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RIM to exit the consumer phone market

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Having persuaded many a teenager to adopt the BlackBerry, RIM last night gave them the finger - metaphorically - and announced it was focusing on big businesses instead, an action spurred by its lousy quarterly results.

Some say RIM did poorly in the consumer market, but it certainly built up a strong customer base among younger customers, more keen on messaging than talking.

Where RIM failed, it was in the top-end of the consumer market. Here, yes, it was unable to compete with the brightly lit, well-marketed iPhone and the many Android touchscreen devices being promoted by network operators.

Winning over teens is all very well, but they're far less lucrative than the kind of folk adopting Apple and Android phones, a generally much better off lot.

Tightening RIM's focus on corporates shows that the company accepts its failure to take on Apple and co., but as more big firms allow employees to use their own handsets these days - they're the very folk who've adopted iPhones and Android smartphones in their personal lives - there's less opportunity there than there once was.

Hardware, then, is RIM's weak spot. It can't compete in the segments of consumer market where the money is, and enterprise users are no less keen on consumer smartphone technology. They don't want to carry two phones around: a BlackBerry for email, and an iPhone to call family and friends.

Ten years ago, RIM was debating its own removal from handset manufacturing, the notion being that it would focus on server software and client code other phone makers could bundle.

But its hardware margins were too high to resist, and the scheme was knocked on the head. That was an understandable move when it seemed that RIM's keyboard phones were exactly what an email-hungry adult world wanted. But that's no longer the case. It's clearly time to dust off that old strategy. ®

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