Research in Motion is betting on the BBX operating system---the primary reason the company is sticking with the PlayBook tablet---but analysts are throwing in the towel on the company's turnaround prospects. Given the pessimism it may be worth pondering what could go right if only for giggles.
Lazaridis and Balsillie
Last week's warning about profits, revenue and PlayBook inventory set in motion a series of doomsday outlooks. What's unclear is whether current RIM management---co-CEOs Jim Balsillie and Mike Lazaridis---has anything up its sleeve to pull the company out of its tailspin.
In many respects, BBX looks like yet another savior product for RIM---a company that has had too many miracle products fail to even take seriously. National Bank Financial analyst Kris Thompson gave RIM a $10 price target.
Thompson wrote:
Many investors are expecting RIM’s new BBX operating system to resurrect the company next year. While we are cheering for this outcome, we have little confidence that any management team could save RIM in its current form. Turning around a $20 billion company with 17,000 global employees in a fast moving, hyper-competitive market is a massive task.
In addition, Thompson expects RIM's subscriber base to peak this fiscal year and then enter "a decay phase from churn as post-paid contracts expire."
Thompson doesn't even believe that RIM's patents are worth much in a breakup or acquisition scenario.
Are things really that bleak? The consensus view is that RIM is screwed and that it will lose enterprise, service revenue and money on every PlayBook it sells. Given the pessimism let's play devil's advocate and ponder what could go right.
Here's a look at the positives:
My point: RIM still has assets and many positives in its corner. What it lacks is credibility. New management could stabilize the company and build from there.
Related: