Archives for June 2012

Is RIM Finished?

I feel compelled to write something following the most recent quarterly earnings by Research in Motion (RIM).

I have defended RIM over the past couple of years as it has taken its lumps from haters and analysts alike.  The company is going through a significant transition, not only in product lines (BB7 to BB10 platform) but with senior management as well.  With co-CEO’s Balsillie and Lazaridis stepping down in January 2012 due to significant shareholder pressure, and the appointment of Thorsten Heins as new CEO, the company got a bit of relief from the relentless thrashing and death knells in the media.

With new leadership came the hope that the company could make changes and right itself in time — before RIM’s plummeting market share did further damage to the brand and the company’s future.  Many feared it was too late to fix, and BlackBerry would go the way of Palm and Nokia.  Nokia is still with us, although barely — they have partnered with Microsoft and have abandoned their own operating system, Symbian, as it was suddenly outgunned by the Apple iPhone and Android-based smartphones on the market.  Nokia continues to struggle, lose market share and their future is very much uncertain.

Many call for RIM to make similar moves — abandon their BlackBerry platform all together, or sell off pieces of the company, get out the hardware business and just focus on their Blackberry platform and BBM messenger product or even license their platform to other companies like Samsung to produce their own phones.  The company continues to explore all strategic avenues, and cut costs.

But with their earnings report today, the company announced it lost $518 million, it will layoff another 5,000 employees and perhaps most devastating — the company is once again delaying the launch of its BlackBerry 10 smartphone line.  The company was to launch the new platform and phones this fall, but is now pushing the launch back until early 2013.  The company will now be another 6 months behind Apple and Google Android phones. Apple is set to launch the iPhone 5.0 in October — which is rumored to have a 4 inch screen and will sport iOS 6 to boot.

I fear that BlackBerry users and investors will now completely lose faith in this company.  The further delay of BB10 is perhaps the worst thing they could have possibly announced today, and shows that the company cannot execute.  The platform is now more than a year behind schedule, and RIM’s current crop of BB7 phones are growing older and older each day.  The company is only growing in developing markets.  Their market share in the U.S. and even Canada continues to plummet.

It is growing more and more doubtful that RIM can survive.  The company’s value is shrinking and will increasingly become a target of a buyout, which some see as their only hope anyway.  It has been a sad fall from grace for this Canadian icon.  The company created the wireless email and smartphone industries, but has now been overtaken as the industry leader and fights for its very survival.

Only time will tell if RIM can survive as a company.

 

 

 

 

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