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Mobile computing catches up to RIM's vision

WATERLOO, Ontario (Reuters) - To hear Mike Lazaridis tell it, those who say Research In Motion has gone from innovator to imitator are taking a painfully narrow view.

Mike Lazaridis, president and co-chief executive officer of Research in Motion, holds the new Blackberry PlayBook which is 9.7mm thin as he speaks at the RIM Blackberry developers conference in San Francisco, California September 27, 2010. REUTERS/Robert Galbraith

Rather than falling behind the curve, the white-haired university dropout who co-founded Canada’s top tech company says RIM has patiently waited for technology to catch up with his early vision of mobile computing.

RIM is about to take the next step in realizing that vision, Lazaridis says, as it puts the finishing touches on its new PlayBook tablet, due to be released early next year.

According to skeptics, RIM is coming late to the game, its dominance of corporate communications slipping. They say the BlackBerry maker has moved at a snail’s pace into the nascent market for tablets -- the industry’s hottest new market.

Apple’s iPhone and iPad, plus a slew of devices running Google’s Android operating system, are the consumer gadgets du jour. RIM’s response has been either stagnant or rushed, the critics say.

Lazaridis unsurprisingly disagrees. For him, the PlayBook is the latest in a series of innovations carried in the DNA of the company he founded with Douglas Fregin back in 1984.

The PlayBook is “what we’ve been envisioning from day one,” RIM’s 49-year-old co-chief executive told Reuters in an interview. “Quite frankly, we’re surprised it’s taken them so long to get into the party,” he said, surrounded by model airplanes and a guitar that was a gift from U2’s Bono.

Lazaridis shares the CEO role with Jim Balsillie, who joined RIM in 1992, focusing on sales and finance. That has freed Lazaridis to think big thoughts about RIM’s strategy. Fregin never took an executive position and has since retired.

“We’re bringing all our advantages to this,” Lazaridis said. “I don’t mind being late, as long as I’m ahead.”

Investors seem to agree. RIM’s stock declined 35 percent in the six months before it took the covers off the PlayBook in late September. Since then, the shares have recovered to about $60 on Nasdaq from a trough below $43. But that’s still a far cry from their mid-2008 peak of more than $140.

CROWDED FIELD

Lazaridis knows patience. RIM sold its first BlackBerry 15 years after RIM was born, once email and other systems he explored as a student were staples in the corporate world but well before the term “smartphone” was more than a concept.

But it is a more crowded field these days. The PlayBook -- so far seen only as a prototype in a few stage-managed presentations -- is one among a growing throng of challengers to the consumer-focused iPad. More than 7 million iPads have been sold since it hit stores in April.

RIM has not disclosed sales targets for the PlayBook, some versions of which will sell for less than $500, but analysts forecast between 2 million and 4 million shipments next year.

Samsung, Dell and Hewlett-Packard have launched competing tablets and Acer unveiled devices in three screen sizes last week.

Lazaridis is hoping that a long list of security credentials -- which open doors to government, military and law enforcement customers who consider privacy paramount -- will set the PlayBook apart for RIM’s core enterprise audience.

The 7-inch PlayBook also integrates other features that simply were not available last April. Those include an overhauled operating system courtesy of its QNX Software acquisition, completed in June, and a dual-core processor small enough to fit a mobile device - first seen earlier this year.

“I don’t think there is enough performance without dual-core,” Lazaridis said. “You can’t run Flash, your Web browsing would be slow,” he adds, pointedly naming the Adobe software that powers large chunks of multimedia Web content. The iPad does not support Flash.

“We chose our timing very, very carefully,” said Lazaridis, who -- like Microsoft’s Bill Gates before him and Facebook’s Mark Zuckerberg after him -- did not graduate with his university classmates due to the rapid growth of his company.

Lazaridis did not move far from the University of Waterloo, which he views as the home of RIM’s compression technology, birthplace of its encryption methods and a provider of eager young talent.

A NEW WORLD

But the world RIM lives in has morphed since Lazaridis explored mobile data transfer at the university, whose campus is visible from his functional and wide-windowed office.

The books on his desk hint at his current preoccupations. There’s a textbook on fourth generation (4G) wireless networks. There’s CEO self-help book “The Cycle of Leadership” by Noel Tichy. “How The Mighty Fall” by Jim Collins offers advice on staving off or reversing a company’s decline.

“4G networks are coming online next year, Wi-Fi is ubiquitous ... content delivery is going online, banking is going online and all this stuff needs a secure mobile platform that gives an uncompromising, high-performance experience,” he said.

In this new world of faster and more capable cellular and other wireless networks, data consumption has exploded, and Apple and Android-based devices are sustaining a burgeoning market for mobile-based consumer lifestyle applications.

Other platforms struggle to get noticed, especially by software developers in the tech heartland of California’s of Silicon Valley.

“On the West Coast of the U.S. it is an Android and iPhone game at the moment,” said CCS Insight analyst Geoff Blaber, who said RIM’s newfound support for more coding languages should help it bridge the gap in publicly available apps.

“That is something it has taken them a while to address but they are certainly making up for lost time,” he said.

Meantime, RIM finds solace in the strength of its field of professionals. It has five times as many registered developers as Apple and some 30 times more than write for Android, according to Morgan Keegan analyst Tavis McCourt.

The vast majority build proprietary applications the public never sees -- programs that help on-the-road salespeople, supply chain managers and executives better manage their businesses in healthcare, financial services and other industries.

“I see employees spending less time chained to their desk and more time out with customers, friends, colleagues working in the supply chain, working in the factory, working in sales, working in retail outlets,” Lazaridis said.

For Lazaridis, who moved from factory floor paging systems in the 1980s to interactive pagers in the 1990s and the BlackBerry smartphone in the 2000s, the PlayBook has been a long time coming.

“What we saw was, basically, mobile computing,” he said. “We were running this wireless data system (in the 1980s) ... but the mainstream world was just starting to realize the importance of a PC.”

Editing by Frank McGurty and Rob Wilson

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