RIM's PlayBook offers a textbook lesson in how a company can debacle itself

Future b-school students will read about the PlayBook and say, "C'mon, man!"

Well, I downloaded BlackBerry OS 2.0 onto my PlayBook this morning and I have to say: The latest update has only reinforced my belief that the PlayBook has been a case study in how a company can utterly debacle itself by losing focus on its core strengths.

Don't get me wrong, the assorted upgrades that Research in Motion has pushed out for the PlayBook over the past year have made some marked improvements in the device.  One of the updates pushed out last summer, for instance, made it possible for me to hook onto a Wi-Fi network for at least ten minutes without getting booted off.  And today's update adds the cutting-edge technology of delivering corporate email to my PlayBook without having to go through another BlackBerry device.

Why is the PlayBook such a perfect textbook example of what companies should not do when creating new products?  Let us count the ways:

-The PlayBook was clearly rushed to the market.  The success of Apple's iPad took just about every tech company by surprise and RIM was no exception.  By the time the iPad had come out, Apple's iPhone was already taking big, big chunks out of BlackBerry's smartphone share and the release of the iPad seemed to throw RIM into an abject panic.  You can just imagine the emails being fired back and forth between RIM's two former co-CEOs Mike Lazaridis and Jim Balsillie:




The result of such reactive thinking was a half-finished product that lacked native access to corporate email, that lacked a rich variety of applications (the PlayBook just got access to "Angry Birds" late last December fergodssake!) and that lacked any clear reason for existing other than for RIM to say that it had pushed a tablet onto the market.  Oh, and as I mentioned, I had difficulty even maintaining a consistent Wi-Fi connection with the PlayBook for the first few months of its existence.

-The PlayBook took RIM away from its strengths and diverted resources that should have been used for improving its smartphone lineup.  One of the soundest observations made by early economists such as Adam Smith and David Ricardo was that people, firms and countries are at their most productive when they concentrate primarily on doing what they do best.  While this may seem like commonsense, companies frequently forgo this wisdom and try to quickly jump onto whatever tech trend seems to be the hottest flavor of the month without regard to whether it makes sense for their overall business model.  For evidence of this, look no further than HP's borderline-insane decision, which has mercifully been reversed, to spin off its PC division (i.e., its traditional strength) and go all-in on cloud services (i.e., not its traditional strength).

RIM's core strength has long been that it makes solid smartphones with top-notch physical keypads that deliver secure corporate email and that give IT departments an unparalleled level of customization to ensure overall network safety.  Granted, current market trends have made it so that RIM can't just rely on its standard bread-and-butter features alone anymore, but you would think that the company would at least incorporate these features into its new devices, regardless of whether they're targeted toward consumers or businesses.  Needless to say, the PlayBook failed to deliver on this count.

And to make matters worse, the PlayBook inflicted massive opportunity costs onto RIM when it came time to devote resources for improving its smartphone lineup.  As Gizmodo's Brian Barrett noted late last year, the PlayBook has been an open gash in RIM's finances as it inflicted a loss of $485 million in the third quarter of 2010 alone.  If there's anyway to make an argument that the PlayBook has at all been a plus for RIM in terms of either product quality or profitability, it likely involves consuming large amounts of LSD.

-RIM never needed a tablet to begin with.  Or at least it didn't need one right away.  You'll notice that companies such as Amazon waited a good long while before releasing their own tablets onto the market and it didn't impact their ability to make lots of money.  You'll also notice that Microsoft has still yet to release a Windows tablet and it's in no danger of falling off the cliff.  That's because both Amazon and Microsoft were smart enough to know that having no tablet on the market is better than having a subpar tablet on the market.

Let's start with Amazon: It took the company a while to figure out how to take a bite out of Apple but its patience has definitely been worthwhile as the Kindle Fire was the second-most popular tablet behind the iPad in the fourth quarter of 2011.  The combination of having a low price of $199 and delivering deep integration with Amazon's cloud services has given the Kindle Fire an identity that the PlayBook never had.  Likewise, Microsoft has been waiting to release its own tablet so that it runs on an optimized version of its upcoming Windows 8 operating system.  Microsoft understands that its tablets won't be successful if they deliver a significantly inferior experience to what users get on their PCs and the company seems intent on taking its time to get things right.

To sum up: The PlayBook was to the iPad what the Rolling Stones' psychedlic experiment "Their Satanic Majesty's Request" was to the Beatles' "Sgt. Pepper": A reactive product that was hastily pushed out the door out of fear of being left in the dust by a chief rival.  The good news for RIM was that after completely stumbling with "Satanic Majesty," the Stones released "Beggars Banquet," a classic album that saw the band returning to its roots as a country-blues-rock hybrid.  With new management in place at RIM, there may be hope for the BlackBerry brand yet.

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Copyright © 2012 IDG Communications, Inc.

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