Let’s be real: Anyone who’s been paying attention isn’t surprised by BlackBerry maker Research In Motion’s recent collapse. It’s unfortunate, but it’s been inevitable.
On Thursday, RIM announced its latest bad news: Last quarter’s sales and losses were worse than expected, and its new BlackBerry 10 platform won’t be ready until next year. (Too late.) RIM shares fell some 14% in after-hours trading; they’re down about 95% since mid-2008. And the company will now have to cut some 5,000 jobs, which is sad to hear.
How the iPhone Changed Everything
What happened? Nothing recently. Rather, RIM’s fate started tumbling five years ago Friday: June 29, 2007, the day Apple first started selling the iPhone.
It’s hard to overstate just how much Apple’s entry into the phone market changed things. Apple didn’t invent the smartphone, but it took mobile devices to a new level with the iPhone’s all-screen layout, revolutionary software, touch-based interface and its near-perfect integration.
RIM and its contemporaries saw “smartphones” mostly as phones, with some email and basic web stuff crammed in. But Apple saw the iPhone as a tiny portable computer, capable of running the same powerful operating system and Web browser that a laptop could. So the day the iPhone came out, everyone else was immediately playing catch-up.
How RIM Kept On Going
It was soon obvious – especially after Apple launched the iPhone App Store in the summer of 2008 – that RIM and the BlackBerry were in trouble, completely overpowered by the iPhone. But RIM had a few things going for itself: Huge support from big enterprise customers, which initially laughed at the iPhone; a small customer base to start from, which allowed it to put up big growth numbers relatively easily; a recent entry into the consumer market, which fueled most of its growth after the iPhone launched; a solid email product and plastic keyboards, which early fans loved; and new growth in foreign markets after starting small in North America.
So for years, RIM kept growing and was still profitable, and whenever questions about the iPhone came up, RIM blasted them away with hot air. BlackBerry traveled through Europe, Latin America and the mid- and low-end markets, and was able to show profitable growth. RIM’s first touchscreen BlackBerry, the Storm, was a joke. But it sold well, because its U.S. carrier Verizon Wireless needed something, anything to compete with the iPhone in the pre-Droid days, so it promoted the heck out of it, and RIM benefited.
But RIM was a ticking time bomb: Even though it put up decent numbers sometimes and talked a lot, it wasn’t showing a real plan for the future or phones that could legitimately compete with the iPhone.
When I wrote in 2010 that RIM was the “new Palm,” I wasn’t far off: “RIM appears to be in a very similar position to where Palm was just a few years ago: A high-flying smartphone incumbent, suddenly looking very vulnerable, very quickly, as new competition shoots past it.” My prognosis: “The risk for RIM is that it will increasingly lose the high end of the smartphone market to Apple and Google, and be forced to become a lower-margin, low-end player. And that’s not what RIM investors have in mind for the company.”
Indeed, things started happening. Enterprises let employees use their own iPhones for work email; Android ate away at the low end of the market; the iPad arrived; and Apple supported more carriers around the world. For RIM, which still hadn’t caught up, taking the lead became impossible.
The good news is that RIM still has almost 80 million subscribers, is still selling some phones, still has some big customers (governments, huge companies, etc.), and still has some useful technology for back-end services. In theory, that should be worth something to someone – Microsoft, Cisco, Apple, Oracle, Salesforce.com, Facebook, Huawei, Amazon, etc. The bad news is that the price tag for RIM has been shrinking rapidly. As its technology continues to decay, why pay more than you need to?
When I first argued in early 2009 that Microsoft should buy RIM and make its big mobile bet, I wrote that it would have probably cost $35 billion to get a deal done. Today, RIM is worth less than $5 billion; it shouldn’t take much more than that to bid. (Meanwhile, Microsoft has since realized that it needs to go into the hardware business to make money in mobile.) But what’s there? The cost of cleaning up the mess will be high, and the value of what’s left is low. Three years ago, there might have been a chance to salvage something useful. Today, the scraps are scraps.
In today’s patent-crazy mobile world, it wouldn’t be a shock – especially if RIM’s stock continues to fall – to see a bid by the end of the year. But a sale now won’t be a congratulatory event for RIM. It will simply be the end of a once-strong company that got outmatched and couldn’t come back.
has revealed the list of applicants applying for new generic Top Level Domains (gTLDs) that will redefine how the world navigates the Internet. In total, there are 1,930 applicants, with many new domains being sought by more than one applicant. By the beginning of 2013, Internet users could be visiting sites with domain names such as .app, .blog, .apple or .dev; some of the more risqué names include .sexy, .sucks and .porn.The Internet Corporation for Assigned Names and Numbers (ICANN)
Many of the applicants for gTLDs are very obvious. Microsoft has applied for domain names such as .bing, .azure (its cloud service) and .microsoft. Apple applied for .apple, IBM applied for .IBM and so forth.
Right now, there are only 22 gTLDs that control how users navigate the Internet. Those include .com, .net, .org, and .gov, plus many country-level domains such as .uk (United Kingdom) and .co (Colombia). ICANN stressed that today’s announcement and release of the list of applicants is just the first step. Not all applications will be granted, and many conflicting applicants will have to be resolved.
Amazon, which is applying through its European office in Luxemburg, applied for 76 gTLDs, which will cost the company millions of dollars in application fees. Some of the more prominent gTLDs that Amazon is shooting for are .cloud, .app and .dev. (Amazon will have competition for .app; in all, 13 companies applied for that gTLD.)
The most aggressive applicant was a company called “Charleston Road Registry Inc.” that applied for 101 domain names. Charleston Road Registry Inc. appears to actually be Google. It was the only entity to apply for specific brand domain names such as .goog, .google, .youtube, .gmail, .android and other properties associated with Google. Charleston Road Registry has also applied for many extremely common domain names such as .baby, .blog, .buy, .boo, .lol, .fly, .free, .game and many more. We have reached out to both Google and Charleston Road Registry to confirm whether the two entities are indeed the same thing.
In addition to geographic communities, trade associations, large companies and media organizations (such .abc, .cbs, The Guardian and the Boston Globe), there are many holding companies that have applied for gTLDs. For instance, one of the biggest applicants was Top Level Holdings Limited, which applied for 92 domains that cost nearly $13.5 million in application fees. Top Level Domain Holdings applied on behalf of itself and its clients, looking for common names such as .gay, .green, .home and .hotel. Top Level Domain Holdings is a publicly traded holding company on the London Alternative Investment Market (a subset of the London Stock Exchange) that focuses specifically on consulting and registry services for gTLD applicants.
We could see the first domain names by the beginning of next year. First, there is a 60-day comment period for all applicants, which will be followed by a seven-month objection period. Starting on July 12, each new proposed gTLD will undergo an independent review. That review will examine both the company or entity that is applying for the gTLD and the consequences of the domain name. For instance, the independent review board will be looking at companies such as The Boston Globe to determine if it can properly and technically administer a domain name and what that means to the community it serves. Once domain names are approved, they will be entered into the Domain Name System (DNS) root and become part of the Internet.
Applicants for gTLDs were overwhelmingly from Western countries. North America had 911 applications of the total 1,930. Europe had 611 applications, Asia-Pacific 303, Latin America 24 and Africa 17. That number is actually skewed more heavily in favor of the United States, though, since Amazon, a Seattle-based company, applied through its European office.
nightmare scenario for booksellers, the physical bookstore is becoming a showroom for the online shopper. After casually browsing the tomes in comfort, people will use their smartphone or tablet to buy their choices online at a much lower price. While most booksellers can do little more than fume, Barnes & Noble is not just meeting the threat head on, it’s embracing the change.In what has long been a
William Lynch, chief executive of the New York-based company, told Fortune magazine Tuesday that he planned to have near-field communication installed in Nook e-readers as early as this year. The technology would make it possible for browsers to touch books in the store with Nooks to get more information, such as reviews, and then purchase titles in whatever format they want.
The company declined to discuss its strategy Wednesday. “We haven’t announced anything further,” a spokeswoman said in an email.
The success of Lynch’s idea depends on convincing publishers that it’s in their best interest to embed into their books information-storing chips that the Nook could read. If they agree, then Lynch would move a step closer to merging the physical and virtual words.
Barnes & Noble is in a unique position in having physical stores, an online store and an e-reader. “[The stores] remain a very important advantage for the company – the only retail player in the category with integrated three-channel distribution under one brand,” said Peter Hildick-Smith, president of the Codex Group, a book market research and consulting company.
Even Amazon, which has about 60% of the U.S. e-book market to Barnes & Noble’s 30%, understands the importance of having physical stores. The online retailer has been selling its Kindle e-reader through retailers since at least 2010 and is currently in chains such as Target, Best Buy and Staples (although Target announced Wednesday that it plans to stop selling Kindles).
Balancing Physical, Online Sales is Key to Success
Getting the right combination of the physical and online sales channel is key to survival. For example, Borders sold e-readers from Sony and Rakuten, maker of the Kobo, and had Amazon run its online store. With no connection to the online customer, Borders didn’t have enough to survive. The bookseller went out of business last year.
Barnes & Noble has not made the same mistakes as its one-time rival, and its current strategy actually plays into the habits of book readers. Codex has found that people who own e-readers also buy physical books. “They’re not just pure-play e-readers; they are living in the print world, as well,” Hildick-Smith said.
In a February survey, Codex found that only 2% of book buyers bought only digital books. In general, people read nonfiction on e-readers and fiction in physical books, Hildick-Smith said.
Of course, Barnes & Noble still faces a number of hurdles in its online business. Nearly all Nook sales originate from the company’s 691 stores, which are only in the U.S. The company needs to reach the international markets, which is why Barnes & Noble partnered last month with Microsoft. The software maker agreed to invest $300 million in a new subsidiary comprising Barnes & Noble’s Nook and college bookstore businesses.
Under the deal, Microsoft will develop a Nook application for Windows 8, which is expected to ship this year, Lynch told the financial news agency Bloomberg. The app will take Barnes & Noble’s digital books to consumers in Europe, Asia and Latin America, according to Lynch. Along with selling e-books, Barnes & Noble will also have to sell Nooks, which it hopes to place on the shelves of retailers in other countries.
If successful, Barnes & Noble could become a stronger competitor to Amazon, which has a tremendous head start. The online retailer sells its Kindle e-reader in stores in the U.K., Germany, France, Canada and Australia, and through its website in 175 countries. Amazon also sells books in seven languages.
Despite being the underdog, Barnes & Noble seems committed to putting up a fight by proving that the physical and virtual can coexist and prosper.
Two Twitter accounts associated with Anonymous have claimed responsibility for a denial of service attack on the Interpol website, which is currently out of commission. The international law enforcement agency arrested 25 suspected hackers in more than a dozen cities across Europe and Latin America today. Interpol’s “Operation Unmask” followed what it called “a series of coordinated cyber-attacks originating from Argentina, Chile, Colombia and Spain.”
The @anonopshispano account called for the attack at 1:54 p.m. Pacific time. The worldwide news account @AnonOps first tweeted “TANGO DOWN” at 2:43 p.m. Pacific time. It published a second message five minutes later, proclaiming that “#Anonymous is not a criminal organization.”
Interpol’s statement on Operation Unmask cites attacks on Colombian government websites, Chile’s national library and a Chliean electric company. Police from Argentina, Chile, Colombia and Spain carried out the arrests, seizing 250 computers and mobile phones, as well as credit cards and cash. Suspects ranged in age from 17 to 40.
At press time, the Interpol site is struggling to recover, but it is no longer completely down.
— Anonymous Hispano (@anonopshispano) February 28, 2012
— AnonOps (@anonops) February 28, 2012
— AnonOps (@anonops) February 28, 2012