Anatomy of failure: Mobile flops from RIM, Microsoft, and Nokia

The error was even more foolhardy given the “consumerization of IT” trend that CIOs have been talking about all year, in which employees bring in their own devices and apps, requiring those devices and apps to work in both business and personal contexts because the line separating the two is rapidly disappearing. In that world, Microsoft and RIM should have kept their business strengths in devices that delivered newfound appeal to personal needs as well.

IT conferences and the blogosphere have been replete with this theme—so how could the people at Microsoft, Nokia, and RIM not aim to satisfy it? Because they often don’t accept that the change is even happening, and they don’t know how to think that way even if they agree it is happening.

RIM is most egregious in this denial: Its executives, from the two CEOs down to product managers, keep saying publicly that apps are a fad, the iPhone is a fad, bring-your-own-device and consumerization trends are fads—that the world will wake up from its madness and re-embrace the BlackBerry as it was. I’ve also heard stories of RIM managers saying they can always retreat to Latin America, a RIM stronghold that somehow is immune from the changes in mobile technology. If you don’t believe in the future, you can’t move into it, much less succeed in it. RIM believes one thing and goes through the motions of another. The result is unsatisfying to everyone. To be fair, I’ve heard through the grapevine that there are people within RIM really do see the new world and want to succeed in it—no company is a monolith, but for now, those with their heads in the sand are prevailing.

Although these vendors have all brought in outsiders and even bought companies with modern technology, their leadership and their staffs remain immersed in the old way. Breaking out of that box is not easy even for creative, “imagineering” people, and executing outside that box is even harder. It’s impossible if you don’t honestly try.

That’s why most companies don’t survive fundamental transitions such as the one we’re going through now. The PC killed off Digital Equipment, Silicon Graphics, and dozens of other midframe and workstation companies; only IBM and Hewlett-Packard made the shift. IBM wisely sold off its PC business to Lenovo just before the PC market got too commoditized, which is why Dell is in trouble and HP is looking beyond today’s Windows PC. E-commerce killed off scores of retailers, such as bookstores. The Internet has been killing off large segments of the music, video, and publishing industries.

It’s a rare company that can pull off the vision, execution, and timing to thrive in such transition. Apple did it, aided by its desperate circumstances and a peculiar culture that honored and encouraged out-of-the-box thinking. The time for RIM, Microsoft, and Nokia to make a real bet on mobile would have been in 2007 (as Google knew and did), when Apple showed the way but before it set the standard—not in 2010 and 2011, when Apple has defined the direction and Google has sopped up the rest of the market.

That’s why any company depending on RIM, Microsoft, or Nokia mobile technology should be working fast and furiously on an exit strategy. Already, large companies are finding it hard to hire young people when a BlackBerry is the only option. I’ve met several CIOs who’ve allowed iPhones and iPads in for that very reason, only to find that it was no big risk after all.

Websites, cloud services, e-commerce, and games are all clustering on iOS and Android, and the best mobile business apps are also on those platforms. This coalescence threatens to orphan businesses that are based on the “legacy” mobile technologies such as BlackBerry (in North America), Symbian (in Europe), and Windows Mobile (in government).

Why Dell, ViewSonic, and the OEM crowd won’t matter—but Motorola may

The success of the iPhone got Google to buy Android and put its considerable financial and intellectual muscle behind it. The result is that Android smartphones are now the top-selling devices (depending on which surveys you believe). They’re not as good as iPhones, but for users familiar with only regular cell phones, they are revelatory.

In any event, only Apple may make iPhones and iPads; it’s a one-sheriff town. Android, however, is available to all, so anyone who wants a piece of the mobile pie could at very little cost join in. Many OEMs were already making cell phones, and adapting them to run Android was a fairly small investment—they jumped in. The problem is that these companies typically have no sense of design or user experience. They don’t really think about users, so all they’d do is have some engineers get a Linux booter, an Android version (any would do), and an existing (often Windows Mobile) device in a lab, then make them all work together. These are Frankenphones, but in an industry where the typical cell phone has a sales life of 6 to 12 weeks, Frankenphones were the norm.

Dell also got into the Frankenphone business, treating its Streak tablets with the same “make them cheap, make them fast, don’t worry about the result” approach that has destroyed its reputation for quality in the PC market.

Never mind that Apple made obsolete the Frankenphone model—when all you make are Frankenphones, there’s nothing else. Any OEM who treats Android as an ingredient in a generic stew will fail. They’ll announce and even ship products, but they’re all about short-term, low-investment opportunities. They’ll fool some people, but they won’t last because they won’t gain loyalty and entusiasm. Google seems to be getting a clue that these OEMs are destructive parasites, not allies, and is rethinking how open it really needs to be.

A few OEMs understood the need to add real value as well. Thus, HTC’s second Android smartphone, the Droid Eris, had an innovative UI that masked some of that generation of Android’s defects. The Eris gave HTC a position in the Android market it never would have enjoyed otherwise. Unfortunately, HTC has’t really followed up and has fallen back into the sea of “who cares?” OEMs.

Samsung traced a similar path with its Galaxy S smartphone line, which boasted more cutting-edge components and a sleeker design than in competitors’ models; it gained a big following last summer. But quality problems began to appear, and it released the Galaxy Tab, a so-so tablet using a nontablet form of the Android OS that ended up looking dowright dowdy compared to an iPad; it also diminished a lot of the company’s luster.

Then there’s Motorola, a company that has had execution and insular vision problems for years. Like Apple in 1999, it has been in serious crisis, recently splitting into two companies. Before that split, it decided to truly bet the farm on Android and to add its own value to the mix rather than just slap Android onto a Razr. Its Droid series has been successful, even with its unloved MotoBlur interface.

Motorola also shipped the first (and still only) real Android tablet, the Xoom, which compared decently to the iPad. It’s a second-class tablet to be sure, but at least it belongs on the train. The Atrix smartphone and its companion Lapdock are really interesting innovations, the only recent Android developments that show the same kind of direction-defining potential as the first iPhone.

But whether Motorola can keep itself together to develop that potential is an open question: Each of its products suffers from inconsistencies that make no sense, given the same company developed them all. These problems suggest insularity and balkanization are still issues at Motorola Mobility.

It really is down to Apple, Google, and maybe the WebOS wild card

Still, it’s possible that Motorola could pull an Apple and be the comeback darling we all celebrate four or five years from now. HP could also be in that position. It’s realized that making generic PCs is a dead-end business, as would making generic smartphones. Instead, it bought Palm for its WebOS and now plans to bring WebOS to smartphones, tablets, and PCs, in a bold move to unify the three types of computing devices. It’s the kind of move that Microsoft could and probably should have tried. It’ll be a stretch for HP, and what HP showed recently for the forthcoming WebOS didn’t inspire me, but at least it’s taking a run at breaking from the past.

Apple is clearly going to be the idea and profit powerhouse in mobile, even if Google has more market share. Google, which seems to be realizing its fully open model could hurt Android, could also be more of a driving force if it figures out how to lead an alliance of strong OEMs (such as Motorola and perhaps Samsung and/or HTC) rather than let the OEMs damage its brand with their “slap it together” mentality. HP may have a shot of being the third engine.

The rest are history. RIM, Microsoft, Nokia, and Dell are all toast in the mobile market—the walking dead who should be looking for burial plots. Mourn them if you must, but it’s time to move on. Don’t get buried along with them.

[Read more of Galen Gruman’s Mobile Edge blog and follow the latest developments in mobile technology at InfoWorld.com. Follow Galen’s mobile musings on Twitter at MobileGalen. For the latest business technology news, follow InfoWorld.com on Twitter.]

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