The Future of RIMM

  • Posted: 19 June 2011 09:43 PM

    Barron’s has stated RIMM is their worst stock choice of the year. I credit Jeff (Mercel) for a consistent and rather blunt view of RIMM’s prospects even before last week’s performance and financial revelations.

    How best for RIMM to improve quarterly performances? Is it really a takeover candidate? if so, what enterprises might be interested in the acquisition?

    Is RIMM now a contrarian play considering the low valuation or a stock that should simply be avoided?

         
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    Posted: 19 June 2011 10:31 PM #1

    DawnTreader - 20 June 2011 12:43 AM

    Barron’s has stated RIMM is their worst stock choice of the year. I credit Jeff (Mercel) for a consistent and rather blunt view of RIMM’s prospects even before last week’s performance and financial revelations.

    How best for RIMM to improve quarterly performances? Is it really a takeover candidate? if so, what enterprises might be interested in the acquisition?

    Is RIMM now a contrarian play considering the low valuation or a stock that should simply be avoided?


    I think they should be avoided.  The time to ‘comfortably’ short them is done, in my opinion. 

    Their two CEO’s suck..  I can’t stand people that can’t take resposibility and talk straight. 

    I bet that that phone doesn’t come out ontime in the fall as they promised..  which is just another example of their dump-truck antics.


    EDIT: just for the record..  I wouldn’t take Barrons seriously.  They are notoriously late to the party in my opinion.

    [ Edited: 19 June 2011 10:36 PM by blaze biscuits ]      
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    Posted: 19 June 2011 10:44 PM #2

    DawnTreader - 20 June 2011 12:43 AM

    Barron’s has stated RIMM is their worst stock choice of the year. I credit Jeff (Mercel) for a consistent and rather blunt view of RIMM’s prospects even before last week’s performance and financial revelations.

    How best for RIMM to improve quarterly performances? Is it really a takeover candidate? if so, what enterprises might be interested in the acquisition?

    Is RIMM now a contrarian play considering the low valuation or a stock that should simply be avoided?

    The danger of a further short is that senior management changes are inevitable, even the dumping of the two headed monster at the top. When this happens the stock will pop, temporarily, on hope and new promises. It won’t last, of course, but timing the short would be tricky.

    RIMM makes money. Not as much as they planned to, but profit nonetheless. They also have a combined hardware/software ecosystem. They will continue to lose the high end Enterprise market while selling well into the third world. This will ‘mask’ just how weak they are becoming, as profit per unit steadily drops. The brain drain is underway and layoffs will encourage real talent to leave.

    The spiral is long, downward and gaining speed.

    Where might the Canadian government be in all this, if anywhere?

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  • Posted: 19 June 2011 11:04 PM #3

    DawnTreader - 20 June 2011 12:43 AM

    Barron’s has stated RIMM is their worst stock choice of the year. I credit Jeff (Mercel) for a consistent and rather blunt view of RIMM’s prospects even before last week’s performance and financial revelations.

    How best for RIMM to improve quarterly performances? Is it really a takeover candidate? if so, what enterprises might be interested in the acquisition?

    Is RIMM now a contrarian play considering the low valuation or a stock that should simply be avoided?

    I made a big mistake after I sold RIMM at $72:  I did not short it. 

    I’m not inclined to do anything here.

         
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    Posted: 20 June 2011 12:40 AM #4

    Lets see how likely it would be for the big players to own it:

    Apple wouldn’t buy it for anything other than patents if it dropped low enough. (does it have many patents worth owning though?)

    Microsoft or HP? might both be interested to add BBM service subscribers to their respective mobile divisions and build in the BBM functionality into WP7/WebOS. Could see a nice biiding war there perhaps.

    Google? probably happy to continue developing its own free messaging service in the same style apple has doen with iMessage.

    Nokia? possibly in partnership with Microsoft? could be interesting also.

    Maybe a player out of left field? Dell? HTC? Samsung? Acer? Lenovo? Cisco? Oracle? impossible to rule out anyone.

    So yes, plenty of potential for a bidding war, but the question is how low it would have to drop before one would start.

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  • Posted: 20 June 2011 12:53 AM #5

    iOSWeekly - 20 June 2011 03:40 AM

    Lets see how likely it would be for the big players to own it:

    Apple wouldn’t buy it for anything other than patents if it dropped low enough. (does it have many patents worth owning though?)

    Microsoft or HP? might both be interested to add BBM service subscribers to their respective mobile divisions and build in the BBM functionality into WP7/WebOS. Could see a nice biiding war there perhaps.

    Google? probably happy to continue developing its own free messaging service in the same style apple has doen with iMessage.

    Nokia? possibly in partnership with Microsoft? could be interesting also.

    Maybe a player out of left field? Dell? HTC? Samsung? Acer? Lenovo? Cisco? Oracle? impossible to rule out anyone.

    So yes, plenty of potential for a bidding war, but the question is how low it would have to drop before one would start.

    We’re looking at the beginnings of massive market consolidation.  The value of RIMM is going to continue falling.  In light of continued share advances by Apple, Android (on the low end) and maybe HP, with MSFT/NOK in the wings, I doubt that anyone would be interested in going up against that group.

    Except for intellectual property RIMM is toast.

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    Posted: 20 June 2011 01:08 AM #6

    Gregg Thurman - 20 June 2011 03:53 AM
    iOSWeekly - 20 June 2011 03:40 AM

    Lets see how likely it would be for the big players to own it:

    Apple wouldn’t buy it for anything other than patents if it dropped low enough. (does it have many patents worth owning though?)

    Microsoft or HP? might both be interested to add BBM service subscribers to their respective mobile divisions and build in the BBM functionality into WP7/WebOS. Could see a nice biiding war there perhaps.

    Google? probably happy to continue developing its own free messaging service in the same style apple has doen with iMessage.

    Nokia? possibly in partnership with Microsoft? could be interesting also.

    Maybe a player out of left field? Dell? HTC? Samsung? Acer? Lenovo? Cisco? Oracle? impossible to rule out anyone.

    So yes, plenty of potential for a bidding war, but the question is how low it would have to drop before one would start.

    We’re looking at the beginnings of massive market consolidation.  The value of RIMM is going to continue falling.  In light of continued share advances by Apple, Android (on the low end) and maybe HP, with MSFT/NOK in the wings, I doubt that anyone would be interested in going up against that group.

    Except for intellectual property RIMM is toast.

    RIMM can hardly expect to keep its once lofty smartphone marketshare with such pitiful hardware & software - But with the massive growth of the smartphone market even if RIMM manages to keep only 5% marketshare then isn’t it possible it could continue to operate as a smaller but profitable little company? Afterall it seems they are still growing their marketshare everywhere except North America (I could be mistaken on that last issue, correct me if I’m wrong). Granted there phone ASP is falling, and taking their GM below the 40% range - But is this not much better than all competitors but apple?

    Best thing they could do was ensure that all there phones play nicely with the ipad (maybe build a BBM client for iOS for RIM phone owners).

    Of course dont get me wrong, Personally as an AAPL investor I hope RIMM goes out of business tomorrow.

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  • Posted: 20 June 2011 02:43 AM #7

    The BOGO offers pumped up the unit sales and when the majors jumped off BlackBerry in favor of other highly discounted deals the fall in unit sales seemed even more precipitous.

         
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    Posted: 20 June 2011 01:59 PM #8

    And then there is this.

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    Posted: 03 August 2011 10:43 AM #9

    AUGUST 3, 2011, 9:30 AM ET
    RIM To Offer BlackBerry OS 7.0 Phones This Month
    By Tiernan Ray

    Research in Motion (RIMM) this morning officially announced its long-anticipated BlackBerry devices running on the refresh of its operating system, OS 7.0, will be available later this month, ending a period of several months? worth of hand-wringing and speculation as to when the devices would arrive.

    The vague language suggests the devices could still contribute to this fiscal Q2, which will end a couple days before the end of the month, as noted yesterday by RBC Capital?s Mike Abramsky.

    The new devices, which feature a 1.2 gigahertz processor, HD video recording, 24-bit graphics, and ?advanced sensors,? include the ?Bold 9900,? ?Bold 9930,? which combine a touch-screen with the familiar BlackBerry keyboard; a model with a slide-out keyboard, the ?Torch 9810,? and two models with just a touch-screen, the ?Torch 9850 and ?Torch 9860.?

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    Posted: 03 August 2011 11:40 AM #10

    http://www.engadget.com/2011/05/02/rim-announces-blackberry-os-7/

    Update: RIM has just noted that there will be “no legacy support” with BB 7, meaning that older devices, even those running version 6 of the OS, won’t be getting any (official) updates to the latest stuff. This has been justified by how tightly integrated the software build is with the underlying graphics hardware in the touch-capable Bold handsets. Basically, the old phones won’t be able to run the new OS. Oh, and in case you were wondering, there’s no trace of QNX in BB 7.

    So, this new OS won’t run any of the apps written for the current Blackberries, won’t run apps from the Playbook and will most likely be replaced by anoter version of the OS written in QNX. If you were a developer, how much effort would you put into developing for BB OS7?

         
  • Posted: 03 August 2011 11:49 AM #11

    CdnPhoto - 03 August 2011 02:40 PM

    So, this new OS won’t run any of the apps written for the current Blackberries, won’t run apps from the Playbook and will most likely be replaced by anoter version of the OS written in QNX. If you were a developer, how much effort would you put into developing for BB OS7?

    This phone is the last model of an end-of-life operating system. Like the recent Symbian products from Nokia, why would anyone buy it? (Rhetorical question.)

         
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    Posted: 03 August 2011 12:39 PM #12

    I was about to post a couple of images of how the new Blackberries look exactly like the old Blackberries, but I couldn’t access the image from their site.

    So, I looked into the code for the website. It turns out, even they know the iPad is what people really want:

    if ((navigator.userAgent.match(/Android/i)) || (navigator.userAgent.match(/iPhone/i)) || (navigator.userAgent.match(/iPod/i)) || (navigator.userAgent.match(/iPad/i)) || (navigator.userAgent.match(/BlackBerry 9800/i)) || (navigator.userAgent.match(/PlayBook/i))) {
            
    var iPadCSS document.createElement('link');
            
    iPadCSS.rel "stylesheet";
            
    iPadCSS.href"/assets_refresh/css/iPad.css";
            
    iPadCSS.type"text/css";
            
    document.getElementsByTagName('head')[0].appendChild(iPadCSS); 

    The page they send you to if you’re on an Android, iOS device or a PlayBook is not called HTML5, or PlayBook, but “iPad.css”

         
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    Posted: 03 August 2011 10:48 PM #13

    The new phones announced today, the BlackBerry Bold 9850/9860, BlackBerry Torch 9850/9860, and BlackBerry Torch 9810, will not be able to upgrade to QNX. Instead, you’ll have to buy a brand new dual-core BlackBerry phone designed to run QNX.
    This information was confirmed to us by a RIM rep.
    Right now, we know nothing about these dual-core phones other than they’re being tested by RIM right now. Our best guess is that they’ll arrive some time next year.


    Read more: http://www.businessinsider.com/blackberry-7-phones-wont-upgrade-to-qnx-2011-8#ixzz1U1L0jHlf

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  • Posted: 04 August 2011 02:48 AM #14

    RIM outgrew its management several years ago.  It took awhile for the effects to become visible.  It is not a pretty sight.

    Sad for many reasons, not the least of which is that RIM has a lot of talented people.  And unlike when a Silicon Valley company founders, it is not easy for them to just walk across town and get another good job.

    The company could be saved, but not by these clowns.  They are at once desperate and incompetent.  A strategy is required which recognizes the predominance of iOS and Android, which abandons making tablets, which segments the market and focuses narrowly on the company’s unique strengths.  BBM can still be viable, especially in the developing world.

    I would not buy RIMM without new mgt.  But I would not short it here either.  Too much risk in either direction for me.


    Edit: Fixed typo.

    [ Edited: 04 August 2011 09:34 PM by capablanca ]      
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    Posted: 04 August 2011 04:31 AM #15

    RIM is in a bad situation.  Not losing money yet, but losing relevance with each passing minute.  In a way RIM’s banking on the less tech-savvy, change-averse (well kinda…they have to hop to the new BlackBerry OS) types with a holdover device before abandoning everyone with the QNX-based smartphones.  Dual-core will really matter very soon and yet RIM is doomed to be later to market than even Apple, with a necessarily less tried and tested OS than even HP’s.  A tough place to be, in a super-tough market.

    I can’t buy puts on RIMM, yet, because the stock price is so low.  At 28-30, or with some more irrational waves of optimism kinda like friggin’ EK (Kodak) today?  I’ll give it a closer look.

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