From what we can see — and assuming the video is not fake, which I don’t believe it is — the phone dismisses any hardware buttons on the front of the device. Some navigation gestures appear to start from off of the phone screen, much like the gestures used on RIM’s BlackBerry Playbook tablet.

The video also shows the new platform’s ability to multitask and seamlessly find all communications for any particular contact, something that RIM is likely to point out as a key strength compared to other platforms. Additionally, there’s a glimpse of the apps that may first appear on the operating system: Foursquare, FaceBook, Twitter and LinkedIn all make an appearance.

One aspect that surprises me are the two ports on the side of this alleged BlackBerry phone. These would be used for charging the device and connecting it to any external data or video source: think computer or monitor. Any dock for this design would require the phone to be in landscape mode, which isn’t a problem, but is generally different than other handsets. We’ll find out more about those, and other aspects of the new handset line, in January when RIM reveals all.

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Research In Motion can possibly put an end to the ban before it even begins by working out a royalty rate with Nokia. Per the filing, Nokia says “[RIM] is not entitled to manufacture or sell products compatible with the WLAN standard without first agreeing with Nokia on the royalty to be paid for its manufacture and/or sale of subscriber terminals compatible with such standards.”

The timing of a potential sales ban is about the worst it can be for RIM, which is struggling to rebound from its lost smartphone dominance. Demand for smartphones is on the rise — more handhelds are sold than computers, for example — but RIM hasn’t benefited from such demand. Consumers, and even enterprises, have opted for phones running iOS or Android.

RIM hopes to turn things around early in 2013 with the release of new smartphone products and its BlackBerry 10 platform after a mostly failed attempt at making BlackBerry touch-friendly two years ago. Until that happens, the company needs to sell handsets and add users to its BlackBerry services in order to maintain any of the momentum it has. A sales ban on current devices would blunt that momentum before BlackBerry 10 even arrives.

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These aren’t great numbers considering RIM did $4.2 billion in revenue in the same period last year and raked in $329 million in GAAP income. And it may have more to do with weak expectations after successive bad quarters from RIM. But the numbers are up from the last quarter when RIM announced revenue of $2.8 billion and posted a loss of $518 million.

RIM shipped 7.4 million BlackBerrys in the most recent quarter and 130,000 PlayBooks. That’s down from a year ago when RIM shipped 10.6 million BlackBerry smartphones and approximately 200,000 BlackBerry PlayBook tablets.

The company’s cash is sitting at $2.3 billion, up $100 million from the previous quarter. That’s going to be key for RIM as it tries to ride out this transition to BlackBerry 10, its new operating system that won’t debut until early next year. Earlier this week, BlackBerry announced its subscriber base increased to 80 million subscribers globally. The company said it expects to report an operating loss in the coming quarter.

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How much will the addition of cellular connectivity help RIM’s floundering tablet sales? Not likely very much, if any at all.There’s a couple of problems with this product update, if indeed, the reports are accurate. As has been the case with RIM of late, the main one is timing, although I question the company’s priorities as well. Where is BBM for the PlayBook without using the Bridge software and perhaps more importantly, why not focus instead on getting the new OS on phones sooner?

For what was once a leading phone maker to take this long to integrate mobile broadband capability into a mobile device speaks volumes about the problems at RIM. And when RIM took the first steps 18 months ago to add cellular data connectivity to the PlayBook, it initially chose to do so for Sprint’s WiMAX network; another poor choice as the carrier is moving on to LTE. Sprint eventually cancelled that PlayBook model.

Some few will appreciate the addition of LTE in a PlayBook, but I doubt RIM will see a significant sales boost because of it. One only has to look at the last two years of research to see that RIM’s resources would be better devoted to improving the device’s software and app selection; not the cellular radio integration. Earlier this year, industry analyst Chetan Sharma found that 90 percent of all tablets sales in the U.S. last year were Wi-Fi only models. Essentially, RIM is — at best — likely targeting a small percent of the tablet market, made even smaller by those who want a PlayBook in the first place.

Perhaps a simple question sums up the problem with RIM’s reported approach. How many people do you know that wanted a PlayBook but passed on it solely because it didn’t have a cellular radio?

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The company also announced 5,000 job cuts as it tries to trim costs. That’s a 30 percent cut of RIM’s workforce of 16,500 employees as of March. But the bigger news is the delay of BlackBerry 10. The company has been struggling through delays of previous products and can’t quite seem to get its act together. This new delay will only give rise to more concern that RIM is finished and won’t be able to mount a comeback against Apple and Google.

In the same month in which Apple showed off iOS 6 and Google debuted Android 4.1, the last thing RIM wanted to do was announce that BlackBerry 10, which is based on its QNX platform, wouldn’t make it to market on time. The company is saying it will now appear in the first quarter of next year. I don’t know how RIM survives this and it really does make you wonder how much urgency the company feels in making this turnaround.

The company announced that revenue came in at $2.8 billion in Q1, a 33 percent decline from $4.2 billion from the previous quarter and a 49 percent decline from the same period last year. RIM posted a loss of $518 million or $0.99. Even excluding special items, RIM’s adjusted loss was $192 million or $0.37. Both figures blew past the expectations of analysts, who were expecting revenue of $3.1 billion and a loss of 3 cents per share.

RIM had shipments of 7.8 million BlackBerry smartphones and shipped 260,000 BlackBerry PlayBook tablets. That continues a downward trend from the previous quarter in which RIM moved 11.1 million smartphones.

RIM’s CEO Thorsten Heins said on a conference call the delay to BlackBerry 10 came about because the task of integrating so much code for the new operating system proved to be a more difficult than previously thought. Heins said he was committed to delivering a high-quality product and was set on not pushing ahead prematurely.

“I will not deliver a product to the market that is not ready to meet the needs of our customers,” he said. “There will be no compromise on this issue.”

But he admitted the next few quarters would be challenging as RIM weathers the platform transition. That’s an understatement. RIM will have to keep pushing BlackBerry 7 devices, trying to convince existing users to upgrade now instead of waiting for the even better BB10. New users will also get hit up but with so many great option in the market available now from Apple, Google and even Microsoft, it’s a tough sell jumping on to a dying platform when you can buy something state of the art.

But even selling those devices will continue to hurt the bottom line because the average selling prices keep dropping. Next year, BlackBerry 7 devices will serve as entry and mid-level devices with BB10 taking premium customers. But it’s hard now to command a premium on devices that will be obsolete soon.

Heins believes the company can emerge from its 5,000 person restructuring leaner, but that’s what every CEO says. The trick will be to get the remaining people to really operate at a faster pace. There isn’t any sign, however, that RIM is capable of executing at a quick rate.

There was some slim hope that RIM could turn things around with BB10, which inspired cautious optimism from my colleague Kevin. But as I’ve mentioned before, RIM doesn’t seem to operate with enough urgency. Even if it delivered BB10 this year, the road would have been extremely tough with so many people voting with their feet away from the BlackBerry platform. But now the chances of getting back in the game as a full hardware player are even more challenged. My colleague Kevin predicted this year that RIM would be purchased mainly for its patents or would refocus as a services-oriented entity. That is looking more and more likely now with each passing quarter.

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The Sunday Times (registration required) first reported the news with Reuters noting that RIM may split its hardware business from its messaging service, which is still widely used by enterprises and consumers around the world. The Times suggests that Amazon and Facebook would be most likely interested; Apple, Google, and Microsoft all have their own software platform for smartphones and tablets.

The situation for RIM is both dire and sad to see, but not unexpected. Indeed in my year-end predictions post for 2012 last December, one of my 16 mobile prognostications was this:

Research In Motion will no longer exist as we know it today. I’d like to be wrong on this, as competition is good for all, but RIM’s missteps and late reactions to competition finally exact a toll: By year-end, I suspect the company will be purchased, mainly for its patents, or will refocus as a services-oriented entity.

I presume that any sale of RIM’s hardware unit would include the patents, essentially leaving the company as a services business. On the surface that may not sound like a bad play, since RIM’s hardware sales growth has lagged the competition as both iPhones and Android devices have invaded the enterprise.

The problem is: Selling off the hardware unit will also rid RIM of the majority of its revenue stream. In the third fiscal quarter of 2011, which was reported this past December, RIM said that hardware sales accounted for 79 percent of the company’s revenue. And that’s with slowing hardware sales. Giving up the hardware unit will simply give RIM a bigger bankroll to keep the services division alive for as long as possible, meaning the company will be smaller and relegated from a one-time market-maker to a has-been with little power.

As I’ve followed along and reported RIM’s decline these past few years, the BlackBerry faithful keep offering commentary of a transition that will eventually help or the next version of an operating system that will put RIM back on top. While the optimism is welcome, the stark facts remain and are leading the company down a path that will never return it to prominence in the hardware market.

The company has been in constant transition since the iPhone arrived in 2007, even if the company was in denial of sweeping changed needed. And once it did recognize the need for change, it reacted too slow and too late. At this point, the only questions I have left are: How will RIM fare as a services-only provider if the hardware unit is jettisoned and who will tweak the BlackBerry phone to its liking and make a run as the fourth player in the smartphone market?

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For a company built on proprietary software, that’s the sign of a last-ditch effort; a raising of the white flag, if you will. By giving up something that nobody has — the BlackBerry platform — RIM would have little left to stand apart from any competitors. In the unlikely event that RIM could find a strategic partner, it would only serve to keep the company treading water at best. Why? Because a partner would only bring new hardware and hardware isn’t what got RIM into its current predicament.

Instead, RIM was slow to mature its BlackBerry software, even as iOS and Android arrived with solid touchscreen experiences. RIM tried to replicate the touch experience but failed. App makers saw this too and where did they turn for their new mobile apps? Not to RIM, but to iOS and Android. Research In Motion was over-confident in what they offered customers and simply didn’t change with the times.

So who might be interested in licensing the BlackBerry platform? That’s the other problem because the short answer is: nobody. Apple has its own successful platform, of course. Nokia has made its bed with Microsoft’s Windows Phone software. Samsung, LG, HTC, Sony, and most others have embraced Android. All three of these platforms have a broader media and app ecosystem than BlackBerry does, so there’s little to be gained by anyone in the mix.

The only outside long shots (read: very, very long) I can see? ZTE or Huawei might be candidates who’d choose it as a side bet to their Android efforts; it would allow these Chinese manufacturers another foot in the door for regions where BlackBerry has a strong following. I really don’t see this happening, however. Instead, I suspect my 2012 prediction, written last year, is the likely outcome for RIM: It becomes a services company this year if it’s still around.

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Yesterday the Canadian company trotted out CTO David Yach to talk to the media. He assured everyone that the problem had been identified, that “engineers are working around the clock” to fix it, and that while messages might be delayed, none of them were lost.

“We understand the frustrations our customers are experiencing through the delays with the messaging and browsing…
I’d like to take this opportunity to apologize unreservedly to all those people affected by this situation. We’re taking this situation extremely seriously and we’re doing everything we can to restore normal operation of our service.”

It’s something, at least. But is it enough? It’s not clear how long the problems will take to clear completely, but perhaps the damage has already been done.

This blackout is, obviously, an entirely different sort of problem to the company’s recent struggles with the Playbook tablet, or coming under fire for the way its messaging service was used in this summer’s London riots. But the company’s inability to deal with a glaring error is exposing some of its failings in the most brutal way possible.

For a start, this problem seems to be entirely of its own making. While the company is not immune to security problems, it says the original problem started not with a hack but with a failed server in Britain. That initial flaw was rapidly compounded when backup systems failed as well, pushing the impact of the glitch out to users in the Middle East, Africa and India. But things didn’t stop there, and now the problem is of a different order: the backlog of email that users have been trying to send during service disruptions have led to a cascade of blockages in America and Asia. It’s the domino effect writ large and exposes what must surely be some bad planning at the core of the business.

Secondly, its assurances mean little. Yes, as Yach says, its “engineers are working around the clock to fix the problem”. But so they should be: when your products are unable to perform their core function, you’d better treat your business as if it’s just had a heart attack. In the meantime, the impact is getting more serious day by day: whatever the engineers are doing, it isn’t working.

Third, the damage to the company’s relationship with customers is incalculable. Businesses reliant on the BlackBerry — the core users who propelled it to success — will be counting the cost of lost productivity. And its other big base, youngsters addicted to its messaging service, are having their loyalties tested. What is a phone without the ability to communicate? Why stick with a device that can’t perform the basic function you bought it for?

But over and above all of this, I think the biggest problem is in the company’s response to this crisis. The slow trickle of information from the business has been disappointing, but it’s only because there seems to have been a real leadership gap over how to handle the affair.

Sure, executives have started going on the record to make their apologies, including Yach, CIO Robin Bienfait and UK boss Stephen Bates. But the really big bosses have yet to make an appearance — despite the fact that RIM has not one but two chief executives.

Where are Jim Balsillie and Mike Lazaridis? Why can’t at least one of them take command of this issue? It’s all very well appearing in public to launch a product, and when the wind is in your sails… but when your already-frazzled users are denied service, their fears are something that need to be dealt with at the very top. It would be bad enough if there were one CEO who had gone missing — but the bigger this problem gets, the more the inability of either man to take it on seems like willful neglect.

Sure, crisis management is tough. You don’t always want leadership to be associated with a problem that was caused further down the chain. But if RIM can’t find a way to get either of its top executives to spare subscribers a moment, what message are they sending?

Updated: Shortly after posting, Lazaridis actually issued a video apology in which he says the company let down users but can’t give a promise of when the outages will be resolved. It’s better than some corporate apologies… but is it enough?

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I was a long time Blackberry user, and I lost my device in a taxi when on my way to cover the HP Palm WebOS/Tablet launch. (Oh, the irony!) Here I am today: an iPhone (on Verizon) user. However, I always have and will always maintain a sweet spot for Blackberry devices. They are good for instant messaging and are really good for email. They often have good radio performance and have solid battery life. A lot of people still use them.

And while I have stopped doing reviews — Kevin Tofel does a much better job — I find time for the Blackberry devices for old times’ sake. A few weeks ago, RIM sent me three of their new devices that ran on three different U.S. phone networks: Sprint (Blackberry Curve), AT&T (Blackberry Torch) and Verizon (Blackberry Bold). And they were all powered by Blackberry OS 7.0.

With three different models all here at once, I have not been able to give each one ample time, but the one that has me captivated for now is the Verizon Blackberry Bold. It is ultra-thin, has a comfortable keyboard and has access to a fast network.

This is their newest touch-enabled OS and has a lot of under the hood tweaks. It’s incredibly fast (well, compared to the old Blackberry I was using); it has a decent enough browser, has fantastic/fluid graphics; and it feels much more modern. It’s sort of like me going and buying slim fit jeans: On the surface, I might look mod, but in reality, I’m a guy on the wrong side of forty. But as I said, it does a good job of papering over the shortcomings.

One aspect of Blackberry OS 7 I absolutely love is the touch capabilities. You see, after continuously using the iPhone and iPad, I find devices that don’t have touch capabilities incredibly inhuman and pointless. They end up raising my blood pressure a few points. Other Blackberry owners who have upgraded from their old devices (that I have talked to) find themselves pleasantly surprised as well.

To make a short review shorter, I can say OS 7.0 is good enough, and it also buys RIM a bit of time in the marketplace. Not a lot, but when you are perceived to be fighting for your life, every second counts. Smart guys at UBS Research, in a note to their clients Friday morning, pretty much affirmed my totally unscientific perceptions and put numbers around Blackberry OS 7′s impact on RIM’s bottom-line.

Our recent store checks in the U.S./Canada (see 8/19/11 note as well) point to a decent start for RIMMs new BB 7.0 phones, esp. the Bold, which, combined with the scope of the launch (global) and a lean channel, could lead to upside to our 11.8m and 13.1m phone unit [estimates] (sell in) for 2Q/3Q when RIMM reports on 9/15.

On a mid-term basis, we will be watching the effect of competing product launches such as the iPhone 5 and several Android devices expected later this year, seasonality, especially given increasing macro uncertainty. Ultimately, we will be looking to RIMM’s QNX transition along with other signs of what RIMM can or will do to meaningfully alter the balance of power in the mobile handset world.

RIMM’s two main pillars of growth — international expansion and enterprise — are increasingly under attack and we continue to believe the status quo will likely be only good enough to just keep RIMM in the game, but will not meaningfully slow its competitors. Competing ecosystems continue to innovate at a very rapid pace, and we continue to foresee eroding market share for RIMM longer term. [From UBS Research note sent via email]

Their long-term skepticism is justified. I don’t think Android and Apple are stoppable at this point, and anyone else is essentially fighting for the third spot. And this is where RIM has as much a chance as anyone else. A UBS survey found that nearly 62 percent of Blackberry owners are likely to buy another Blackberry, that is second only to Apple (with 95 percent likely to be repeat buyers of an Apple phone.)

For Blackberry, that could be something to start with.

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It was a great piece of political logic. BlackBerry messages had been used by some rioters and people had talked about the riots on Facebook and Twitter — therefore it would be worth considering whether they should be closed down at times of distress. There was little mention of what role text messages, telephone calls, newspaper editorials and TV coverage may have had in helping fuel the spontaneous outbursts of violence that erupted across the country.

To most people, such a reaction made little or no sense. Mathew has previously pointed out that accusing social media was a case of “blaming the tools”, rather than the individuals behind the riots.

But in the end the proposals were merely one facet of a larger, dramatic over-reaction to anything related to the riots. Blaming the tools was just a part of blaming everything possible. And the pushback was even more harsh elsewhere, as the courts exerted their power by giving rioters and pseudo-rioters and even people-who-may-have-known-rioters the most draconian sentences. (One woman who was jailed for five months simply for receiving a pair of shorts stolen during the looting has already had her sentence reduced after an appeal).

Fortunately, calmer heads seem to have prevailed. In a meeting yesterday between government officials, police officers and representatives of Facebook, BlackBerry and Twitter, things seem to have fizzled out.

Downing Street seems to have backed off its earlier stated intention to close the whole thing down. In fact, in a statement, officials seemed to be backtracking some way from their earlier position that the riots had been “organized via social media“ and that it was considering “whether it was right to stop people communicating via these websites”.

“The Home Secretary, along with the Culture Secretary and Foreign Office Minister Jeremy Browne, has held a constructive meeting with the Association of Chief Police Officers, the police and representatives from the social media industry. The discussions looked at how law enforcement and the networks can build on the existing relationships and cooperation to crack down on the networks being used for criminal behaviour.”

Hurray!

But perhaps we shouldn’t be so quick to celebrate. The original move was obviously wrong-headed, but I can’t help but be concerned that it got so far so quickly. Britain has a habit of pushing through strange laws at moments of weakness, and sometimes it doesn’t take much to get things into the statute books.

It’s particularly chilling when you consider that the evidence and the rhetoric are in pretty much direct opposition here. It’s obvious to many people, but much of the political sphere and the media seems to have ignored that (I have read more pieces claiming “Twitter was the main medium used to organize the riots” than I care to remember). An analysis this week by the Guardian of more than 2.5 million Twitter messages sent over the course of the riots shows a distinct pattern of traffic, with barely any messages about areas before they erupted in violence.

But it was no surprise that the Conservative-led government saw social media as an easy target. The usually-placid English had united against the rioters, with citizens across the nation spitting out mouthfuls of tea over their television sets in surprise as they watched England’s urban centers go up in flame.

They were demanding action… any sort of action. And in the end, it’s much easier to wave your fist at these damnable Internet services than to take on the bigger, intractable problems of civil disconnection, social unrest, economic hardship and increasing inequality.

As long as social media remains an easy-to-blame outlet — popular, easily-demonized, slightly outside the mainstream — it will remain a target. Common sense prevailed this time, but don’t be surprised if the subject comes back again sooner than you expect.

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