Wednesday, 29 December 2010


OF COURSE YOU DO! EVERYONE WANTS TO BELONG TO SOME KIND OF TRIBE---ITS ONE OF THE 5 UNIVERSAL HUMAN IMPULSES. I'll show you mine--celebrating Christmas and Thanksgiving. Christmas first (it's an afterthought) Here we are camped just outside Yuma, Az on free BLM land.
Christmas day gift exchange---a hilariously fun process of selecting and "stealing"
Now I'll return to my origional story about our Thanksgiving gathering: Hwy S22 in California---my tribe is assembling near the base of those mountains near the lovely town of Borrego Springs.
Down there are the early arrivers---our numbers swelled to a hundred by Thanksgiving Day. My rig is at the bottom--for some wierd reason I always choose to park on the edge. This tiny triangle of land is famous among RVers---it's called Peg Leg Smiths ---it's free and only 5 miles from town.
We assemble mornings and afternoons to organize our group activities. Two volunteer host bring focus and plan events.
One of which is morning hikes. I'm always amazed at the general vigor of my retiree companions---able to hike 5 miles or more before breakfast.
One day this bold coyote sauntered by on a morning hunt I suppose.
Another morning, I hear music on the mountain.
It's "Fast Freddy" practicing for a performance. He follows the fiddlers circuit.
Thanksgiving day--all set to serve. (we all chip in $10 for the basics and supplement pot-luck style---it's enough for 3 meals.
Everyone was served in 22 minutes. We are understandably good at this ----been coming here more than 10 years.
I became intrigued by that lady on the left--a newcomer--with true grit---asked her out.
She accepted and we toured the area looking at these marvelous sculptures which dot the landscape---more than a hundred of them----comissioned by a rich guy named Avery. (of Avery labels) He owns the land where they are situated and allows free camping for 3 days at the site.
Together we marvel at this prize winner---seemingly a story or metaphor of some kind---mother eagle brings home a vicious snake----to feed the chicks? or to scare them out of the nest and into the air? Don't know!
The day after Thanksgiving I perform for the crowd--and hopefully to impress the Lady, I poetized:
Something grand and dear is happening here
The world could not have expected:
The mobile domicile---and a new lifestyle
right here---are being perfected.
We're the sprouting seed of a brand-new breed,
living simple and light and lean;
living happy and free like wild cherokee
in our cozy little living machines.
A life that is bold, with ourselves in control;
with clustered friends ---in affection;
reinventing the tribe---helping revive
our long lost natural connection.
Choosing sunlight's glow over ice and snow;
acceptance over sorrow;
adventurous games over riches and fame;
and today--over iffy tomorrow.
We'll never grow old--so long as we roll
onward---till our roadway ends;
expressing our talents and keeping the balance
'tween solitude and friends.
It must have worked---she went with me another day to see more sculptures.
This one perhaps the most elaborate.

RANDY PHILOSOPHIZES: I've been a member of this tribe (Wandering Individuals Network ) more than 10 years ---camping with them beyond a thousand nights. I think it is the best singles RV club in the nation---surely the most active because we travel year round--hiking, biking, kayaking, dancing. Its structure is a quirky blend of for-profit enterprise and volunteerism. The club is owned by a single individual who handles the difficult details like newsletter, directory, policy for a yearly charge of $60 per member. Volunteers plan and host the approximately 52 gatherings---a 6 month winter circuit and a 6 month summer one, with an average stay of one week at each place.
This is NEO-TRIBALISM at its best; unlike old tribalism because it is not geographically based--avoids a strict heirarchy; is based on common interest rather than birth; holds common values but not common myths; and of course one is free to come and go at will.
Einstein needed a tribe and so do you. (his friend sorted out the complex math of relativity for him and he worked hard to convince the scientific community--his tribe) We are grievously incomplete without others to communicate with---growing bizarre as we recede from human contact. Even St Anthony--the first Christian hermit / monk had contacts that relayed his message to the world. The trick is to select an inspirational and nurturing tribe--mine has helped me in a hundred way to discover and express myself. I eat better, live better, write better, behave better for my association with them. I hardly need say that a tribe can also drag one down--like street or motorcycle gangs--distract, dilute and waste one's time and energy (like churches). As with Fire and Forceful personalities---good servants--bad masters.

Tuesday, 21 December 2010

RIM's Q3 Financials: A Tale of Two BlackBerries

People have been asking for my take on RIM's latest quarterly earnings, which were reported last week (link).  The short answer is that I am both less worried and more worried than I was before.  I am less worried because the company has more strength than I realized internationally, and I am more worried because the situation in North America is worse than I thought.

Before I get into my comments, I should point out that I don't think you can use a single quarter to declare a company either dead or saved, especially when it's as big and prominent as RIM.  In the last couple of years, attitudes toward RIM have gone through a couple of cycles in which negative coverage about the company builds up, the company has a good quarter, and the coverage dies down for a while again.  I think it's more useful to look beyond the individual quarters and try to see the long term trends.

In that spirit, I think RIM's earnings were good, but I was more interested in the things management said about moving toward new products and services, and by the very rapid changes happening in RIM's international sales.  Overall, I wouldn't say the company is out of the woods at all, and 2011 will be a decisive test of its viability.  Here's an overview of the earnings, followed by some comments on international and the new products.

Updating the charts

I plugged the latest numbers into the charts from my post on RIM in October (link).  They generally look like good news:

Total BlackBerry Subscribers

(Quarters are RIM fiscal quarters)

Continued nice growth.  But we'll come back to this one in a minute.

Net New Subscribers Per Quarter

This one is encouraging: additions went up compared to the quarter before.  But it's only one quarter; over the year, the rate of additions is flat.  Watch the next several quarters to see if there is a trend.

New Subscribers Per Unit Sold

Continuing to decline.  If you're looking for bad news on RIM, this is probably the chart you focus on. 

Device Gross Margins

Good news, they were stable for the quarter.  This is another statistic where you want to look at the trend rather than just a quarter's results.  And the trend for the last year looks stable, which ain't bad.  (Remember, I have to estimate this number because RIM doesn't report device gross margins separately.) 

Device Average Selling Price

Also stable for the last couple of quarters.  Good news.

Service Revenue Per User
 (Dollars per quarter.)  

I didn't chart this one last time, but it's interesting.  RIM currently gets about $15 in service fees per quarter per BlackBerry subscriber.  That's the money operators pay to RIM per user for the email service.  This revenue has been declining slowly but steadily for years, and I don't completely understand why.  RIM says it's due in part to a shift toward prepaid customers, which would fit with the international growth they're seeing.  But I wonder if also the operators are becoming less willing to share revenue with RIM.  Anyway, I think it's a warning sign -- as your market matures you want to find ways to make more money per user, not less.

Adding up all of the results, it looks like a very nice quarter.  But remember, one of my main points was that good short-term numbers can mask long-term problems.  And in this case, the way RIM reports its numbers hides some challenges.

Looking ahead: A Tale of Two BlackBerries

Two issues really stuck out to me as I looked at the RIM announcement: International sales, and the comments by RIM's management.

In the post I wrote in October, I missed the importance of RIM's international growth.  It was a significant oversight.  Several people, starting with mobile analyst Dean Bubley (link), pointed out in comments on my blog that BlackBerry has become very popular among young people in many parts of Europe and elsewhere as a messaging phone.  RIM also claims it is the number one smartphone platform in Latin America.  Its appeal was explained by analyst Horace Deidu, who notes that the BlackBerry Messenger app is more attractive than generic texting because it's free, and because you can see when your messages have been read (link).

Deidu looked at RIM's most recent quarterly financials, and concluded that RIM's revenues had actually declined in North America, a fact masked by the company's rapid growth in other parts of the world (link).  That surprised me, because it wasn't featured prominently in most of the reports on RIM's quarter.  It was also pretty alarming.  All of the charts above look relatively reassuring, but they're a blend of the international business and the North American one.  Since the signs of an impending platform collapse are subtle (something I explained in my October post), it's possible that the international growth is disguising big warning signs in North America.

Unfortunately, RIM doesn't report early indicators like gross margin by region, so I had to look for whatever data I could find.  I managed to dig out the numbers on the RIM subscriber base in North America vs. elsewhere.  RIM doesn't report this directly, but you can calculate it from the quarterly reports.  Here's what I found:

BlackBerry Subscribers
Total subscribers in millions

About half of RIM's subscribers are now outside North America (the crossover will probably happen this quarter).  Growth in North America looks pretty slow.  Here's what the subscriber growth rate looks like:

Quarterly Growth in Subscribers
Percent growth from quarter before

The BlackBerry subscriber base outside of North America has grown rapidly, increasing 15%-25% every quarter for the last three and a half years.  North American growth was also strong until about 18 months ago (the second quarter of FY 2010), when growth softened.  In the last two quarters, subscriber growth in North America dropped to almost zero. 

Yikes.  That sure smells like market saturation to me, and the process is a lot further along than I thought.

(Note: I had to interpolate the numbers for a few quarters in fiscal 2008 and 2009, because RIM didn't report them every quarter.)

So at the risk of oversimplifying a bit, the data and the anecdotes from around the world paint a picture of two RIMs: A consumer messaging phone company that has tapped into a new demographic and is growing fast in various parts of the world outside North America, and a prosumer e-mail phone company that has hit the wall in North America and needs very badly to re-ignite its growth through new products and services.  It is the best of times, it is the...oh, you get the idea.

This explains a lot of the confusion we're seeing in attitudes toward RIM online.  Like blind men feeling the elephant, we see the RIM that's in front of us -- either the consumer RIM that's growing well, or the prosumer RIM that has stalled out.  Who's seeing the real RIM?  We all are.  The phone market is heavily segmented, and it's common for a company to do well in one region and poorly in another (just look at Nokia).

I have to give a lot of credit to the folks at RIM for managing to crank up the growth internationally just as its North American business faltered.  I don't know if they were lucky or good, but it's a very hard balance to hit.  On the other hand, I don't think RIM is doing any favors to investors by playing down the regional data in its financial reports.  That creates a lot of confusion.

What it means for RIM.  It looks like the North American business may be closer to a platform collapse than I realized.  I think urgent action is needed to keep the company's North American users loyal.  The silver lining in that dark cloud is that RIM's growth in other regions can help fund the changes needed.  But time is short, and I still worry about RIM's ability to quickly focus on new differentiators and create compelling user experiences.

There's another path RIM could choose to follow -- it could milk its North American prosumer base for profits while accelerating its growth with young people overseas.  But if you can trust the comments of RIM's execs, that is not their direction.  They seem to believe they are on the verge of succeeding everywhere, in all segments.  RIM co-CEO Jim Balsillie was effusive when he took questions in RIM's recent quarterly conference call (you can read a transcript here). 

His message boils down to this:
     --PlayBook will be a huge hit.
     --The new QNX operating system is great.
     --Unlike other companies (Apple and Google), RIM will work in cooperation with mobile operators, content providers, and banks to produce services for customers.  RIM will not bypass them, so they will steer customers to RIM.
     --Don't worry about the iPhone and Android app base, because mobile applications written to a particular OS will become less important in the near future, as users and developers look to support web standards and intermediate development platforms like Flash.
     --RIM provides the sort of reliability and security that enterprises want, so it will be the leading B2B mobile provider.
     --RIM is growing very fast, and has a lot of plans for 2011 that have not been fully revealed yet.  Adding these all together, the company has tremendous opportunities in the coming year.

I was surprised by how relentlessly upbeat Balsillie's comments were -- most CEOs usually hedge their statements to avoid saying something that could be quoted in a shareholder lawsuit.  Balsillie sounds like he's either extremely optimistic or extremely anxious to convince people not to write his company off.  But I checked some of the previous calls, and it turns out he's always like that. 

It's important that you understand the breadth and depth of RIM's ambition, so here are extended excerpts from his comments:

"We have real differentiation and we have real opportunities for extension of the business in a whole bunch of ways. I mean, just the pent-up interest in the PlayBook is really overwhelming, and then you know the whole aspects of carrier billing and value-added services -- you're just going to see a litany of things happening in that area, both for the BlackBerry tablet and the BlackBerry smartphone over the year....

"We're laying in the pieces here to sustain really exciting growth for a long, long, long time....we'll have some pretty pleasant surprises in what we're doing throughout the calendar 2011....

"We're selling lots...We have good products. Our engagement is good. I feel very, very good about U.S. I mean, we're meeting with the guys that run all the carriers, we've got plans, our carrier partners are in place. There is a real desire to do a lot of things and a lot of these things are locked in and new things are being planned....

"I feel great about where we're sitting for 2011 in the carriers in North America, and we've held our base and we've had growth in shipment and we've had okay net adds, but we're positioned to grow very, very strong. We've really knocked the cover off the ball in so many other markets around the world and yet our penetration in those are still very, very modest....We fell very, very good about the future....

"The product roadmap looks great and the application extension B2B and B2C is so strong.... You're going to see a lot of the stuff come out, really over the next month. So it should be very, very interesting....

"The interest in PlayBook in the B2B is uniformly strong....I can't think of an account that isn't just beating down to get units....Overwhelming interest and overwhelming pressure to get units are a pretty fair characterization. So we're very confident just what it's going to do for businesses....

"The core essence of the business is still just moving along so well and growing so fast. So if you layer in this tablet category, and then you layer in advanced services strategies and then you layer in leapfrog future-proved architectures, I feel very, very good about where we are in the U.S. I feel very good about where we are around the world.... Do I think we're in a position to really take where we are and extend it further in a sustained basis in the U.S. and abroad?  In my view, without a doubt....Just watch the year unfold and watch 2011 unfold and you should know. I'm fine just letting the proof being in the deliverables. We do keep delivering and we're going to keep delivering, so we're just going to keep it up....

"I think the PlayBook redefines what a tablet should do. I think we've articulated some elements of it and I think this idea of a proprietary SDK and unnecessary apps -- though there is a huge role for apps, I think it's going to shift in the market and I think it's going to shift very, very quickly and I think there's going to be a strong appetite for web fidelity and tool familiarity. And I think there's going to be a rapid desire for high performance, and I think we are way ahead on that. I think, CIO friendliness is...we are way ahead on that....So I think the PlayBook clearly sets the bar way higher on performance and you're going to see more. I think the enterprise stuff, we're seriously extending. I think the BlackBerry is still number one in social collaboration. And I think with the PlayBook and that environment we're going to set the new standard on performance and tools, very powerful tools and we're growing very, very fast."

This is called tying yourself to the mast. 

Maybe Balsillie is right.  Maybe RIM's on the verge of enormous opportunity and explosive growth.  I hope it is (seriously; I like RIM and I'd like it to succeed).  But RIM is fighting on an enormous number of fronts, and that scares me for a company that has problems creating high-quality knockout products and is transitioning to a new operating system.  The effect could be like flooring the gas in a car with a bad transmission -- you might get a surge of power, or you might leave half the engine on the highway.  Restoring momentum to a stalled-out platform is a very difficult task, and it rarely goes smoothly, or succeeds in a single year.  With all the hype the company is putting into PlayBook and the rest of its strategy, anything less than stellar success in all regions and all product lines in 2011 is going to be seen as a big disappointment.  And that sort of disappointment could be the signal that causes users to turn away from its platform in North America.

As I said two months ago, I think RIM's future depends on its ability to focus, differentiate, and execute.  I think the latest earnings just reinforce that.

[Note:  This post was revised Dec. 22 to add a paragraph and clarify some explanations.]

Sunday, 19 December 2010


MEET RON SINOR----A TRUE RENAISSANCE MAN---( A person with very broad interest and talents)---A longtime friend and confidant.
WIN members (Wandering Individuals Network) dancing in the desert on a functional dance floor he constructed in a few hours--when the club wondered if such a thing was possible. You'd
have to dance on it to appreciate its elegance. Folks really enjoyed dancing under the stars.
We met years ago on a remote California trail and immediately exasperated our girlfriends with a non-stop philosophical dialogue. We play off each other so well--cranking up any group we are conversing with---that it is a standing joke among our RV club--that the two of us are not allowed at the campfire at the same time. He keeps me in stitches with his humor.
His whole life has seemingly been an adventurous experiment---3rd of 8 children--son of a fundamentalist preacher. He describes himself as a freethinker--having no religious certainties---rejecting conventional Christianity--embracing an ever-evolving "spiritual" approach. Raised in San Bernadino, Ca. I have quizzed him carefully about the roots of his extraordinary creativity---will share that with you later.
He does not hesitate to do spontaneous, ridiculous things. I've forgotten what this was about--but it shows his playful openness.
The only picture I could find showing his (intact)motor home Before he began creatively altering it. We were camped somewhere in Central California.
Incredibly, He took a saw and cut out a huge slab of it. Who else do you know that would do this to a perfectly good 40 foot motor home?
Ah but see what he's done with that hole---made a slideout--giving lot's more living space inside.
One day he needed a roadworthy trailer----so he built one--out of wood---only the wheels and axels are metal. This one also disassembles to store flat--- out of the way.
The above are just minor projects to him. What really occupies his mind is the betterment of humanity. A current project is to design a revolutionary new kind of house--made of foam---super heat efficient---cheap to build---perfect for cold or hot climates.
A close up of its interior.
RANDY COMMENTS: I don't have the pictures to do justice to this man's accomplishments and vision. ( lost in my old computer)---will just have to tell you.
1. He invented and patented the "Pet Patio" now being sold to RV owners. (allows pets to go safely outside the RV.
2. Designed and built a modern home in Arkansas.
3. Has entertained crowds with a solo stage performance--singing and playing
4.. Has lived communally with several intentional communities--sharing his creativity with them.
5. Has trained extensively in personal growth-----read widely---is curious and interested in almost all aspects of the human condition.

I've quizzed Ron carefully, searching for the roots of his creativity. He thinks all of us are endowed with a measure of it but that many have its impulses stifled with fear or driven out by caregivers in the name of other values like conformity, memorization or repetition. Creativity happens naturally and requires only to be respected in its early bumbling expressions. He remembers being curious and courageous as a child and he thinks these two qualities feed each other in an upward spiral. His father noted his interest and more often invited him in on work projects than his siblings---and he gained skills in carpentry, motors, machinery, electricity, welding etc.
RANDY PHILOSOPHIZES: At the apex of the human personality pyramid 5 types are represented: (in no particular rank)
ENLIGHTENED : Those with extreme clarity of IDENTITY---living as though they are immortal---regarding the world as playful illusion. e.g. Buddha, Rumi
AUTOTELIC---(auto= self---teleos=end) (from the book FLOW by Csikszenmihalyi) ---folks super skilled at generating happiness.
SELF ACTUALIZED---Fullness of Being (I've described this one fully in a blog dated 3/31/08.
GENIUS: Profound insights and skills in a particular field---like Einstein or Darwin.
RENAISSANCE PERSONS---people with very broad skills---who are fascinated, challenged and determined to improve the art and operation of the world. My friend Ron fits this last category.
Like Franklin, he now puts his ideas out to the public--inviting anyone to use them. I think his idea of foam houses could revolutionize our notions of shelter. He's currently building a large scale model.

Anecdote: As I left him in Quartzsite, Az recently, I presented him with a special towing challenge I've been wrestling with---how to attach a single leveling bar to my current hitch to shift some weight forward. He said he would think about it. I left, headed for Blythe, Ca. 8 minutes later he called with a perfectly good solution.

Thursday, 9 December 2010


A NIGHT WITH GENERAL PATTON. His Museum is just ahead---located very near his desert training headquarters--from which he guided vast armies of trainees preparing for warfare in north Africa. Thousands of square miles stretching East to Quartzsite and South to Yuma, Az--constituted the largest training area in history. I'll go through the museum again to warm up my brain to address the big question posed in the title. 30 miles east of Indio, Ca --just off Interstate 10. (how do you pronounce that word?)

I spent the night right here---the famous general just outside my window---I was alone in the parking lot--just me and the "general" and his strange looking dog.

Sunrise and soon the museum opens----lots of tanks outside for the viewing.

Me and the general. Surely one of history's more forceful personalities. Subordinates feared and revered him. His style of warfare was super agressive. Speeches on the wall advocate unrelenting attack---contempt for passive--positional--defensive strategies. He believed this to be the "cheapest"--in terms of lives lost--way to end the war. German Generals considered him the most dangerous---and were incredulous when he was removed from command for merely striking a soldier.

I travel 8 miles and call it a day at the edge of Joshua tree National Park.

I'll just sit here and think awhile about the General and other forceful personalities in history---How do I judge them -- generally? As barrier--breaking--red tape cutting--log jam anniliating--heroes----- or egomaniacal, frenzied bulls in civilizations china shop. ( Incidentally, I'm parked only a few feet from the Colorado Aqueduct---its buried under those bushes this side of the road)

While I'm pondering--who should surprise me but an old friend---enroute to the infamous SLABS. She camps with me for the night.

It's another great sunset. I'll think about the general tomorrow.

RANDY HILOSOPHIZES: OK---I've had time to think. We need charismatic leaders (people with personal magnetism) for the same reason we need salesmen---to bring us to decision and action. Humans naturally drift, dawdle, delay---collectively we are even worse than we are individually---And the tendency of social and personal drift is downward. Societies and nations idle away their time doing nothing of significance. I believe there is important work to be done --defeating the forces of entropy and building progress (progress is the increase of options) ---We need powerful personalities--like Thomas Paine to stir us to action---Personalities like Voltaire--Andrew Jackson--Theodore Roosevelt---and yes--General George Patton who possess personal magnetism. Yes I know Hitler was charismatic too--and led millions down a rathole. As did Napoleon etc. The trick is to use such personalities for the stimulus they provide but not let them use us---exactly like Eisenhower used Patton. Like fire, they make a great servant but a bad master.

Sunday, 5 December 2010


BAGPIPE BOB at the dedication ceremonies to open the spectacular bridge now spanning the Colorado River just below Hoover Dam. (you'll see in a minute how this fits into my story)
TRUCKERS ROOST WHERE HISTORY WAS MADE. Kodger King digs in for the story. I've driven 40 miles today and that's enough---no serious drifter would go further. So halfway between Blythe California and Indio I pause for the night---drawn as is this photographer by the beauty of the distant mountains. I know a bit about this place and would soon learn the rest of the story. See that dark line at the base of the mountain? That is the famous Colorado Aqueduct
---bringing California's share of the Colorado river to Las Angeles. And as you can see the builders faced a formidable problem right there: how to get the water over that mountain. They managed of course designing a kind of clever siphon up and over. You can imagine the thousands of workers once living here. They needed doctors of course for the occasional accident and that lead to a surprising development right here that affects all our lives. I'll tell you in a bit.

First, I show you the town--That Cafe is the last remaining business---all else--except the post office is shut down. Vast dirt lots are empty.

So truckers wheel in for 8 hours sleep. Quiet, spacious, free parking places like this are treasured by drivers.

I don't think you can read this, so I will tell you the gist. Right here was the birthplace of HMO's (health maintainance organizations)----specifically Kaiser Permanente--one of the nations largest.

AND THEN----AND THEN---who should drive up but a colorful old friend "bagpipe" Bob---Fresh from the dedication ceremonies of the new super bridge at Hoover Dam. He's the first to march across it playing the bagpipes. (he makes a good living playing the pipes on special occasions.) I persuade him to stay the night---so we drink beer and catch up.

Next morning I engage the self described "mayor of Desert Center" ---an affable veteran who stopped for a night and never left. He told me the colorful--and likely true---version of the main local characters. The place was founded by a desert codger named Stephen Ragsdale who built up a small empire of desert services and got rich. (google desert center for the full story) Not wishing to leave cash to to his heirs--he spent most of it on a strange project----several huge circles of palm trees.

The owner of the Cafe came by to add her view. When I tell folks I'm putting the story on the internet, I get unbelievable cooperation.

The remains of the palm circle. Dead, said the mayor because the kids turned off the water to them after the old man died.

Sure enough---no water .----but guess what?

One of them lives anyway. Anazing proof of Prigogine's Nobel prize winning theory. Living things stressed but not killed will reorganize in an improved manner. Apparantly, this one palm tree adapted somehow when the water was turned off. I take it as a metaphor for the survival of humanity when mega disasters strike.---Like the black plague. Some will adapt and survive.