have mobile phones. It’s the apps. Apps can be useful, they can be sexy, and they can be fun. It gives people something to talk about. Without a strong app ecosystem, RIM has nothing. RIM has poor consumer sales, no cool factor, and a lackluster app ecosystem. So how does Beats by Dre fix all this?
Beats by Dre obviously makes RIM cooler, but the consumer sales are the key. By packaging a set of Beats by Dre headphones with a Blackberry mobile phone, it incentivizes consumers to buy Blackberry phones. Yes, it will cost RIM a lot of money, but Amazon does the same thing with its Kindle Fire. Why? Because hardware is the key to software. By owning the hardware, and getting more users to use your software, you can make more money through transactions. Apple made $1.6 billion from app sales in Q1 2013 and $2.4 billion in iTunes sales. And the app developers will make apps where there are users.
Will this actually happen? Highly unlikely. But RIM doesn’t have many moves left before it goes Pan Am. If I was in charge of RIM today, I would try and make this hail mary of a move. It’s the only way RIM will survive.