RIM: The obits are a bit premature

RIM: The obits are a bit premature

Summary: Days before Research in Motion launches its PlayBook tablet analysts and tech observers are scrambling to predict the demise of the company. The gloom and doom may be misplaced.

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Days before Research in Motion launches its PlayBook tablet analysts and tech observers are scrambling to predict the demise of the company. The gloom and doom may be misplaced.

Look, it's obvious that RIM has a few issues. Consider:

  • RIM co-CEO Jim Balsillie was so upbeat about the company's product roadmap that you wonder how he'll hold his job if the PlayBook flops.
  • The PlayBook is a frankentablet that can run Android, BlackBerry and QNX. If the PlayBook is seamless, it'll be a virtualization dream. If not, the PlayBook will be a slow motion trainwreck.
  • RIM talked up its next wave of BlackBerries, but those devices will run on BlackBerry OS 6.1. The problem: We all know that QNX devices are coming in 2012. Why would we buy a BlackBerry based on a soon-to-be-outdated OS?

Needless to say, these worries have tipped over RIM's bandwagon.

Jean-Louis Gassée, partner at Allegis Capital and a long-time tech veteran, notes that RIM has lost its mind. The conclusion is that RIM is rushing a tablet out to market and that the inmates are running the asylum.

Tom Krazit at PaidContent argues that RIM will be forced to sell if it has a lukewarm reaction to the PlayBook. He likens RIM to Palm. Krazit even argues that Microsoft could buy RIM. We'll overlook Microsoft's partnership with Nokia as we ponder the software giant buying RIM too.

Let's get one thing straight. RIM isn't Palm. For the fiscal year ending Feb. 28, RIM had $1.79 billion in cash and $330 million in short term investments. For fiscal 2011, RIM reported net income of $3.41 billion on revenue of $19.9 billion. Even if you assume the floor completely falls out from under the company RIM has the financial heft to be a player. Simply put, RIM won't be knocking on Bono's door for funding anytime soon.

In fact, so many analysts were downgrading RIM to "sell" on Friday that the contrarian in me wonders if the company is on the right track. Here's a recap from Wall Street's peanut gallery after RIM's disappointing first quarter outlook and calls for a huge second half rebound in fiscal 2012.

Deutsche Bank analyst Brian Modoff downgraded RIM and said that the QNX operating system will fragment itself. Fair enough. Supporting Android gives developers no reason to bother with QNX. This fragmented OS approach is the result of a co-CEO structure, argues Modoff, who adds that RIM has conflicting strategies. "We can think of few examples of companies with co-CEOs that have fared well," said Modoff. "We believe the multiple-choice approach to OS is a symptom of conflicting strategies internally." The problem with Modoff's argument: Balsillie has been co-CEO of RIM since 1992. That's quite a run.

Other research notes indicate that analysts don't believe RIM's confidence about fiscal 2012. Balsillie talked up the BlackBerry Torch last year and the device was solid, but far from spectacular.

Add it up and expectations are very low for RIM and its PlayBook. And that typically spells opportunity. Remember this: All RIM has to do is defend its enterprise turf with the PlayBook and the tablet will be a success. Apparently no one thinks RIM can rebound except for Balsillie. If he's right this time RIM will be a big surprise. If Balsillie is delusional, the company will continue to live off of its international sales and its enterprise installed base. Many companies would take RIM's worst case scenario any day.

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Topics: Tablets, Hardware, Laptops, Mobile OS, Mobility, BlackBerry

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27 comments
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  • Waiting for 2012?

    There's not a person I know that doesn't replace there phones every 12-18 months. Even the carries offer upgrades every 12 - 18 months depending how valuable client you are. It's a BS argument for not buy the upcoming BB 6.1 devices because QNX is coming in 2012.
    Richard1111
    • Besides, Playbook has weak graphic co-processor: SGX-540 against SGX-543MP2

      @Richard1111: ... in iPad 2 (difference is <b>few times</b> of speed); also, it is not confirmed whether TI's OMAP chip has full-fledged FPU co-processor like A5 has, or it is cheaper version of reference design like Tegra-2 has (difference by order).<br><br>Also, Playbook has weak battery life, it is thick, it is plasticky, and has almost no tablet applications.
      DDERSSS
      • RE: RIM: The obits are a bit premature

        @denisrs

        Hypple monkey spreading FUD because you've never touched a Playbook let alone use one.
        Intosh
      • So *you* have touched Playbook? How do you touch a vaporware? Please teach

        @denisrs: ... me. ;))

        Besides, no matter if you touched it or not, I talked about characteristics' differences, not some taste approaches/opinions.

        The fact that you only could say to that is matter of taste/touch answer, is self-explanatory.
        DDERSSS
      • RE: RIM: The obits are a bit premature

        @denisrs

        If it's vaporware, how did you know it's thick, plasticky and has weak battery life?

        Keep making a monkey out of yourself. LOL
        Intosh
      • RE: RIM: The obits are a bit premature

        I am unsure where you are looking but thereis no way that the Ipad2 has the power of the Playbook - how much Ram, probably only 256 or 512 as Apple haschosen not to disclose...
        Batttery life has been stated at about 10 hours at medium load....
        As for the feel the Playbbok is built for the real world not the kitchen table.
        Ejeff
      • RE: RIM: The obits are a bit premature

        @DeRSSS
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        jackfolla
  • Predictions of RIMs demise are because ....

    ... they keep rushing out UNFINISHED products.

    They sat down for years thinking that nobody could dethrone them. Now they are just rushing out totally unfinished products trying to catch up with the rest of the world ... who moved away from RIM.

    The demise of RIM is very visible and only RIM can't see it. They became complaisant while ignoring signs that the product line was becoming obsolete.

    This day and age having a BB just says "I'm an old geezer" instead of "I'm an important professional person"
    wackoae
    • be aware... criminals now prefer the BB...

      @wackoae

      Organized crime is a business. They value encryption. And with a BB, they can get encryption on a level that lets them be harder for the police to track... There have been reports about the whole issue of "does BB have too much encryption", and this is one of the things cited as to why BB shouldn't be so well encrypted.
      shryko
      • RE: RIM: The obits are a bit premature

        @shryko Drug dealers lock up their stash too. Maybe locks shouldn't be so strong.
        jgm@...
    • RE: RIM: The obits are a bit premature

      @wackoae

      Using a BB means that I value productivity, efficiency and reliability over playing games.

      Androids are for people that like playing with their gadgets and iPhone is for people that like being told what they can do and not do by Steve Jobs and enjoy vendor lock-in.

      Look at all of the people trying desperately to find a way to sync their Android or iPhone to NOTES and TASKS in Outlook. Blackberry is the only one that can do it easily.
      John Hanks
      • Re: I value productivity, efficiency and reliability&acirc;?&brvbar;

        @john@... Please tell me what many of us are missing.

        Today (3/30) at http://docs.blackberry.com/en/developers/?userType=21, there is mention only of AIR and Web development tools. Nothing about Android, java or native C toolkits. Not even an ?under construction? sign.

        So all the Playbook productivity tools such as your Powerpoint equivalent are going to be written by RIM; a third party will use AIR to supply your customized CRM system, perhaps your inhouse guys will bypass Concur and spend a long weekend to knock together a web app for your expense tracking system that embeds photos of receipts, maps to hotels, etc.

        Or perhaps not. AIR is a pretty good environment for writing games, though, and with you won't have to worry much about synchronizing your tasks and notes over a non-existent web client.

        Or are you talking about the Playbook as a bigscreen, Rube Goldberg attachment to a BlackBerry phone? One that requires twice the hardware expense for a modest increment to productivity? Tell me: is THAT what you would design if you had a free choice, or is it merely a reaction that it's not impossible to work that way if you had it rammed down your throat?
        WaltFrench
  • The Wall Street Stock Manipulation Conspiracy might be alive and well.

    Have analysts ever downgraded a company on speculative reports only to buy that company's stock at an artificially low price and then see this company "magically" rebound on a hot product?

    I'm sorry but I've never EVER seen that scenario happen before! Grin.
    kenosha77a
    • RE: RIM: The obits are a bit premature

      @kenosha7777 <br><br>EXACTLY. <br><br>And I thought after the mortage derivative catastrophe, people had opened their eyes. Instead, we see Joe Blow who pretends he knows the truth by explaining to us why RIM's stock moves this or that way (e.g. because of "UNFINISHED products", being "complaisant" or whatever regurgitated reasons).
      Intosh
    • ...and this is one reason I'm thinking &quot;buy&quot;. &lt;nt&gt;

      @kenosha7777

      I don't think RIM is doomed, and either way, there's now a discount on RIM stock!!!
      shryko
    • Manipulation?

      @kenosha7777: The stock traded down ~ 10% in after-market trading virtually instantly on the rambling, incoherent and almost paranoid remarks. These were reacted to *hours* before the analysts could think about what tone to use in their writing.<br><br>Basically, people who held the stock wanted out and had to be willing to take a huge haircut to get it off their hands. The next day, still before most of the analysts had put words to their shock, a huge flood of sells (and by definition, also buys) as people's perceptions about the prospects were put into action. Mr. Market has apparently decided that RIM's prospects for future earnings are about 10%-15% lower than before the quarter's news was released.<br><br>Now Wall Street is a fickle, usually shallow bunch that understands very little about technology. But the apparent conclusion is that RIM still does not have a competitive offering to the high-end smartphones such as Androids and iPhones, and will be forced to sell much less expensive (much less capable) phones. (And let's be clear: the thrust of the company comments were exactly that they weren't selling as many profitable devices.) Likewise, the shock reaction suggests many think that the Playbook will offer little to regain their previous crown of the go-to organization for mobile communications.<br><br>My take is in line, although I have been anticipating a more dire reaction to what seems incredibly inept developer relations in an app-centered world: the wikipedia disruptive technology page could have been written about their slow response to the iPhone revolution.<br><br>PS: no long or short position ever in RIM. Not the way my clock ticks.
      WaltFrench
  • RE: RIM: The obits are a bit premature

    Its great matter for Mr. Jim Balsillie. He knows well how he have to manage these all.

    http://www.cellhub.com/t-mobile-cell-phones/nokia-astound-frosty-metal.html

    Nokia Astound
    deeepjhonny12
  • RE: RIM: The obits are a bit premature

    I will not use Blackberry or Symbian as my next mobile phone anyway. Android has the biggest possibility.
    jchen1518
  • RE: RIM: The obits are a bit premature

    People has written off RIM just like they have written off Microsoft. Last time I checked both still have a core business that is still very profitable. This is just people's wishful thinking. They want Apple to take over the world and the competition JUST WONT GO AWAY.

    There is plenty of room in the mobile space and there is gobs of space in the tablet space. Competition is good.
    mstrsfty
    • RE: RIM: The obits are a bit premature

      @mstrsfty
      This is not about Apple taking over the world. These are facts. Android is becoming the new 'Windows' and old established players will lose (RIM, Microsoft, Nokia...). I cannot see the PlayBook making any difference. The fact that it will run Android apps only shows that RIM knows which way the mobile market is going.. If you remember, IBM developed OS/2 which ran DOS applications, and you know what happened to OS/2...
      prof123