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Dear Jim and Mike,

The last few months must have been hell for you. You launched Playbook in April to lukewarm reviews. You guided poor earnings for Q1, only to slash them even lower part way through. You were sued for allegedly misleading investors. You were sued for alleged patent violations. Every analyst including your best friends in Canada downgraded the stock. All of this culminated in the earnings conference call on Thursday:

BlackBerry smart phone maker Research In Motion (RIMM) said Thursday that its net income and revenue declined in the latest quarter, hurt by lower demand amid the economic slowdown and product delays.

RIM is also cutting an unspecified number of jobs to reduce costs. It gave an outlook well below Wall Street's expectations for the current quarter and the full year.

First of all, now is not the time to be cutting costs. You are sitting on $3 billion of cash, no debt, and still wildly profitable with expected annual cash flow of over $4 billion. What you should be doing instead, while you still have the ability, is to reinvest heavily into R&D, marketing and execution in a Herculean attempt to catch up to the competitions.

I'm a big fan of your devices and company but let's face it, the series of missteps over the last few years were more than enough to get anybody with a regular job fired. Storm - the answer to the original iPhone - was a usability nightmare. Later on, an underpowered Torch was released into a market already full of more powerful iPhones and Android phones. Then you botched the Playbook launch by releasing an unfinished product to consumers that is lacking some crucial features that define a BlackBerry - namely native e-mail and messaging. You walked out of a BBC interview when questioned about the situation in India and Middle East. Finally, you misread the market completely, causing delays in the release of your new lineup of phones, and probably missing the crucial back-to-school season.

In the Q1 earnings conference call, you said this:

We were already well down a development path to the next-generation BlackBerry handsets when we realized that in the U.S. the features and performance arms race demanded that we upgrade the chipset and port BlackBerry to a higher-performance platform. This was an engineering change that affected hardware and software timelines and pushed out entry into carrier certification labs.

What's unforgivable is that you get paid to see these kinds of things coming. As the heads of a leading tech company, we rely on you to be the visionaries, but rather than being one step ahead of the market, you were one step behind, only realizing half-way down a development path that you needed better hardware.

I think it would be very helpful if you guys buy for yourself the latest Android (NASDAQ:GOOG) and Apple (NASDAQ:AAPL) gadgets, and earnestly use them on a day-to-day basis. This way, you will experience on a personal level the shortcomings of BlackBerry handsets compared to the competition, as well as better appreciate the advantages of BlackBerry. You need to give your products the same personal touch that Steve Jobs gives to his, down to the very last power button.

To be honest, I was pleasantly surprised by the Playbook platform. The hardware is rock solid, and the QNX-based OS is the best in class. The UI gestures are very intuitive, multitasking the most seamless I've seen on any mobile device, and the OS still hasn't crashed on me - not even once. I have never used any OS this stable, let alone a mobile OS. Windows, OSX, Linux have nothing on you.

And I understand why you force users to bridge to their existing BlackBerry phones to get their e-mail and calendar. It takes time to build fully secured push-enabled e-mail managed by BES, so while that is being perfected on Playbook, you allow users to piggy-back on the existing time-tested software on BlackBerry phones. Playbook can be thought of as an add-on - a bigger screen for the Blackberry handset. This way, IT departments don't have to test and certify a new device, and corporations have full confidence in its security.

See, I get it.

But general consumers are an impatient bunch, and first impressions matter for the reviewers. The main problem was execution. This is how I would've launched Playbook: (1) Have a limited/exclusive launch for corporations and developers only. We must have a BES license or be a registered developer to buy. (2) Generate hype and desire in consumers without giving them the ability to actually get one. (3) Have a big consumer launch later on when native PIM, Android apps and all the other kinks are worked out. (4) Stop cheapening the device by giving it away at every BlackBerry conference.

I am genuinely excited about the next generation of QNX "supephones" due in 2012. If you can successfully bring the beautiful experience of Playbook into a dual-core phone, and if you can manage to combine the current fragmented ecosystems of BB OS, QNX, Android into one coherent platform, then you will be at least on par with the next generation of handsets that your competitors are coming out with next year.

But this will only let you catch up to the state-of-the-art. Meanwhile, your competitors are busy working on the next big thing. What is your answer to Apple's iCloud? I hope you at least have a coherent consumer cloud strategy on the drawing board. What is your answer to Microsoft (NASDAQ:MSFT) Windows 8 - an OS and ecosystem that will combine phones, tablets, laptops and desktop PCs into a unified experience?

I am sure there are other directions you can take this. It is your job to come up with things that mere mortals like us haven't thought of yet. As leaders of a company at the forefront of this cutting edge industry, we are looking to you to come up with the next big thing that will wow us and inspire us.

Some serious soul-searching is in order. While I agree with you that changing the co-CEO management structure at this moment is too disruptive, it does not mean you should continue to meddle along in your current path. You broke this company, and whether we like it or not, you are the only ones who can fix it.

You still have very loyal fans, and they are waiting for you to make them feel excited again. Now get to work.

Source: A Shareholder's Open Letter to Research In Motion