Mobile Update: RIM Retains Law Firm in Restructuring Plan

Corey Herscu is the Director of Online Strategy and Alliances at Toronto startup ContactMonkey, a service that makes it easy to share your contact information online. He is also the Founder and Editor-in-Chief of Toronto-based mobile blog TheCellularGuru. Corey is a seasoned salesman with an abundance of tech experience who is passionate about networking, community-building, and Web 2.0 technologies. Find Corey online via TwitterFacebookLinkedIn and ContactMonkey.

After weeks of denial, RIM has indirectly admitted to being in trouble by retaining Wall Street law firm Millbank, Tweed, Hadley and McCloy to work out a restructuring plan that could include selling assets, seeking joint ventures or licensing patents. This is all part of the fledgling Waterloo-based smartphone maker’s strategic review of ways to boost revenue from its new BlackBerry 10 operating system and possibly opening up its proprietary network. 

So what does this mean to you, the disgruntled customer, who so desperately wants to see this Canadian success story thrive again in a market riddled with Android, iPhone and Windows Phone users who have their hands at their ears, tongue-out, taunting you?

It means a number of things, yes. But, most importantly, it means change – real change. Notable change is coming to this dying brand.

RIM posted a $125-million loss in its most recent quarter as it wrote down BlackBerry inventories. Three months earlier it took an even larger hit on its underperforming PlayBook tablet computers. RIM’s stock has plunged 75 per cent in the past 12 months, giving the company a market value under $7 billion.

Bad news like this can’t happen again. And I don’t mean this solely from a business perspective; I am talking morale, too. To have a good team to pull you through the storm, you need positivity radiating through the walls – something RIM doesn’t have right now.

So what kind of change can one expect? BBM on Android or iPhone? Maybe Windows Phone? Doubtful.

The primary concern with this move is the factor of fragmentation – this is something that we heavily experienced in the early days of Android. There will be a multitude of handset form factors, which will become cumbersome for development. Currently, developers already face hurdles due to the multiple platforms pearl, torch, bold, etc. All have different display dimensions, which make for strenuous development conditions. 

Phones today rely heavily upon a strong developmental crowd – if the developers don’t come, the users will stray. Sure, the new operating system will improve upon the fact that their aging java-based operating system offers an unfriendly ecosystem for consumers, but will the fact that it can finally have real applications be enough? It was difficult enough to draw the crowd in the past when RIM controlled the hardware. Now we will be treading into dangerous waters. 

It will be a slippery slope for RIM to rebound back from their shortcomings, unfortunately I’m not sure if that will be one that faces up. 

What are your thoughts on this? Let us know in the comments.