April 10, 2012
RIM Looks To US Government To Stay Afloat
Amidst a string of bad news that follows worse, RIM has announced that its government market share is on the rise.
Scott Totzke, RIM´s senior vice president of BlackBerry Security spoke with Bloomberg and said the company´s revenue on sales to the United States´ federal government is increasing on the whole. Barak Obama famously carried a BlackBerry as he was voted into presidential office. Totzke didn´t tell Bloomberg if Obama was still carrying a BlackBerry, but did call the White House a “strategic” customer.
“Compared to the enterprise over the last year and a half or so, the federal business on whole is up,” said Totzke, who also runs sales to the US Government. “The employee base is shrinking, so if we´re looking at a market with fewer employees and our install base is stable to slightly up, that would seem to indicate that we have an increasing market share.”
As part of CEO Thorsten Heins´ new direction for the company, RIM is looking to return to what made the BlackBerry so popular in its early days. BlackBerry phones were once a staple in government and corporate worlds. Now, some government agencies have allowed employees to use iPhone and Android phones to save money and reduce administrative hassle.
In response to this trend, RIM released BlackBerry Mobile Fusion last week. This software will allow IT departments to manage BlackBerry devices alongside their iPhone and Android counterparts. The company is betting big on Mobile Fusion, hoping to make it a major player in mobile-device management in the next few years.
Totzke told Bloomberg he is in Washington 2 to 3 times a month, signaling that the business there in the D.C area is strong and growing. To keep this momentum going, the Canada-based company will make a “significant investment” in marketing in the Washington area, touting the new features of BlackBerry 7, such as better web navigation.
Totzke told Bloomberg, “We need to help customers understand what is possible” with their devices.
As for hardware, Totzke said RIM sold 400,000 devices to the US federal government in the past year, winning more business from new customers and upgrading existing customers to new devices. In fact, Totzke said about 40% of RIM´s DC customers had upgraded to new BlackBerrys' in the past 12 months.
News hasn´t been good for RIM lately, and their stock prices reflects it. Currently trading at $12.98, their stock has lost 77% in the past year alone.
BlackBerry shipments have dropped 80% globally compared to last year. BlackBerry 10, their newest operating system and line of phones, is expected to be RIM´s hail-Mary attempt to add new business, but its delays are promoting anything but hope for their future.
Only time will tell if the governments 400,000 phone shipment, in addition to RIM´s heavy marketing in the D.C, area and mobile fusion software will set the company aright. To his credit, Heins has been making moves in accordance with his newest vision for the company. Speaking in an earnings call in late March, Heins said, “We believe that BlackBerry cannot succeed if we tried to be everybody´s darling and all things to all people.”
“Therefore, we plan to build on our strength.