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January 24, 2012

After many months that company shareholders wanted to kick out the two co-CEOs at Research In Motion (RIM), Jim Balsillie and Mike Lazaridis have finally agreed to step down from the company, but many wireless industry analysts are still wondering if that will even make a small dent in the company's day-to-day operations, given the dismal short-term outlook the company faces.

As things stand now, Lazaridis still hangs on, at least for now, as vice-chairmain and gets control of a new Innovation Committee within the company, while Balsillie has to accept a lower board position. This time, the new and *single* CEO is former COO Thorsten Heins, as he takes over the helm of the struggling company.

RIM sales are now down significantly, and shareholders are calling for many changes, but while the company has a new leader, the thoughts inside it look very similar to those it just replaced, and anyone expecting a change of direction will be sadly disappointed, some say.

That may be simply because Heins was chosen by those he succeeded, but speaking to reporters late yesterday, Heins repeatedly emphasised the decisions made by those he was replacing, to the point where one might wonder why they were being replaced in the first place.

Some say it was just a minor cosmetic modification to the company's board and not much change will be made in the day-to-day management of the company, since Balsillie and Lazaridis will still probably call all the shots, just like before.

Heins called his predecessors "visionaries" who "pioneered the smartphone industry" and "took a bold step" in buying QNX Software last year which (it turns out) was "the right path to go down". There were "bumps on the road", but "we are strong today because of what we've been though".

Plans for the future are limited to "continuing to develop customer-focused products" and "make sure employees have the tools available to help them succeed," he told reporters.

However, there was much more along those lines, like some innuendo comments delivered in scripted monotone. When asked directly what he was going to do to turn the company around, Heins claimed that the company didn't need *any* turning around, only greater "market communications" and even that was just for the U.S.

The only point on which Heins was adamant, and showed any trace of emotion, was scotching any talk of divesting itself of certain parts of the business and/or breaking up RIM into two or more entities. He was "prepared to entertain" licensing BlackBerry 10, but given that it's not even out yet it's difficult to imagine who would be interested in taking a licence.

Overall, the Canadian company has beheaded its board to show shareholders that it can change, only it hasn't changed and is still betting everything on BlackBerry 10, the new platform based on QNX, which will arrive on the PlayBook supposedly sometime in February.

So, the face at the top might be different, but the company remains unchanged as far as most of the people Wireless Industry News has contacted yesterday and today. It will be interesting to see if and when any positive changes will be made at RIM and if they can rapidly turn around the beleaguered company from Waterloo, Ontario.

Time is running out fast for RIM and the company's shareholders are very impatient and demand changes now, not next year. And that, we can certainly understand. So the question is, will Heins understand it?

In other mobile news

The bad news never seem to be ending for Clearwire. The struggling mobile operator said earlier today that it has stepped up its efforts to get more wholesale customers as it braces for the loss of its largest customer, Sprint Wireless, which is phasing out devices that use Clearwire's WiMAX outdated system in favor of Sprint's shiny new LTE network.

Now Clearwire has hired a research firm to reduce the "time to market, effort and cost" of using its WiMAX network for companies that want to resell the service under their own brand, commonly called in the wireless industry "mobile virtual network operators" or MVNO for short.

The research firm is Simplexity, and it claims that this will make it easier for companies to resell Clearwire's service by handling logistics such as sales and order acquisition, activation and provisioning, distribution and logistics, billing and mobile subscriber lifecycle management, customer care and management analytics.

"Simplexity's ability to offer MVNE (mobile virtual network enabler) services adds a new level of choice and flexibility to the equation, and will make it even easier for potential wholesale partners seeking a simple back office solution to support their 4G product offerings," said Don Stroberg, president of Clearwire's wholesale business, in a statement.

Simplexity is now Clearwire's preferred provider of services for its wholesale customers, though companies still have the option of going directly through Clearwire. The service provider handles websites that sell wireless products for a number of top brands, including RadioShack, Target and Motorola.

It also owns and operates Wirefly.com, which claims to be the Internet's largest authorized retailer for wireless phones and service plans.

Overall, Clearwire has a limited number of wholesale clients, but depends on those customers for the bulk of its revenue because of its comparatively weak direct-to-consumer business. Yes, some have already said in the past that this could be a weak business model, and time will tell.

Its wholesale subscribers outnumbered its own retail customers by eight to one at the end of the third quarter-- 8.22 million wholesale subscribers to 1.32 million retail subscribers, and wholesale revenue accounted for more than one-third of its sales.

In comparison, Sprint smartphone users account for the majority of Clearwire's wholesale subscribers. Interesting market segmentation if there is any.

And recent developments have put Clearwire's wholesale subscriber base under a lot of pressure, as reflected in the price of Clearwire's stock.

Time Warner Cable and Comcast said in December that they would eventually stop offering Clearwire's WiMAX service because they had signed an exclusive contract for access to Verizon Wireless' LTE network as part of their multi-billion-dollar AWS wireless spectrum sale to the mobile operator.

For its part, Sprint also plans to stop selling phones that run on Clearwire's network by the end of this year but isn't completely ending its relationship with the WiMAX provider. Sprint will eventually lease extra LTE capacity from Clearwire, which plans to overlay its WiMAX network with TD-LTE in some high-traffic areas, even though some wireless industry observers say that may not be a good idea.

United Online said in November it would start using Clearwire's network to offer mobile broadband service under its NetZero brand. The product was slated to hit the market early this year but has not yet been launched as of yet. We are still awaiting news from United Online on that.

In other mobile news

According to new numbers published by research firm Ovum, Android is poised as the OS of choice for many developers, but still, almost all mobile app developers will support iOS as well as Android, nevertheless. sGoogle's Android platform will become the preeminent platform for developers over the next twelve months. Ovum's call comes as Android continues to bring in more market share as more and more companies use the platform to crank out a whole slew of new mobile devices.

While iOS has seen its market share growth slow a bit in the recent years, it has always been seen as a more lucrative location for app developers to make money. As a result, most apps came to iOS first, and the other platforms second, Android being no exception to this.

But this could all change in the coming months, Ovum said. Android's prevalence is getting harder and harder to ignore, and app developers have incorporated new business models such as advertising and in-app purchases to spruce up revenue.

Ovum also said that there is growing developer interest in Windows Phone and BlackBerry OS. The results come as both Microsoft and Research in Motion attempt to lure developers over to their respective camps, for what it's worth that is.

"The growing momentum behind Windows Phone indicates that Microsoft has managed to convince developers that its platform is worthy of investment. Its main challenge right now is to persuade consumers," said Ovum analyst Adam Leach.

The Ovum research also reveals that app developers are abandoning mobile-centric app development tools such as Java, Flash and WAP, and moving to HTML 5, a Web-based standard that can run across multiple devices and platforms.

In other mobile news

For the past year now, Apple has been the exclusive adopter of an interface technology called Thunderbolt, and it's the sole reason why its displays are different and do look better than the ones from its competitors.

Developed by Intel, Thunderbolt is now used on Apple's Mac computers, the iPod, the iPhone and now the iPad. While it's still unclear whether Thunderbolt will catch on in a big way, the fact that Apple has first-adopter status is one reason other device makers are taking a serious look at the technology. Recent reports are suggesting that Acer, Asus and now Lenovo are moving to adopt Thunderbolt. And many more are expected to follow suit, notably Samsung and Motorola.

But Apple's standard-setter status is particularly conspicuous in display technology, according to Richard Shim, an analyst at DisplaySearch. He points out to the probable adoption by Apple of Sharp's IGZO (Indium Gallium Zinc Oxide) technology in its future iPads.

"And for Sharp, IGZO is a big deal," said Shim, in a phone interview this week. If Sharp can make those displays in commercial volumes for Apple, IGZO may become an industry standard for the next-generation of displays, not to mention a licensing bonanza for Sharp.

IGZO's potential benefits include improved brightness at lower power consumption levels for very-high-resolution displays, according to Shim. That would, of course, include the rumored 2,048-by-1,536-pixel screen on the iPad 3.

Whether Sharp is able to supply the IGZO display at volumes that Apple needs for its upcoming spring iPad update is still uncertain at this time. But one thing is sure-- Apple has invested significant sums of money in Sharp's manufacturing facilities. So will Apple adopt it later rather than sooner?

"Sharp is the only one that can make those IGZO displays," said Shim. And how would this technology cascade into mass-market adoption? A couple of recent examples may provide some guidance.

"IPS was marginal for a long time, and largely ignored until Apple said it was important," added Shim, referring to In-Plane Switching technology, now trumpeted by virtually every display supplier because of the viewing angles it provides.

"All of a sudden, a moribund technology became important in the market," he said. As was so often the case with Apple, the late Steve Jobs was the proselytizer-in-chief. "IPS was really ignored in the notebook market and was written off until Jobs started talking about it on stage," according to Shim.

But nevertheless, that's not to say that IPS display technology was unknown in professional display circles before Steve Jobs touted its virtues.

And the same can be said of Corning's Gorilla Glass technology. "Gorilla Glass was not a big deal. In fact Corning didn't even know what to do with it when it invented the technology back in the mid-sixties. Then Jobs called up Wendell Weeks, CEO at Corning and said, hey, I want to use this glass. Then all of sudden it becomes popular," said Shim.

Of course it would be remiss not to mention the Retina display on Apple's iPhone 4 and 4S, a major selling point for both devices. And that appears to be what Apple is trying to achieve with the next iPad, though it will not have the same pixel density of the iPhone's Retina display.

Apple isn't the only company with the clout to move hardware standards into the mainstream, though. Intel is capable of this and so is Samsung. The former, with technologies like Wi-Fi and now the ultrabook. The latter with display technologies like Super AMOLED.

But Apple's status as the most influential consumer-electronics product company in the world, gives it an unrivaled ability to establish a few de facto standards, and it appears that IGZO, Gorilla Glass and Thunderbolt technologies could be three of them to begin with.

So, will IGZO make it into the iPad 3? And if commercial production of IGZO is running late, will this push out the release date of the next iPad or will Apple turn to its tried-and-true suppliers LGD and Samsung for more traditional displays?

Those two suppliers are probably capable of making 2,048 by 1,536 displays in the large volumes that Apple requires. Which means 2,048 by 1,536 will likely become the next resolution standard if it lands on the iPad 3, regardless of whether IGZO makes the cut.

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Source: Research In Motion.

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