Who falls first: RIM or Nokia?

Who falls first: RIM or Nokia?

Summary: Nokia and RIM are in similar boats. Both have suffered extensive market cap losses and share drops, and both are struggling in market share statistics. Which company will fall first?

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It's clear that BlackBerry maker Research in Motion is in trouble. A lack of direction and innovation is coupled with a pinned-all hope that the company can turn its falling share price around with the upcoming BlackBerry 10 operating system.

But the limelight has been firmly on RIM and not on Nokia, the once cellphone market supergiant. Instead, the talk of the town has focused on Nokia's Lumia handset amid the company's falling U.S. smartphone market share instead of Nokia's crumbling company.

If we compare the two, Nokia has fared worse over the past half-decade than RIM has.

The value of RIM's shares has dropped by more than 70 percent in the past 12 months, with its market cap has tumbled from $78 billion to $6.3 billion in three years.

Nokia, on the other hand, has seen its shares drop by 90 percent in five years, and its market cap has dropped from $151 billion to $11.8 billion in four years.

In comparison, Microsoft has remained mostly steady despite an expected hiccup during the 2008--2010 global financial crisis, while Apple was unfazed by the economic blip in which the company saw its worth rise by over five times.

While RIM's downfall has been quicker than Nokia's, the Finnish phone giant has lost more market cap and share value. Arguably, the slightly slower decline than  RIM 's shows Nokia's reluctance in clawing its way back to the top.

Microsoft and Nokia's existing partnership on the smartphone front may force the Redmond-based technology company to come to its friend's rescue.

Last year, the two companies forged a partnership where Nokia smartphones would sell with the Windows Phone operating system, giving Nokia a boost in smartphone sales and Microsoft increased operating system market share options.

Reports suggest Nokia's chief executive Stephen Elop could reach out to his former employer Microsoft for financial help, reports Reuters, after two of the three major ratings agencies rated Nokia's debt to junk status.

One analyst believes a helping hand "to the tune of a couple of billion dollars" could be on the cards, but thinks a Microsoft buy-out remains unlikely. ZDNet's Mary Jo Foley does not think Microsoft would buy either RIM or Nokia, but it certainly doesn't rule out a strings-attached deal to keep Nokia in the black.

With Microsoft shelling out $1 billion each year to Nokia to use its Windows Phone, Microsoft has made clear its commitment to the smartphone market. It has vested interests and cannot see its mobile platform suffer at the hands of its Apple and Google rivals.

In the meantime, in spite of Apple's efforts to push to the top of the smartphone market, Samsung remains the leader in sales worldwide, though figures vary between analytical firms.

J.K. Shin, Samsung's mobile business president, said it had no plans to acquire the BlackBerry maker, according to the Wall Street Journal, despite reports in January suggesting Samsung could bailout the company. The rumour was quickly nipped in the bud by the Seoul-based smartphone giant within hours of the market rumblings.

The BlackBerry maker may be on its last legs but it has an exit strategy. If it can't recoup its losses with BlackBerry 10, it could put itself into the sale arena. The Canadian government said it would not block the sale if a foreign firm wanted to buy the company. RIM still has vast infrastructure operations, making the company a prospective candidate for Apple, which continues to push its iMessage platform.

But Nokia has only one fall-back plan: sale.

Image credit: ZDNet. Data source: YCharts.

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Topics: Security, Mobility, Nokia, BlackBerry

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80 comments
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  • RIM

    Rim seems more wounded. Unless this new system 10 is something really good I can see RIM either being taken over or closing down after 2-3 years. The new nokia windows phone are really good so I am expecting Nokia to survive longer.
    panoslondon1
    • Users are the losers who buy these failed phones

      What happens if the company you bought your smartphone from is a loser, and collapses soon after?

      What has happened in the past is that services get withdrawn. Online features get shut down. After the company fails, the phones become less functional or even useless bricks.
      Vbitrate
      • RE: The world ends?

        Or something equally as sensational in your eyes. Perhaps all your friends leave you, your partner deserts you and you get kicked out of your job. You lose your house and your bank seizes all your assets. You come home to find your locks have been changed.

        Heck, even the dog doesn't come to you any more.

        Is that scary enough for you. Probably best not to buy any phone, hide down in the bunkers and wait for the boogie man to finally come get you.
        Bozzer
      • The same kind of fear that people expressed when XBox was first sold,

        and you are doing exactly the same right now, with Windows phones.

        Microsoft is NOT going to abandon Windows Phone, and they're in it for the long run, just like they were with XBox. If not with Nokia, it will be around with other manufacturers. So, no orphaned phones will be left for many years and perhaps never. If MS were to abandon the smartphone market, they'd be committing suicide, but, that ain't about to happen. Heck, even RIM will be around, in one form or another, even if some company has to purchase them or merge with them.

        The death of Windows Phones is a highly exaggerated rumor.
        adornoe
  • While they're both on shakey ground

    WP 7 has a monopoly to support loses it will suffer. RIM in in a position that of their new OS tanks, so doesn't the company. Nokia Doesn't matter in the long run, as all Microsoft is truly after are the patents. What I would find hilarious is if Nokia tanked and Google (and/or Apple) outbid Microsoft on the patents. :p

    Nokia's stock has fallen to roughly a quarter of it's value since Stephen Elop announced they were putting the company's fate in someone else's hands.
    Jumpin Jack Flash
    • What monopoly?

      n/t
      NonFanboy
      • Microsoft has a mooploy on Desktop Operating Systems

        And it's Microsoft that produces WP 7. You think that if Nokia tanks, that WP 7 will go away?It will cause Microsoft to change steps, but they'll just make a similar deal with a different Handset maker.

        Edit: I see the Angry Minions of Microsoft are attacking the messenger, again.
        Jumpin Jack Flash
    • How was it before Elop?

      It seems as if you want to pin all this on Elop or MS(I think both). However it imagine it to be a huge task to stop a runaway train by yourself.(I am talking about Nokia's stock price) A helping hand was in order because no one there was doing anything about changing directions.
      dogarner
      • Seems Elop had no problem driving the price

        To an all time low. Before Elop the stock price was @$34 per share. Under Elop's expert guidence the stock is now at a "Mind blowing" $3.19 per share. In fat the day before the deal with Microsoft everyone predicted the stock had bottomed out at $11.71 per share, I'd personally short Nokia stock...
        Jumpin Jack Flash
  • RIM

    Nokia has a plan that's already showing results (although quite slowly thinks some shareholders). Meanwhile, RIM has a new on-screen keyboard. :-p
    e_mendz
    • And those rsults are not good.

      In case you missed it Nokia lost nearly[b] $2 Billion[/b] last quarter. The company's stock is losing value faster than they can introduce new phones. The stock it trading somewhere around $3.19 a share, when the day before Nokia said t was Windows, or bust it was trading at around $11.70. To lose 75% of your value, as well as losing large sums of money is never a good sign. The only one that stands to gain anything is Microsoft, as they're first in line to pick over the carcass.
      Jumpin Jack Flash
  • Sony Erricson or LG.

    Though don't rule out HTC, either.
    William Farrel
    • point?

      Im not sure what your point is, are you saying that Sony Erricson(which doesn't exist anymore as it became SONY) and/or LG are gonna fall? Last time I checked LG reported profits from its smartphone unit and their LCD panels due to higher margins. As for HTC im not sure about them they could fall but they were a very small company before. RIM and Nokia are indeed in a freefall. Nokia specially even though they have been doing relatively well with their windows smartphones unfortunately for them,they are an extremely big company so doing somewhat well in one area doesn't alleviate the ails in the whole company.
      wolfn11
      • That's my point.

        Nokia has MS backing, RIM doesn't. Just like LG can "subsidize" crappy phones (IMO) with other units, so Nokia can continue on with MS until they reverse the trend. RIM has an infrastructure that many would want, so they'll continue on in one form or another.

        While all eyes are focused on those two, what's happening with HTC?
        William Farrel
  • RIP Nokia...

    I don't know who falls first, but Nokia is done.
    WP on smartphones? Is that what they bet on to get out of indecisive mess they sunk into in the past 10 years?
    Even if (big if) WP is the perfect smartphone OS - most users had very negative experience with windows on their desktops. Why would they choose WP smartphone?
    vgrig
    • ..what are you talking about?

      .. millions and millions PC's are running with Windows OS. Which is still the biggest selling PC OS and has the biggest market share? And you claim that most of the users have very negative experience with windows? Are you serious?
      TheCat123
      • You do realize that a significant majority of those

        windows machines were purchased by IT departments and issued to users, right? When users are actually free to buy their own machines, a significant portion of them do NOT buy Windows computers.
        baggins_z
      • baggins: You will of course back that up with statistics, right?

        Because right now, you are offering absolutely no proof that a significant majority of Windows PCs are purchased by IT departments.

        Then, once you've provided proof, you'll have the next problem of explaining away why professionals who are in charge of purchasing professional equipment prefer Windows. I am not a professional handyman. When I buy a tool, it is likely not the same tool that the professionals buy. Want to guess who buys the better tools? It isn't me.

        So even if you do end up proving that most professionals buy Windows, you've only succeeded in proving that Windows is the choice of professionals, hardly a damning statement to the quality of Windows.
        toddbottom3
      • baggins_z: It's highly doubtful that there are a couple of billion

        business PCs out there.

        With Windows PCs into the billions, how many do you suppose are in the enterprise or business sector? It's highly doubtful that there are hundreds of millions of PCs being used in the enterprise that are Windows based, and that would indicate that, the vast majority are owned by individuals or home users.
        adornoe
      • adornoe

        Actually if you read closely, Microsoft is counting licenses, many of which are Pre-Activated. When a Fortune 500 company, with thousands of computers gets a new Dell, it comes with a Windows (currently Windows 7 ) license, which is discarded for the company's Software Assurance license. 1 Computer, two licenses.Then there are the server licenses, which like many other shady Software vendors, use CALs, or seat licenses, Which is essentially paying multiple times for the same software. If you have to pay for multiple licenses, the vendor should have to send the install media for each license. You might not agree, but paying thousands of dollars for software, when you get nothing for it, besides an e-mail with a license key, is quite the scam.
        Jumpin Jack Flash