A cautionary tale

What RIM can learn from the 'unbelievable' fall of Nokia from the top of the smartphone market

A cautionary tale

Luke MacGregor/Reuters

For many in the industry, cellphone giant Nokia Oyj’s recent announcement that it will use Microsoft’s Windows Phone operating system on its high-end devices was viewed as a sign of desperation. Despite being the world’s biggest cellphone maker, Nokia has been steadily losing ground in the smartphone wars to Apple’s iPhone and devices that run Google’s Android operating system, while Microsoft, the world’s biggest software maker, has been unable to gain any real traction with its mobile OS. And it’s far from clear that combining forces will do much to staunch the bleeding. “Two turkeys don’t make an eagle,” tweeted Google VP of engineering Vic Gundotra about the announcement.

It’s a stark reminder of how quickly fortunes can change in the tech business—and it should act as a cautionary tale for Canada’s Research In Motion Ltd., which makes the popular BlackBerry. RIM’s global market share has also been slipping (to 16 per cent from nearly 20 per cent last year) as consumers pass over the company’s clunky touchscreen efforts—Storm and Torch—for the latest iPhone or Android-powered device. Ken Dulaney, an analyst at Gartner Research, argues that both RIM and Nokia stumbled as they tried to adapt their existing keyboard-oriented operating systems to touchscreen hardware, instead of building new software from scratch.

The good news is that RIM still enjoys broad support in the business world, where everyone from lawyers to bankers still carries a BlackBerry on their hip. As well, its upcoming PlayBook tablet looks to be a worthy iPad competitor, while its phones are also doing well in emerging markets.

But RIM needs to re-establish itself as an innovator before it, too, is caught flatfooted and is forced to jump into the unknown. “Android came on the scene just over two years ago, and this week they took our leadership position in smartphone volumes,” Nokia CEO Stephen Elop (a Canadian) recently wrote in a lengthy message to employees. He likened the Finnish company’s dilemma to standing on a burning oil platform in the icy North Sea. “Unbelievable.”

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