Black-End For BLACK-BERRY?

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Following the news that Facebook (NASDAQ: FB) joined the NASDAQ-100, an index comprised of the 100 largest non-financial stocks listed on The NASDAQ Stock Market, Canadian company Research in Motion (NASDAQ: BBRY), the makers of BlackBerry telephones, will no longer be a part of the Nasdaq 100 index. These changes will come into effect on Monday, Dec. 24.

In addition to RIM, nine other companies were removed from the list as well: Netfix, Electronic Arts, Marvell Technology Group, Flextronics, Green Mountain Coffee Roasters, Lam Research Corporation, VeriSign and Warner Chilcott.

Conversely, the following 10 securities have been added: Analog Devices, Catamaran Corporation, Discovery Communications, Equinix, Liberty Global, Liberty Media Corporation, Regeneron Pharmaceuticals, SBA Communications Corporation, Verisk Analytics and Western Digital Corporation.

According to NASDAQ, its ”objective re-ranking process ensures that the list remains a relevant investable index that is the underlying benchmark for about 7,100 products in 22 countries with a notional value of about $1 trillion.”

This update serves as yet another sign of decline for RIM, as the company gears up to launch its BlackBerry 10 OS on Jan. 30. Facing fierce competition from the likes of Apple's (NASDAQ: AAPL) iOS and Google (NASDAQ: GOOG) owned Android, RIM has experienced a massive drop in market share over the past few years. A comparison of Q2 2011 and Q2 2012 shows RIM’s declining market share on one hand, wheresas it depicts Android’s strong dominant position and increasing market share on the other hand.

 

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RIM's share price was previously hit by its loss of US market share to Apple and Android and by the poor market response to the launch of RIM's Blackberry PlayBook tablet computer. RIM, which is losing its smartphone market share in the country, slashed prices of its handsets up to 26%. Though BlackBerry handsets are generally available at a price lower than the MRP, the reduction in prices comes after the Canadian company cut prices of its tablet PC PlayBook last December. RIM as a brand has moved from just an enterprise device to more of a consumer device.

While the price of the Curve 8520 has been reduced by over 18%, Torch 9860 will be cut 26%.

In addition to this problem, Patent licensing company Wi-Lan said it has filed a lawsuit against RIM for infringing a patent that relates to Bluetooth technology. Wi-Lan, which has licensed its intellectual property to more than 255 companies worldwide, alleged that RIM infringed its U.S. Patent No. 6,260,168 related to Bluetooth technologies.

Wi-Lan has launched a string of patent lawsuits, including one last week against Apple, HTC Corp and Sierra Wireless's U.S. unit over LTE mobile technology. In its filing, Wi-Lan alleges that RIM's PlayBook tablet and a wide range of its smartphones, including the Bold, Torch, Pearl and Storm, utilize technology that infringes on its patent.

"RIM will vigorously defend itself against patent infringement," a spokeswoman for RIM said.

Wi-Lan is seeking an unspecified amount in damages and preliminary and permanent injunctions to block RIM from infringing its patent.

As RIM gears up for its Jan. 30 Blackberry 10 release, analysts are hoping to learn more about the BB10 devices. Pictures, videos and specifications have been leaked in recent weeks, but investors hope RIM offers up more juicy details during its quarterly conference call after the results are released. Will RIM bounce back and regain its market share with the release of Blackberry 10? It surely is keeping its fingers crossed!

 

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Aakanksha19 has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Facebook, and Google and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Apple, Facebook, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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