Can RIM survive until BlackBerry 10?

Can RIM survive until BlackBerry 10?

Summary: Shares in Research in Motion, the BlackBerry smartphone maker, have been halted. With everything resting on BlackBerry 10, has the company left it too late?

TOPICS: BlackBerry

Shares in Research in Motion were today temporarily frozen by its management. The BlackBerry maker resumed trading on the Nasdaq no more than fifteen minutes later.

Chief executive Thorsten Heins said that the company will likely suffer an operating loss for the fiscal first quarter that ends on Thursday. It is thought shares were suspended in a bid to protect the company's market cap, currently at $5.7bn at the time of writing and falling.

Had RIM delivered the news while the stock was still actively trading, the repercussions could have been unrecoverable. It is likely tomorrow when analysts have the time to fully examine the company's bottom line, we may see the stock further frozen or another significant drop in value.

RIM's profit warning for the first quarter confirmed what analysts have feared. The company is seeing sales plummet ahead of BlackBerry 10. The bigger question is whether RIM can hold out that long.

Yesterday, reports suggested RIM could be set for further layoffs. The company has suffered a 'mass exodus' of staff, including its chief legal officer and its U.K.-based managing director of sales.

RIM is haemorrhaging employees just as much as it is losing cash and value. The company is running out of ideas and has placed all its eggs in one shaky looking basket.

Earlier this week, I said: "some have argued it’s too late, while others are simply glad the company is still in business." That point has come later than expected, but it was all but inevitable.

The company made almost no bones about the fact it has rested most of its future stake in its forthcoming platform and next-generation BlackBerry 10 smartphones. With an expected release date of October and a plummeting share price, the company may not even reach a point of recovery.

Lost in the bad news from RIM was that the company will have more than $2.1 billion in cash. RIM will continue to cut costs. However, the reality is that RIM is in full-blown lock-down at the moment.

The value of RIM shares have been down 80 percent over the past twelve months, and have slumped more than 10 percent in after hours trading, below the $11 per share mark at around 2 p.m. today.

RIM cannot keep doing 'nothing'. It has to do 'something'. All it has on the table is to get BlackBerry 10 out the door. It hasn't released a good set of phones in years, and despite it resting in third place behind Android and iPhone, barely holds onto the edge.

It needs to get BlackBerry 10 out now. It's all it has. It's the only thing it has left besides the scraps off the cutting room floor. Without a smartphone range, its data infrastructure is simply gathering dust. But BlackBerry 10 isn't ready and it's far from being ready. RIM has to pull something out to keep the market interested.

This is exactly what happened with Palm. Palm was in dire straits and it had next-generation handsets on tap ready to be released, but it was months from selling any product based on its upcoming technology. In the interim, HP bought them, and we all know how that ended up.

It's likely history will repeat itself, and result in a very similar scenario to the Palm--HP sale.

Beyond all else, RIM doesn't have any options left.


Topic: BlackBerry

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  • Self-contradictory article

    First they are "out of ideas", then they need to "get BlackBerry 10 out now"...

    Which one is it? They are far from out of ideas, in fact their ideas are being copied left and right from their PlayBook OS features to the demoed BB10 features.
    • RIM is not out of ideas. They are out of time.

      Having a great product waiting in the wings may not be enough. Studebaker had the Avanti. The car even went into production. I fear RIM and Studebaker will share a similar fate.
      • Rushing a product out will not do any good either

        Yes, they are running out of time (actually they are about 6 years late to the game). But rushing a product that is unfinished, untested and full of bugs is not going to do any good to them.

        If BB10 comes out and all you get is complain after complain, RIM will instantly lose the people how were in a "lets wait & see" mode. A buggy release will be the death of RIM.
  • they need to be more agressive

    in emergent markets, like china india and latin america.

    While they are currently leaders they are losing ground people here its catching up and prefering android phone while its more expensive...

    Increase the needed services at better pricing, i cant understand how can they do not release skype and irc chat client.... even Nokia s60 devices can do better

    Their devices its not bad, but its so limited and app selection its expensive and lacking....

    Make incentive to those who are still supporting your dated platform if they want people to keep on buying dated devices, otherwise people instead of moving to bb10 they look for better alternatives, right now bb7 devices are expensive with no solid key feature other than BBM
  • Try licensing

    Maybe RIM should just focus on software & services and license BB10 to hardware makers, same way MS is doing with Windows Phone. They should start with Samsung & HTC.
  • Options ..

    Unlike Palm RIM has assets, Palm had a old OS and a new OS that no one was using. Palm lost all their user base as they never made the leap from PDA to smartphone until it was way too late. RIM still has a growing user base .. 79 million people which includes countless goverment and fortune 500 companies. Even if next month every single company decides to spin down their BES and move to another platform it would take months to execute and millions buying out wireless contracts, hardware etc.

    I love how Zach write negative article after negative article on RIM yet uses one, Go back to the iPhone that worked so well for you. What the tech blogs don't have the stomach to admit is RIM serves a purpose and no other platform can fill.

    I'll give them time to get BB10 out and they have options and assets around 6 billion so they have some play left ...
    • What "assets" are you talking about???

      And you are totally wrong. Palm actually had more to work with than RIM ... who only has the brand name to back them up. Because product wise ... the competition is already surpassing them.
      • Assets

        Lets see .. they have the gold standard for MDM and a new MDM for all platforms, no other platform comes close. It's also used in pretty much every goverment, corporation on the planet - who wouldn't want to get in on that? It instantly would give the buyer a huge enterprise foothold.

        They are part of a controling group who purchased the Nortel patents, not to mention the hundreds they already have. Do you remember NTP? They sued RIM for almost 500 million for violating 1 patent they held. RIM could sue a ton of people who leverage (steal) their patents.

        They have a slew of acquisitions that do have value - QNX, DataViz, NewBay, TAT etc. When you have somelike like InstaGram selling for millions you don't think RIM's assets have any value?

        A world wide NOC - providing the best in class security / encryption on the market. Used by countless goverment and corporate customers. Heck they could get a bail out to keep the NOC running until millions of users are able to move to another platform, you think that will happen overnight?

        I get the fact there is a serious hate for RIM, people will dance with joy when they fall. Just don't get tired waiting for your dance to start.
      • As the man says...

        Too many folk hate RIM for no good reason. I hate Apple (though I have an iPad, iPhone, but prefer my BB Torch) because I hate the way they tie you in to verything and try to extort even more with everything they are involved in. (I dont get the same feeling with my Asus Transformer complete with Mouse support, USB, uSD/SD, and HDMI as standard).

        RIMs big problem for me is the sheer number of similar handsets. Get rid of them and sell a few at most. Go 'touch'.. I love my Torch with decent touch screen and full keyboard and far prefer that to my iphone when typing in a cab etc. Apps? What apps do I need when I'm at work? Talking Giraffe? Talking Tom? Voice changer? Gimme a break !

        RIM came from nought and built a massive infrastructure in a very short period of time. I'm sure the brains behind all that still have a little more wisdom than you and hopefully pull it off. An Apple world will be a very poor world as far as i'm concerned. Variety, and choice to us all please!
    • palm never made the leap to smartphone?

      wow. What a clueless statement. They pretty much made the category with palmOS and the likes of Kyocera, Samsung and Handspring. The problem was it was an aging platform that dead ended and couldn't continue where technology was heading. Then they took too long to bring webOS out and compounded it by lackluster hardware that never took off.

      And even if RIM has other things going for it, if it can't make a profit, it'll go down. Just because companies are using them on the infrastructure and software side, if people don't want their hardware, they'll go down. They can't survive as a niche. No one will develop for a niche when they have android and ios. No one will want their hardware if it doesn't have a strong ecosystem.
  • mmmhh takeover by microsoft

    mmmhh takeover by microsoft... be a good way for MS to control more of the patents they got from nortel... and might give the windows phone an edge in enterprise
  • Forget it. Adopt Android. Stay in business.

    Nobody wants to use Blackberry OS anymore -- it's ancient already. Android is where all of the surviving non-Apple phone makers are going.

    Nokia is also making a huge mistake with Windoze, the perennial failure in the mobile market.

    Both companies must adopt Android in order to compete. They won't be able to beat Android, and maintaining your own mobile OS is a fool's errand in today's market where the top two mobile OSes have literally hundreds of thousands of apps and an incredible amount of functionality (and complexity).

    Maybe this story should have been titled, "How to burn through $2 billion before the end of 2012, and have nothing to show for it except a bunch of angry shareholders."
    • Sadly no.

      HTC and LG and a slew of others 'adopted' Android and is struggling in the market. Android = Samsung. Nokia was correct choosing Windows Phone, it gives them something different and looking at the Lumia 900 it's working. Yes it will take some time to get in on the 59% marketshare Android holds.

      Nokia and RIM will collapse even further if they put their eggs in the Android basket. They won't be able to compete with Samsung...nobody can.
      • Samdroid

        Let's face facts, Samsung now owns Android. It takes all the profits from Android. No one else makes a penny not even Google.

        Samsung: Samdroid
        Apple: iOS
        Nokia: Windows Phone
        RIM: Blackberry OS 10

        There's no hope for RIM in adopting Samdroid OS.
        The Star King
    • Too many Android phones

      Can you imagine if Blackberry and Nokia adopted Android. As if we don't have too many Android phones to choose from already. If another 2 manufacturers came on to the Android platform, we would be overwhelmed.
  • I largely agree....

    While RIM's been huddling around BB10, trying to make it viable, the market has moved it. It will be practically impossible for them to get back in the fray now.

    The only way out is a sale and hope that someone values their patents enough to buy the whole company for them.
  • no developers

    I am a developer, and the only reason why I would develop on black berry or windows phone is because there will be so few apps that I can sell my apps at a higher price.