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Canada Needs to Save RIM

CanadarimCanada needs to save Research in Motion, the country’s flagship high-tech company and, arguably, one of the country’s most important economic engines.

Putting aside speculation about who may want to acquire RIM in the wake of Google’s $12.5-billion plan to purchase of Motorola Mobility, the fact remains the Canadian government needs to be pro-active to protect and bolster RIM’s status as a world-class technology company.

Whatever tools at the federal government’s disposal should be used to make sure RIM stays vibrant as an independent company or division of another company with a strong Canadian presence.

As much as I’m not a big believer in government intervention economically, RIM is a special situation because it plays a crucial role within the Canadian economy – not only as a large employer but a company that spins off many start-ups by ex-RIM employees who want to use their expertise and wealth.

If the Canadian government, however, decides not to pro-actively help RIM, it risks having another Nortel on its hands. This is not to suggest RIM is going to seek bankruptcy protection but it may need the government’s help.

For those of you with short memories, Nortel was allowed to disintegrate and be sold off in pieces while the Canadian government did squat other than make some noise about reviewing a few of the deals, which was mostly about political optics.

There was a role for the government to play to keep Nortel alive, even if meant transforming it into a smaller, more focused company. If something had been done to help Nortel come out of bankruptcy protection, Canada would still have a high-tech leader that would employ thousands of people and have a kick-ass patent portfolio.

Instead, Nortel was allowed to die, punctuated by the $4.5-billion sale of its patent portfolio. It was an embarrassing end to a company that had been a global technology leader.

With Nortel’s demise fresh in the federal government’s mind, it should be wise for Ottawa to be pro-active, creative and engaged to keep RIM alive and kicking.

About Mark Evans

I'm the principle with ME Consulting, which provides strategic and marketing services to startups and entrepreneurs. This includes strategic and tactics plans, core messaging, brand positioning and content planning and creation.
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  • http://Marsdd.com Trevor Stafford

    Mark, didn’t you just write a piece on how some startups need to die? It’s just as true for large companies. RIM is rotting from the inside, just as Nortel did. Thus, it can only be saved from the inside. Government intervention will merely prop it up or create a Japanese-style zombie corp.

    As far as spinning off startups, RIM hasn’t created many (Metronome, who else?), and the Kik lawsuit gave us a pretty good idea of how they view that ecosystem, even in their own backyard.

  • http://www.mgraves.org Michael Graves

    The Canadian government can no more save RIM than the buggy whip industry of old. What tools to they have? They can provide money, but money is not what is lacking. They can alter the competitive landscape via regulatory means, but that only impacts the Canadian market. RIM needs much more than the Canadian market to remain relevant.

    RIM needs visionary leadership, and the ability to act to implement their new vision quickly.

    Hey, that about describes what was being discussed a year ago….but it’s not going very well. I suspect that RIM has peaked and will now follow a long, slow fade to black.

    I carried a couple of Blackberries in recent years, including the flagship 9700, but I now use an Android device and can’t imagine going back.

  • http://www.papadopoulosgroup.com Philip Papadopoulos

    If Government intervenes buy providing monies in any form (cash, tax breaks, credits, purchases, etc.) to RIM, than it is taking those same monies from other business and individuals to do so.

    Would you like to transfer some of your success in the form of monies to your less successful neighbour or citizen?

  • http://Spidvid.com Jeremy Campbell

    RIM is in huge trouble, too much ego thinking they can go head to head with the Apple’s of the world. They need to invent the next big mobile product, not compete in the current spaces! And move to Android’s OS already!

  • Rob Campbell

    I fully agree with the above comments.
    First let me start by saying that I wish no one to loose their job to help feed their family and to provide shelter. I would never wish that upon anyone.

    In my opinion, RIM’s problem is 2 fold:

    1. Sitting on the sidelines: While dominating the phone market (and trying to buy a couple of hockey teams might I add), they did nothing but take their eyes off of the horizon. Just because you become numero uno doesn’t mean you will stay there very long. They got caught with their pants down. Their phones used to be compelling, but newer models haven’t really had a huge design shift in their overall appearance. And Tablets are, generally speaking, a product that the everyday consumer wants. Angry Birds and email sell Tablets, not tethering it to your existing BB. Do you think that everyone buying iPads own an iPhone?….nope.

    2. Culture and Public Perception: There is no culture there. Period. Those letters that have been leaked to the Public and Press prove the ‘behind closed door’ scepticism. Yes I’m sure there is the same at Apple or Google, but its harder to believe than at RIM. And the public sees them as done. That in itself is the final nail. Try to convince someone otherwise when all that are around them have their doubts. I meet business BB users EVERYDAY and they say the same thing: “it will be my last”.

    Should the Government help a company that has lacked the internal upper management ability to steer itself in the right direction?….. I think you know what my answer is.
    Yes they employ thousands…but I am more than sure that those people will create some AMAZING spinoffs if doomsday is to come. I do not wish to see those people lose their jobs, but the grey clouds are forming.

    RC

  • http://threadyblock.blogspot.com/ Jason Dea

    In the past couple of weeks I’ve seen two notable blunders from RIM specific to their channel execution.

    First, like many I was surprised when the HTS + Beat Audio deal was announced. But in retrospect, that is exactly the type of partnership that RIM should have been trying to secure to really move the ball forward for them, in terms of changing the public perception of their “coolness” and innovation.

    Second, their carrier channel seems to have all but outright sabotaged their recent product launch of the Bold 9900/9930. The pricing announced by all their North American carriers has both been too high and too inconsistent. How RIM’s channel team has allowed the carriers to both price the device at a super premium rate (both with and without contract) and with such variation (I’ve sen from $149 to $349 with contract) really boggles my mind.

    Come on guys, execution, execution, execution…

    • http://www.lifeintheknife.com Shane

      Exactly, you said it.

  • moosebump

    Mark,
    RIM just earned $700mm while spending $423mm on R&D in their last quarter. They are sitting on $2B in cash. Money is not the problem. So what do you think the government could help with? Just give us one idea because I don’t see any here.

    Maybe they could get Tony Clement to do strategy. He’s pretty tech savvy. He’s knows about Twitter at least. Stephen Harper could do marketing (actually not a bad fit – SH was viewed as uptight and stodgy but still managed to get elected to a majority. That’s kind of RIMs problem – trying to move from stodgy, business focus to hip and cool).

    RIM and its leaders are doing everything they can to save themselves and at this point they aren’t lacking resources. Honestly, what could the gov’t even do (other than make it worse)?

    • http://www.markevanstech.com Mark Evans

      At some point, I suspect RIM may not going to have as much financial clout or flexibility given the competitive landscape. So there may an opportunity down the road for the government to offer things such as loans, tax breaks, etc. I’m also thinking ahead to the day when/if RIM attracts a takeover offer. At that point, Ottawa might – for once – play a more strident role to protect Canadians jobs by making sure RIM’s technology is scraped away over the border. Thanks for the comment. Mark

  • JDarcy

    How exactly would the government help RIM? Just cut them some big cheques? What additional expertise in handset manufacturing does the Government have that RIM doesn’t?

    Can you imagine a meeting between Balsillie, Lazaridis, and some rumpled-suit-black-sneaker wearing bureaucrat?! “Gentlemen, I’m from the Government, and I’m here to help. Let me tell you how to fix your business . . .”

    God help us from Government intervention in the technology sector . . .

  • http://www.lifeintheknife.com Shane

    Government interventions do nothing but provide big paycheques to existing billionaires so they have more time to loot their companies.

    RIM investors need so SACK the management and get some innovative, charismatic, ass-kicking, visionary leaders in there. Like yesterday.

  • maxmz03

    Strange culture in RIM, and self-destroy political environment.

    In RIM if you figure out problem and introduce efficient approach, both manager and his buddy group member will proof their wrong approach works.

    just like someone point out driving a car is right way, pushing a car is wrong way, then both manager and his buddy group member will hate you, and proof that 3 person can also move the car by pushing it.

    This is one side of the strange culture, another side of RIM strange culture is like: because the manager and CEO are buddies as well, so people will say: yes, it is moving, pushing a car is really right way.

    RIM is not system oriented company, just self-destruct small company buddy culture, with a fat body. it is very strange company culture and strange company political environment, RIM’s management may be a typical instance in MBA course.

    CEO may want the management better, but can’t reach the target.