RIM's Woes (Part 397 of an ongoing series)
Terry is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Full disclosure upfront: I own 300 shares purchased at an average price of about $30 CAD. That means I'm not bitter at all (of course I am!). If I thought my blog post had market-moving potential I would title it something like "Why RIM is Poised for a Comeback," but unfortunately, I don't hold any Cramer-like powers of market-swaying ability, and I have agreed to be honest in my postings.
So RIM's (NASDAQ: BBRY) problem: poor execution from the board down. To highlight an example, I wrote a letter to the board and several senior officers in early March (several of whom have since departed). It was sent snail-mail and addressed C/O the corporate headquarters in Waterloo in most cases, but in a few cases I sent it to other offices (Prem Watsa, and Roger Martin, maybe a few others). I received no reply until two months later when I was sent an email from "Brad" listed as CSO customer loyalty (no mention of what CSO stands for - possibly "Customers Screw Off"). It was a form letter that mentioned my "recent letter" and directed me to another email address where I could submit suggestions. I replied to "Brad" and told him I hoped he wasn't participating in an employee stock purchase plan (I hope he listened, the stock is down over 30% since then) but he hasn't responded; he may have been laid off the following week.
So what is the problem with the above? Shouldn't they be concentrating on righting the ship and bailing water instead of answering emails from angry hacks? Well, yes and no. The board's duty of care is to the shareholders, and they have obviously been neglecting their duties for some time - the phrase "asleep at the switch" comes to mind. As a shareholder it would have been nice to get a response, but I would have settled for some kind of strategic vision that would bolster the share price. To receive neither is rather disappointing.
It also speaks to the culture at RIM - how they feel about shareholders, and how quickly they respond to the external world in general. I recall some stories of Steve Jobs answering support phone calls and emails personally. While these stories may be apocryphal, they fit with the culture at Apple (NASDAQ: AAPL) and you would never hear stories like that coming from RIM - or at least I haven't. I wonder how many of the announced layoffs will come from customer-facing positions?
In the interests of space, I haven't included my original letter (it was 6 pages and included a diagram for a new tablet) but you can see the letter from Customer Loyalty and my response below.
I am contacting you on behalf of the Customer Loyalty team within Research In Motion Limited (RIM) in response to the concerns you shared in a recent letter.
We value your feedback and we really appreciate you taking the time to send us this letter. Customers like yourself are going to ensure BlackBerry has a solid customer base for years to come. I will ensure your letter gets passed on internally.
For future reference we have created a special email address that allows our customers to submit suggestions related to BlackBerry development. We encourage you to submit your suggestions to email@example.com.
Please let me know if you have any further questions or concerns.
CSO Customer Loyalty
Research In Motion Limited
I think you might have me confused with someone else. You mention a "recent" letter from me. The last letter I sent was about 2 months ago. I can't imagine that 2 months is considered recent in a business built on instant communication. But just in case you're not mistaken - thanks for the totally formulaic and form-letter-like reply to the 12 or so letters I sent and signed by hand and took the time to mail. Just so you know, customers like me probably won't ensure that Blackberry has a solid customer base for years to come. Customers like me hear stories about how Steve Jobs used to reply to emails himself once in a while, and wonder why we're putting up with second-rate service, design, software, and hardware. Customers like me will eventually switch to a different phone with more apps.
I also doubt that you will ensure my letter gets passed on internally, because 3 or more of the people I wrote to have since left the company - smarter than I am evidently, since I still hold shares.
You said to let you know if I had any further concerns - I do. What's with trying to focus on "The business market"? There is no more pure "Business market" that's why you guys are getting killed. People want to bring their cool home phones to work with them, and businesses all over are starting to let them. You won't see people carrying a "business" phone and a "personal" phone in a couple of years (not that many still do). They'll just be personal phones with some kind of enhanced security - probably from a 3rd party provider, not a phone maker.
I'm also kind of disappointed that of the 12 or so letters I sent 2 months ago, I got 1 lousy form-letter reply probably sent from a robot (are you a real person Brad? or is that what they call the Business Reply Automated Delivery system at RIM?). It doesn't leave me much faith in the board there. I'm going to write to Pershing Square next and see if Ackman can go all CP on those guys, God knows they're not exactly shooting the lights out quarter after quarter.
Anyway, thanks for taking the 30 seconds to send me that email, it really made me feel like my opinion was valuable. For your sake I hope you're not taking part in any employee share purchase plan. I would go with the fruit company in Cupertino any day, or maybe an Android maker?
Terry Hogan owns 300 lousy shares of lousy RIM. He has sold covered calls on 200 shares so that his loss of $7,000 has been reduced by a couple of hundred bucks. He unfortunately does not own any Apple, other than a few bruised golden delicious that sit on his kitchen counter.
*If Brad had followed Terry's advice, and took any money he had in RIMM and put it in AAPL, he would have saved himself a 34% decline in the RIMM and gained about 5.5% on the AAPL. Too bad Terry didn't take his own advice.
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