For RIM, Friday the 13th Surely Lived Up to its Reputation!
Rita is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Friday the 13th, an unlucky day as per the western superstition, surely lived up to its reputation as the already troubled BlackBerry maker Research In Motion (NASDAQ: BBRY) was pushed further in to trouble. The recent past has been like a nightmare for RIM. The company witnessed itself falling from grace, lost market share, flagged disappointing results and even its Knight in Shining Armour “BlackBerry 10” is nowhere in sight to rescue the company. The only thing missing in this bad picture is a lost patent suit.
The big blow. The final blow?
And here comes what was missing. The troubled smartphone maker recently lost a patent suit against Mformation Technologies and now will have to part with a whooping $147 million in this context. The patent fight, which started in 2008, revolved around Mformations’ claim that RIM infringed its patent on technology to remotely manage wireless devices and that the BlackBerry Enterprise Server developed by RIM has in its core the technology created by Mformation in 1999 with patent rights being issued in 2005. Mformation claims, after it briefed RIM about the technology, RIM went ahead with developing the technology all by itself without getting it licensed by Mformation. According to Mformations’ lawyer Amar Thakur, his firm’s technology has been fundamental to RIM’s success and definitely deserves recognition.
Thanks to the lost patent suit, the jury of the Northern California district has asked RIM to pay Mformation $8 for each of the 18.4 million units sold during the lawsuit period, resulting in a total amount of $147.2 million. This is surely a big blow for RIM. The company is in a tight cash position and in the latest quarter it suffered a huge loss of $518 million. There couldn’t have been a worse time for this to happen and in words of Camri Levy - “There's never a good time to lose a $147-million judgment in court but there certainly is a worst time and this clearly is it for RIM.”
RIM could have used this money to aid its new product development which seems to be very crucial at the moment. But, does this mean all that BlackBerry stood for was not its own from the very beginning? The company so well known for unmatched security features created itself on someone else’s technology? This lost lawsuit is going to have a deep psychological impact on the minds of the users as well. RIM is not only losing $147 million but also the respect which till now it commanded. This might very well be the final blow to finish off RIM.
No signs of relief
The timing of this ruling couldn’t have been worse for RIM. The phone maker is on the verge of dying. Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) have moved far ahead in the competitive landscape with their ultramodern and catchy offerings. These giants are introducing new items to their portfolio of offerings every day and making things more and more difficult for RIM to make a return. But, the problem is with RIM also. Its attitude towards the launch of BlackBerry 10 is just not acceptable.
Apple, Google, Nokia (NYSE: NOK), Microsoft (NASDAQ: MSFT) – all are busy planning their portfolio for the forthcoming holiday season. Apple is almost all set to unveil the iPhone 5 in the coming one or two months. Google is ready with Jelly Bean, the latest version of Android. Even Nokia which has been struggling as bad as RIM is making serious efforts to turn its wheel of fortune. The company is making substantial progress in bringing out low-priced Microsoft’s Windows powered smartphones as well as working rigorously to roll out the Windows Phone 8 powered high performance phones. But, sadly, Research In Motion is a research without progress. Even the management is not dead sure if they can launch BlackBerry 10 by March 2013.
It’s only logical to keep in mind Thanksgiving and Christmas while thinking of launching new products and it’s also very clear that BlackBerry 10 will miss the holiday season. So, on what grounds can Thorsten Heins, RIM's CEO, still think of a good turnaround for RIM? Missing out on the season is not a matter of joke. Maybe Nokia actually will be able to improve its situation while RIM will act as a idle spectator. Shares of the company which were trading at more than $30 one year back have plunged to $7. I think it will be wise only to abandon this sinking ship.
analyse360degree has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, Microsoft, and Nokia. 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.If you have questions about this post or the Fool’s blog network, click here for information.