What’s It With BlackBerry – Badly Beaten

Tuesday, February 7, 2012, AM | Leave Comment

BlackBerry, made by Research in Motion (RIM), was the darling of the world community that used some kind of personal mobile device. It started to rise on the personal technology horizon in 1999. It was riding high in the stratosphere for many years to come. Senior executives and managers would take pride in using it in front of others as if it just came out of the twilight zone and it seemed it did. In essence, it had become a status symbol for many folks.

Then along came iPhone from Apple in 2007 and the world dominance of personal technology began to shift from RIM to Apple. With the advent of iPhone, the exponential upswing of the graph for BlackBerry started to come down, albeit slowly in the beginning. It seems that after these 5 years, it has dived way down to the bottom of the graph.

RIM’s many years of dominance was supervised by its co-CEOs, Mike Lazaridis and Jim Balsillie. Recently both stepped down, in favor of its Chief Operating Officer. Thorsten Heins took the helm as the new CEO so that fresh blood can be pumped into the veins of the company.

BlackBerry, in a variety of shapes and forms, had become cash cow and the company kept milking it for many years without giving it much needed attention in terms of innovating it. The company is still in profits and it is doing very well in Africa, Europe and the Middle East.

RIM’s stock price went up as high as 70 in January, 2011 but today it’s way below 20. The reason is that investors see a fading star. In one year, its market share dropped from 24% to just 9%, according to research firm Canalys. The company came out with BlackBerry PlayBook tablet, but many experts say it’s an embarrassment as an also-ran in the arsenal of the once high-flying organization.

Overtime, compared with iPhone and a slew of other mobile devices, BlackBerry started to look like an object from ancient history. In essence, RIM became uncompetitive, in both quality and quantity.

RIM bought QNX which boasts an industrial strength real-time operating system (RTOS) and many development tools. Maybe the company will innovate its products to be at par with or better (?) than iPhone-class smart phones.

However, according to company’s press release any new mobile device of a world-class stature has been delayed until late 2012.

At present, iPhone and devices based on Google’s Android operating system and Microsoft Windows are riding high and will be hard to beat or grab some market share from them. To get some meaningful share of the market, RIM must bring out extremely good products from under its sleeves.

In a Nutshell
Many experts have suggested that RIM might be a good case study for M.B.A.s. It’s rise in the past and fall in the present is a stark lesson on the danger of milking a company, instead of a product, for too long without innovating its products.

So far as investing in RIM, may be it’s a good time to do so while the price per share is quite low compared to a year ago. But it depends on how RIM handles the acquisition of QNX.

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