Hard times for RIM; Major investor pulling out

Yesterday was Research In Motion's first quarter earnings call. Co-CEOs Jim Balsillie and Mike Lazaridis didn't have a pretty picture to paint. This Is My Next reports that RIM is claiming 500,000 Playbooks shipped in the product's introductory quarter. Then the news takes a harsh turn, profits are down 10 percent since last year. In addition, RIM's overall earnings outlook for the year was cut from $7.50 to $5.25-$6 per share. The takeaway from all this is that the former smartphone king can't keep up with what consumers want, and it's beginning to show.

But the news gets worse. Bloomberg reported today that Jarislowsky Fraser Ltd., RIM's sixth-largest investor, has sold off over half of its shares of Research in Motion. The chairman, Stephen Jarislowky, is quoted as saying "They are resting on their laurels, Steve Jobs is a much better marketer than RIM," of course referring to Apple's CEO and it's continued success in stealing marketshare from the former mobile giant. At the time of this posting, Google is showing that shares of Research in Motion are down by 22 percent. It's apparent that confidence in RIM's ability to stay relevant to consumers and enterprise is waning.

To compound these problems, this year's Blackberry 7 devices have faced delays. Originally expected this summer, it's being rumored that Blackberry 7 devices such as the company's flagship Bold 9900 are being delayed until September, and QNX based smartphones are nowhere in sight. This is not good news for a company whose newest and unreleased operating system is already being considered dated by many in the industry. Addressing these issues during the earnings call, Mike Lazaridis said that concentrating fully on QNX based phones would have left them with a "product void for most of 2012." Certainly not a good thing given that RIM's two biggest competitors, Apple's iPhone and Google's Android operating system, have annual and semi-annual product releases.

Without being sensationalist, it seems that RIM needs nothing less than a miracle if it wants to stay on top. Enterprise, RIM's long-time dominant field, is being eaten away at by iOS, Android, and soon possibly even HP's WebOS devices. In addition, consumers are starting to identify using Blackberry devices as old and archaic, and many consumers are bound to Blackberry devices because of restrictions from their employers. RIM's situation is reminiscent of Palm's "walk in the desert," referring to the dry spell they experienced between the launches of the Palm OS-based Centro and it's new WebOS-based Pre, which eventually led to the acquisition of Palm by Hewlett Packard. While an acquisition of RIM does seem highly unlikely anytime soon, they still have a huge hill to climb that's only getting steeper.

​Image credit: Pocketberry

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47 Comments

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RIM is moving it's focus to being a secure software/cell provider. With it's release of iPhone and Android support from the BES in Q3 I think it's obvious.

Now everyone don't drop your Bolds and Curves and run to the nearest cellphone vendor to buy a new phone based off iOS/Android/WP7. RIM is here to stay, I don't think that it will be devoured by some larger company. They run a lot of phones believe it or not, well here in Canada for the most part. They are the easiest and cheapest smartphones to have on the market, and no one is willing to pay 50+ a month for a smartphone. This is just because of the form factor of that nice qwerty keyboard and now touch screen combo, RIM will not be the next nokia.

Hercules said,
Next thing you're going to hear... RIM to use Windows Phone 7 on all its devices.

What will the world come to?

It'd be a better place since BBOS is a POS.

so weird sure US market its in decline but here in latin and south america there its a blackberry trend going right now... its selling more than nokia phones

eilegz said,
so weird sure US market its in decline but here in latin and south america there its a blackberry trend going right now... its selling more than nokia phones

Which is something that always gets overlooked. RIM's marketshare in the USA is dwindling, but it's been steadily on the rise internationally. The USA market isn't the only market people.

eilegz said,
so weird sure US market its in decline but here in latin and south america there its a blackberry trend going right now... its selling more than nokia phones

Same in the Caribbean, mostly with teenagers and young adults. Plus the phone companies are pushing them hard.

This is what happens when their are two captians leading a ship. Two CEOs for a tech company? Really?

FMH said,
This is what happens when their are two captians leading a ship. Two CEOs for a tech company? Really?

And what in the WORLD does that have to do with anything at all? If one guy covers A and the other covers B, so be it.

excalpius said,

And what in the WORLD does that have to do with anything at all? If one guy covers A and the other covers B, so be it.

They have the same post. Therefore their jobs overlap.

Blackberry is looking like the new Palm....kinda bad when you are a pioneer of this area of the market and someone comes along to compete against you and you can't keep up....oh well empires fall as they say.

They should have stuck with making cheap business phones with a not-so-good resolution screen that does the job of checking e-mail, making calls, organising calendar perfectly.

Dessimat0r said,
They should have stuck with making cheap business phones with a not-so-good resolution screen that does the job of checking e-mail, making calls, organising calendar perfectly.

I'm looking forward to the new all-in-one Bold 9900 and will be buying it.

Well, as far as I'm concerned, I'll be happy to get my hands on the new Bold 9900 once it gets released this summer. I don't see what's archaic in this phone, it does everything I want and more, it's a joy to use, the keyboard is a must, and I find it pretty easy to develop for it.

I have nothing against the other brands but it's probably more a public image thing than anything else.

Patchou said,
Well, as far as I'm concerned, I'll be happy to get my hands on the new Bold 9900 once it gets released this summer. I don't see what's archaic in this phone, it does everything I want and more, it's a joy to use, the keyboard is a must, and I find it pretty easy to develop for it.

I have nothing against the other brands but it's probably more a public image thing than anything else.

Agreed. The stock market in the US is INSANE these days. We are in the heart of a double dip recession and RIM is showing ONLY a 10% drop from the previous year.

Honestly, there are entire corporations and business sectors collapsing right now and RIM is supposed to be dying because of the recession?! BS.

Sure, the v7 units are delayed...but then again, EVERY other vendor has missed their tablet release time frames, for example. I don't see anyone claiming any of these other megacorps are facing elimination.

I think this is a whole lotta whining about nothing right now.

alexalex said,
2 ex giants, RIM & Nokia, are sinking. For the look of it, both have no future.
Yet again another comment made out of the blue. If you haven't heard Nokia while declining are still the WORLD'S largest phone maker and they've now teamed up with Microsoft who aren't doing badly themselves to use WP7 in many Nokia phones. So can you please tell me why Nokia has no future, unless by future you mean 250 years from now?

alexalex said,
2 ex giants, RIM & Nokia, are sinking. For the look of it, both have no future.

Nokia's future is with Microsoft now. Once the Nokia/WP7.5 phones come out we'll see what their future is. They at least have a shot though. I don't see how RIM can possibly survive, maybe Oracle will buy them rofl.

drazgoosh said,
Yet again another comment made out of the blue. If you haven't heard Nokia while declining are still the WORLD'S largest phone maker and they've now teamed up with Microsoft who aren't doing badly themselves to use WP7 in many Nokia phones. So can you please tell me why Nokia has no future, unless by future you mean 250 years from now?

Don't hold your hopes too much, Nokia won't sell more WP7s than Samsung, LG, or HTC, which combined amount to close to nothing.

alexalex said,

Don't hold your hopes too much, Nokia won't sell more WP7s than Samsung, LG, or HTC, which combined amount to close to nothing.

Care to share your crystal ball with us? Otherwise you have no clue what will happen in the future so don't state your opinion like it's fact.

GP007 said,

Care to share your crystal ball with us? Otherwise you have no clue what will happen in the future so don't state your opinion like it's fact.

Contrary to IDC, I don't have a contract with Microsoft that end on June, 30, so I don't have to write a positive report on WP7 for the contract to renew :-). Bank Nomura (and me) saw a gloom future for Nokia, in the crystal ball. This quarter Samsung will pass Nokia for the first place as the biggest smartphone manufacturer. Next quarter Apple will pass Nokia (Apple has already passed Nokia in revenue, last quarter), pushing Nokia to the third place. Next year, HTC will pass Nokia (with the WP7s) pushing them into 4th place.

It is hard to say exactly what the future holds for RIM. Yes, they released their quarterly results and it was nothing short of disappointing. But the market always works on quarterly results.

A company could have an amazing Q1 and Q2 but as soon as they have one bad quarter, say Q3, investors pull out like a teenager without a condom.

I worked for a company which was growing at nearly 30% per year. One year they decided to expand their operation by purchasing a new headquarters building. The building set them back so much that, at the bottom line, they only grew by about 10% that year. When that information was released at their quarterly meeting their stock dropped hard. Even though they were still growing and were still a very competitive company the investors didn't care because the quarterly report showed a drop in revenue.

Stock prices only show one part of the picture of a company.

I like my Blackberry - it's a solid phone. At my company we had a choice between the iPhone or the Bold 9700. Most people took the iPhone. Many of those people are now wishing that they had stuck with the BB because the iPhone has had a bunch of issues for them. They say it's a great toy but doesn't do email and other business functions anywhere near as well.

Fezmid said,
I like my Blackberry - it's a solid phone. At my company we had a choice between the iPhone or the Bold 9700. Most people took the iPhone. Many of those people are now wishing that they had stuck with the BB because the iPhone has had a bunch of issues for them. They say it's a great toy but doesn't do email and other business functions anywhere near as well.

Business functions like? I hear a lot of people say that they're getting a BB for business and I laugh because they don't even use exchange for email. So I don't understand all these "business functions" that people talk of. An iPhone or Android phone will do the job just as well.

Fezmid said,
I like my Blackberry - it's a solid phone. At my company we had a choice between the iPhone or the Bold 9700. Most people took the iPhone. Many of those people are now wishing that they had stuck with the BB because the iPhone has had a bunch of issues for them. They say it's a great toy but doesn't do email and other business functions anywhere near as well.

The iPhone is just a toy, it's not suited for business IMO. I've been steadfastly recommending Android based phones (with no issues), and before that it was WM6.5

Without being sensationalist, it seems that RIM needs nothing less than a miracle if it wants to stay on top. Enterprise, RIM's long-time dominant field, is being eaten away at by iOS, Android, and even HP's WebOS devices.

I would like to see some proof that will back up your claim. The lack of clear sources to the things said on this site as of late is really concerning.

DreadBoat89 said,

I would like to see some proof that will back up your claim. The lack of clear sources to the things said on this site as of late is really concerning.

Thanks for pointing this out. It should have read "and soon possibly even HP's WebOS devices." It's been fixed.

Eric Lehman said,

Thanks for pointing this out. It should have read "and soon possibly even HP's WebOS devices." It's been fixed.

Isn't WP7 the one to replace RIM in Enterprise ?

Eric Lehman said,

Thanks for pointing this out. It should have read "and soon possibly even HP's WebOS devices." It's been fixed.

I see that's you first post!

DreadBoat89 said,
I would like to see some proof that will back up your claim. The lack of clear sources to the things said on this site as of late is really concerning.

Me too. BB is still gaining marketshare in my little corner of the CDN market. Too bad my local wireless providers insist you want and need a blackberry over any other phone.

Going to the 'authorized dealers' yeilds a conversation like that article posted a few days ago about WP7. They try to push iOS or Android devices.

I'm tired of wireless carriers and sales associates thinking that they know more about the ecosystem than the customer.

For the most part they're told to show preference to one vendor over another.
Too bad RIM is losing globally.

They had something once, the Apple stole it and i-ified it

They did a good job gaining the business sector, but being in a recession, it was only a matter of time before it would take a hit.

Beyond business, we are in the "trendy" era, and iOS/Android have built their empire based on that unlike Blackberry.

I've been saying this for 3-4 months now that RIM will be the next Palm. They gave up when they said that the playbook will support Android apps. It was a clear sign that they have shrinking developer support and no one cares enough for BBOS.

once it get's cheap enough someone will gobble it up. too bad. I honestly liked my Blackberry. But it's turned into Android/iOS market. =/

presence06 said,
once it get's cheap enough someone will gobble it up. too bad. I honestly liked my Blackberry. But it's turned into Android/iOS market. =/
I used to really like my BlackBerry(s) over the years, with my last being the BB Storm. I really liked it but after about a year it started to feel dated. I hung in there but after my 2 years was up then it REALLY felt dated! It was SO SLOW compared to the iPhone 3/3g/4 that I had toyed with at various times over those two years of using the Storm. Finally I just got so sick of it being slow and having no decent apps that I had to jump ship and haven't looked back. I'm very happy with my VZW iPhone 4.