Why RIM is Dead and Done
Richard is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
I have always thought there to be no middle ground between winning and misery. Show me someone who disagrees with this and I will show you a person that has never competed for anything in his or her life - or for that matter, have ever won anything. “How you play the game” is overrated. This seems to be exceptionally true on Wall Street and in particular in the world of investing and finance where all that matters is the bottom line. So I wonder if investors that continue to make excuses for mistakes made by their company really believe in the things that they are saying.
On the one hand, I appreciate the glass-half-full outlook. However, on the other hand, there is the absurd. One such example is that of beleaguered tech giant Research In Motion (NASDAQ: BBRY). Aside from the fact that the company continues to shoot itself in the foot with events such as its recent network outage, its current investors insist that RIM somehow has been cheated and slighted by the market. It matters very little that Apple (NASDAQ: AAPL) and Google’s (NASDAQ: GOOG) Android devices are top in sales; according to investors, RIM has a much superior product.
Never mind that the company has been unable to deliver the product on time. However, this little fact continues to be ignored. The reality is, not only does Apple and Samsung continue to eat away at RIM’s dying market share, but there is also the fact that Microsoft’s (NASDAQ: MSFT) new Windows Mobile phone is expected to be the nail in RIM’s coffin. What’s more, this is on top of the constant rumors that Amazon (NASDAQ: AMZN) will soon enter the market with its own phone. The question is what will be left for RIM?
Nonetheless, investors insist that a “new RIM’ is on the horizon. Unfortunately, that “new RIM” gets delayed and pushed back each quarter. When are we going to see it? Though the company talks highly about its BlackBerry 10 OS, I can’t help but think that it is just too little too late. Due to its stubbornness and unwilling to adjust its focus of what the enterprise was and where it was heading, it dropped the ball on several markets and opportunities that Apple and Google were able to steal away – this is despite RIM once having a considerable lead in the smartphone market.
RIM insisted that it knew better. It resisted opting out of the enterprise and establishing more of an emphasis on the user experience. Today, it sees the light, but it has become somewhat archaic in its approach. Not only are it phones unappealing to the consumer, its enterprise dominance has diminished to the point where corporations are ready to move on and have started giving in to employee demands of BYOD (bring your own device).
In other words, the benefits of security, BlackBerry messaging and various other features that once presented RIM with an advantage or once considered critical IT “must haves” are gone. RIM unfortunately will be gone too. The only question is when? So for current RIM investors who wish to give the company the benefit of the doubt here, I have to wonder what you are seeing that the rest of the market is not. Also, if you are not feeling some anxiety over RIM’s prospects then I doubt you are paying close enough attention.
For RIM to avoid an inevitable demise, it needs to reinvent itself. Its market is gone and it isn’t coming back. I just don’t believe that the company has the management structure in place to do what is necessary to reincarnate itself in the way that Apple was able to do when it invented the iPod. RIM’s mistakes are just too severe to overcome. Making matters worse is the fact that it doesn’t appear to have learned from them. It’s time that it put itself out of its misery and spare investors the agony of false hope.
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rsaintvilus was long AAPL at the time of publication and has no positions in any of the other stocks mentioned above. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple 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.If you have questions about this post or the Fool’s blog network, click here for information.