For awhile now we’ve heard whispers of Research In Motion in negotiations to license the BlackBerry 10 operating system. RIM’s CEO, Thorsten Heins, confirmed during an interview that they are still considering a licensing, but that it might be only for low-end devices.
A recap of the interview, Heins said, “We don’t have the economy of scale to compete against the guys who crank out 60 handsets a year. We have to differentiate and have a focused platform. To deliver BB10 we may need to look at licensing it to someone who can do this at a way better cost proposition than I can do it. There [are] different options we could do that we’re currently investigating.”
“You could think about us building a reference system, and then basically licensing that reference design, have others build the hardware around it–either it’s a BlackBerry or it’s something else being built on the BlackBerry platform,” explained Heins. “We’re investigating this, and it’s way too early to get into any details. We have to also model this from a finance perspective–that’s why we’re working with the financial advisers to see, if we do this, where it would take the company. Either we do it ourselves or we do it with a partner. But we will not abandon the subscriber base.”
Going the licensing approach would vastly separate RIM from its previous business model. InformationWeek has put together some pros and cons of a potential BlackBerry 10 licensing:
1. Form Factor Choice. Allowing multiple manufacturers to have a shot at making BlackBerry smartphones would lead to a wide range of different devices and form factors. This would be a boon for consumers, allowing them to pick the device (touch, QWERTY, touch+QWERTY) that suits them best.
2. Larger User Base Potential. With more devices from which to choose, consumers could be tempted to return to the BlackBerry fold, especially if killer services such as BBM are integrated into all the handsets and not only those sold by RIM.
3. Focus On Software. By tapping into the hardware prowess of others, RIM could sit back and really focus on the platform itself. RIM has been working hard to get BB10 to market, and it has delayed the release several times already. Allowing the company to put more resources behind the software–which, let’s face it, is the real differentiator here–could lead to software that is much more powerful and refined.
1. Brand Dilution, Loss of Control. Letting other OEMs make BlackBerrys would dilute RIM’s branding, or at least set it in an entirely new direction. It would also force RIM to give up the control it has over the entire BlackBerry ecosystem.
2. Developer Headaches. One thing RIM prides itself on is a strong developer support organization. That could change if developers suddenly have a multitude of screens, processors, radios, and other hardware elements to contend with. Perhaps RIM would have to set guidelines similar to those mandated by Microsoft with its Windows Phone hardware requirements.
3. Lost Revenue. About 70% of RIM’s revenue comes from sales of its BlackBerry handsets. That’s the majority of the company’s income. There’s simply no way RIM could recover that lost revenue through licensing fees. The company would be competing with its licensees for hardware sales.
Do you agree with the pros or cons of BlackBerry 10 being licensed out? Sound off in the comments and let us know!