Don't Say Good-bye Just Yet to This Fallen Giant

Diane is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Research in Motion (NASDAQ: BBRY) shares have enjoyed a stellar run over last few months, climbing from a paltry $6 a share to better than $13. But mountains of worries still plague the company and they were recently stoked anew when the Canadian based company reported its latest earnings.

The maker of BlackBerry smartphones, set to debut its highly anticipated BlackBerry 10 devices on Jan. 30, experienced a serious setback after reporting third quarter earnings on Dec. 20. Shares tumbled 10.4% following the release and have waned since. The disappointing quarter was a dismal reminder of how far and fast this once high-flying tech company has fallen. Shares reached nearly $150 apiece just a few years back, but have fallen from grace and languished since. Its current price, barely hovering at double digits, and recent gloomy performance, underscore the challenging road that lies ahead for RIM.

While RIM posted better than expected numbers, applauded by shareholders and analysts, it also lost about one million subscribers in the quarter. The loss marked the first time membership for its once coveted BlackBerry phones has fallen. The loss also rang-up a good deal of concern. 

RIM's subscriber count is crucial to its survival, which is truly looking quite iffy.

While RIM's BlackBerry phones do have a cult-like following, once so frenzied the habit forming devices were given the monikers "crackberries," it has been losing even die-hard fans to the plethora of other smartphones now available, such as Apple's (NASDAQ: AAPL) iPhone, and devices running on Google's (Nasdaq: GOOG) Android operating system.

Apple continues to wow and woo new and current customers with updated features that make their iPhones must-have products. Apple customers think nothing of shelling out some big bucks for a new iPhone even if their present iPhone is still somewhat fresh. Meanwhile, the vast majority of smartphones sold and gaining traction on the iPhone, albeit mild traction, are based on Google's Android system.

While RIM has definitely lost some of its swagger, it still has roughly 79 million devoted global subscribers. Next year, and the launch of BlackBerry 10, will most certainly be make-or-break for RIM.

The company hopes that its loyal following will embrace the new BB10 and trade in their old Blackberry for the new, updated, souped-up version. RIM also hopes that the upgraded smartphone will excite and attract new consumers as well. 

Blackberry fans like myself shutter and cringe at the thought of life without their Blackberry. I for one will be waiting in line (let's hope there is a line) for the BB10.

If BB10 doesn't bring some life to struggling Research in Motion, shareholders aren't likely to hang-on and will instead hang-up on the company without so much as a good-bye. And, Blackberry users may find themselves disconnected.


Diane Alter does not hold a position in RIMM although she does own and use a dated BlackBerry. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. 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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