Research In Motion interview: Andrew MacLeod

Research In Motion's latest version of its BlackBerry smartphone marks the...
Thorsten Heins, the president and CEO of Research In Motion, the Canada-based manufacturer.
Thorsten Heins, the president and CEO of Research In Motion, the Canada-based manufacturer.

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Inside RIM building 8 sits a glass showcase featuring row upon row of old, bestselling BlackBerry smartphones and a three-year-old award that lauds the phones’ creator – Research in Motion – as “company of the year.” This manufacturing centre also houses guards who scrutinise visitor credentials and oversee an airport security-like area, where incomers must leave all of their electronic devices and any recording equipment. Even then, few people typically get clearance to this stage, let alone through a subsequent set of gates to see what the latest BlackBerrys look like behind closed doors.

RIM Building 8 is just one of the many sites sprinkled throughout Waterloo, Canada, where RIM’s shrunken employee base is desperately trying to create the next bestselling smartphone and survive a mobile era now dominated with software and handsets from Apple, Samsung and, increasingly, Google. On January 30, RIM’s new BlackBerry 10 software and phones will be unveiled in a global event that even senior executives at the company acknowledge will be a make-or-break moment.

“Failure is not an option,” Andrew MacLeod, managing director for RIM in Canada, says, in an exclusive interview with Arabian Business. “Our space is defined by innovation. It’s defined by competition,” MacLeod adds. “The good news, from our perspective, is we’re really bringing something special.”

RIM’s shareholders are certainly banking on hopes that this rings true in the marketplace. Once the tech titan of the smartphone sector, RIM’s stock slumped below (Canadian) $7 a share in 2012, down from a peak of more than $148 in 2008. At the same time, a growing number of businesses and organisations have announced plans to ditch the BlackBerry and embrace competing handsets. And, in December, RIM got yanked from a list of companies that make up the NASDAQ-100 index.

Yet there have been some recent signs of optimism as well. Some tech analysts have been upbeat about RIM’s prospects, at least for the short term, and takeover rumours have helped boost confidence among some investors. The company also boasts a loyal, albeit shrinking, fan base of customers who are eagerly awaiting a new device. “I purchased my first BlackBerry in 2006, and have had three BlackBerrys so far, and am just about to buy my fourth,” says Claire Mockridge, a postnatal fitness expert from Derbyshire, England.

One of RIM’s strongest markets in the world is the Middle East. More than double the number of subscribers from the region signed up for BlackBerry service through May of 2012, compared with the same period a year earlier, according to the company. “Middle East has been, really, a key region,” says Mike Al Mefleh, director of product and platforms for RIM Middle East. “We are contributing in a big way to the success of the BlackBerry.”

RIM plans to focus even more attention on expanding its presence within the Middle East. Dubai, in fact, is set to be one of just a handful of cities that will host parallel events during the new BlackBerry software and handsets unveil at the end of January. The decision has local retail executives hoping the buzz will generate a surge in BlackBerry sales among all customer segments – and not just busy business types. Nadeem Khanzadah, head of retail for Jumbo Electronics, says the forthcoming BlackBerry 10 devices “look promising in terms of sales.”

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Other retailers are a little less certain about whether RIM’s new products – which will include a model that feature a touchscreen, then later another that will boast a physical keyboard – can appeal to all kinds of customers. “Sales have been dropping on BlackBerrys and are now almost exclusively bought from us in bulk by companies, not by individuals anymore,” says Julien Pascual, the chief executive and founder of EmiratesAvenue.com. “I hope that [RIM] will come up with a great new phone. I hope it for us, but for them too.”

Drive through the city of Waterloo and it becomes all too apparent how much RIM has grown since it was founded here nearly 30 years ago. No fewer than four RIM buildings crowd the intersection of Columbia Street and Phillip Street, while another half-dozen are scattered just a short distance away. In 2009, the company expanded into another part of the city as well, opening its Northfield Campus, which boasts an additional four buildings as part of RIM’s global headquarters. At its peak, the company employed around 20,000 employees worldwide.

“We’ve seen it evolve into a global corporation,” says Brenda Halloran, mayor of the city of Waterloo, who is speaking, of course, from a BlackBerry phone. “They’re really an important company in our community.”

Indeed, RIM’s co-founders – Mike Lazaridis and Jim Balsillie – have seen their names plastered on various buildings throughout Waterloo after donating more than $150m combined to various technology, research and other initiatives. Communitech, a not-for-profit that supports more than 500 tech firms in the Waterloo Region, has continued to receive mentoring support and financial sponsorship from RIM for educational and networking events, “even over the last couple of years when they’ve been going through some changes,” says Steve Currie, Communitech’s vice president for venture services. Even a local gourmet bistro, The Works, has paid homage to RIM by naming one of its burgers after a popular BlackBerry text-messaging feature. BBM Burger, as its known on the menu, sells for a fraction of a smartphone: (Canadian) $11.98.

But RIM has suffered plenty of hiccups in more recent years. During the GITEX technology show in Dubai in 2011, many exhibitors and attendees groaned about service outages when their BlackBerrys stopped sending or receiving emails. The problem also plagued millions of customers in other parts of the Middle East and Africa, as well as Europe and South America. Complaints then arose from users in Canada and the United States. Similar issues resurfaced in 2012 – on the very day the iPhone 5 went on sale. (“We’ve certainly made significant investments in our operating infrastructure,” MacLeod told Arabian Business in response to the complaints. “Certainly we never want to see outages.”)

For some customers, though, it’s too little too late. Richard Maun, an author who writes business books from Norfolk, England, remains a devoted BlackBerry fan – but certain colleagues of his no longer are. Some of them who work at the National Health Service were “blind” when RIM’s service outage crippled their devices, “and given that it’s business critical the risk was too great to repeat and people switched,” Mr Maun says.

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Other customers have also turned to alternative devices, allowing rivals to grow rapidly in this space. Take Google, for instance. The number of its employees at the company’s big blue, yellow and red building in Waterloo – which still sits within eyeshot of RIM’s Northfield Campus – continued to expand as the BlackBerry lost its lustre. Workers at Google eventually moved to another building as the popularity of the search engine’s Android software exploded.

Around the same time, RIM seemed to be imploding. Both Mr Lazaridis and Mr Balsillie exited the company they started when, about a year ago, they stepped down as co-CEOs.

RIM has also been cutting thousands of jobs in more recent years. The reduction is set to leave just 11,500 workers globally by the time the layoffs are complete, calling into question what may happen to partially vacant RIM buildings in Waterloo. (A final decision on that front is still being evaluated, one spokesperson said).

Execs at RIM are now busy putting together the final touches on what they are positioning as a line of BlackBerrys for everyone. During a demo of the new BlackBerry 10 software at the Communitech Hub in Waterloo, Jeff Gadway, RIM’s senior manager for product marketing, notes that the programme was designed to help an underserved population: people who want to be “hyper-connected socially, using a lot of social networks, and crazy multitaskers”.

More specifically, the software’s interface is designed so that instead of opening an individual app to access, say, email then calendar appointments, each one is left running all the time and is more quickly accessible with a swipe of the finger than competing smartphones. Another feature, called BlackBerry Hub, lets users manage all of their conversations – tweets, emails, Facebook status updates and more – from a single screen.

Meanwhile, an innovative “time shift” option can splice together different moments captured before, during and after a photo is snapped so that no one is left blinking or frowning in a final edit that mashes up reality.

MacLeod says RIM is taking a “reinvented approach” with its latest software and phones. But will it be enough to help the company catch up to, and beat, its competition?

In Communitech Hub’s dedicated space for RIM execs and mobile app developers, there’s constant reminder of just how far rivals have come in this sector: only a few feet away from beanbag chairs prominently branded with “BB,” for BlackBerry, rests a plush couch pillow emblazoned with Google’s little green robot, Android.

 

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