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Research In Motion (RIMM) might hawk its BlackBerry business to Amazon (AMZN) or Facebook (FB);...
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Sunday, June 24, 2012, 4:51 PM ETResearch In Motion (RIMM) might hawk its BlackBerry business to Amazon (AMZN) or Facebook (FB); sell or open up its messaging systems to Apple (AAPL) or Google (GOOG); or keep the company whole and sell a large stake to Microsoft (MSFT), Sunday Times says ($$). For now, keep an eye on Q1 earnings this week.
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This news story has 128 comments:
If you think a loss of RIMM will boost AAPL, then you are a fool.
Also, when you type symbols for stocks, you put them in parentheses in order to create a link, like Nokia (NOK) and not the link to a web address. I get a good laugh every time you comment.
RIMM have enough cash to burn for four years before they reach the level of NOK. Even after that, they can borrow, since RIMM have zero debt at the moment.
Definitely expect RIMM to report negative or very low earnings for this quarter, but they warned that would happen. No one should be surprised by their earnings report this week, unless the earnings are positive.
Wow. Where do people coming up with this stuff.
I still don't understand why MSFT hasn't bought RIMM. This would be a great strategic foothold into mobile which MSFT desperately needs, but once again they are showing they have no vision, and no clue how to invest the pile of money that has been going to waste these last 10 years.
She has also written a pretty good book "Use the News". You might read it before trashing her, and you might think twice about minimizing her impact on IT decisions. She has interviewed hundreds of credible, powerful, and influential people world-wide. You'll do far better listening to her than if you run counter to her.
I saw that same moment, and felt the same sense of doom for Research in Motion--for whom the bell has tolled ever since! I sold my stock the next day, and have not regretted that decision.
Certain journalists stand out and are worth paying attention to--Maria Bartiromo is a passionate and dedicated journalist. Your out of hand dismissal of CNBC"s content and personages does not square with my experience. They make enormous efforts to bring unbiased programming to viewers around the world. I used to be cynical, but after 12 years of nearly all day viewing, I have reached a very different conclusion, and have great respect for them. The folks that they interview--the entire spectrum of the investment and governmental/political communities--may very well be "talking their book", rather nakedly....but that's good information if you understand its context and know how to "surf" it!
As a long-term, slow-moving investor, I have benefited tremendously by paying attention to CNBC...Maria Bartiromo, and many others.
Regardless, it was only a symptom of the problems at RIM, not the cause. In the final analysis, the problem lies with RIM, not publicity or sentiment.
People are just making stuff up now.
I signed up fro BBM Music and can understand the astonishing growth rate of the BBM experience over the wannabes (whatsApp, imessage, gtalk, etc.). I was able to grow the 'friend' network on that platform to 200 'friends' in about a week, and gain access to 5000 songs from all over the world. The biz model is better than that of facebook. Friends are "worth" 0 in dollar terms but on BBM Music it is worth a monthly fee that goes to (RIMM).
Thus far BB has had lousy form factors and the ecosystem for apps is terrible. They are too far from Silicon Valley and too far from reality.
I really could not add up the long play as much as I tried so I feel great about not going long. My instincts were screaming at me that it was more hope than reality. We also have the Palm case study to lean on so this can happen.
Think I might go short instead as this is the fountain of bad news. This is the anti Ponce de Leon fountain of life. And they still don't have a strategy which means it is really bad.
Was I right on the layoffs needed? I think they really need to go to 7K or 8K in layoffs but they might get there anyways as people leave before they are fired. So the unspoken target may be 8K with 5K coming directly.
As we used to say years ago about dead competitors, they will be sold for "notes and other valuable consideration," either whole or in parts.
I actually wonder why Sony, and several other smaller players in mobile devices, bother to make smartphones at all. Android has not saved Sony, nor numerous other companies.
What do you base that on? Is there some device you've seen that some of us haven't?
Reading your several posts that you put up all at once, you seem upset. You own stock?
...I thought you seek the truth, red? The truth is, none of us know all that much, except that Heins is having difficulty getting this done according to schedule...
They better learn from Kodak and get $s for the patents and nor risk a Chapter #
As they say in Hawaii " dead horse" Let it fade into Finnish history !
They also say "they're all buss" (they suck, gone bust), and it's "Pau hana" (they're done!)...that about sums it up!
You folks hanging on to BB are reminders of those who hung on and defended all the other businesses that went bust because their products and innovation became stale.
RIMM has been left in the dust years ago....
The wonders of the OS is not nearly as relevant as ACTUALLY getting it out...
RIM is really in dire straights now...even the faithful were undoubtedly disappointed with the delay. What is behind your enthusiasm in the face of all of these bad numbers and the delay. Canadian pride, perhaps...
Some good news for RIM, my daughter wants her blackberry upgrade now so she's getting a Bold 9900 off to Future Shop.
Let me guess, educated in the US?
RIM is toast. Its final collapse will surprise only those that were unwilling or unable to read the signs.
You anti RIM posters are something else, so US focus, RIM is a global company which generates most of its revenue outside the US.
Stop drinking the made in USA kool-aid.
I believe the new OS will be successful, to categorically dismiss it is just ignorance.
As for your last comment well..........my mom always said if you have nothing good to say then don't say anything at all and I choose not to say anything
I don't know one child in my daughters' school that has or wants a Blackberry.... and only one or two who want an Android phone. They all want or have iPhones. Their parents have learned from the kids that iPhones are superior and easier and quicker to use. There is little content or apps for Android.
Corporations have been moving to Apple for years -- iPhones, iPads and even computers. I see it everywhere. iPads are being used in cockpits on major airlines, in the operating room, in the board room. People even use their iPhones apps for work. Open up your eyes folks and look around....
There's a reason Apple has become the largest corporation in the world; and a very big reason why RIMM has fallen to near single digits. RIMM is nearly dead.
RIMM is slashing and slashing ,but, their new OS system is not needed. AAPL will tie it's stuff together and MSFT is trying to jump over them by having all their stuff tied together . Even the games.
RIMM will be taken under or slowly die. I say stike first and use the patents now while there still a strong currency. DL
This is no longer about engineering and tech specs. The market has decided and RIM is not the choice and cannot catch up.
RIM has already been downsized on the revenue side. Management has not grasped the trajectory of this downsizing to get expense aligned against it. Classic stage of grief which is denial.
The BIG issue for RIM and a lot of nerds is that the device is not valuable by itself. What makes it valuable is the content that flows through it. Apple has won that battle and Android is in 2nd place. RIM still does not get it which is why they are going down.
Agreed that their infrastructure is the only thing that makes RIMM unique in smartphones. That alone is one fourth of their revenues.
Why do Sony make Android smartphones? Why does any smartphone company besides Samsung and Apple make smartphones at all? No company will topple either Samsung nor Apple, so why even try? Perhaps every other smartphone vendor, including RIMM, should simply shut down their hardware manufacture and leave smartphones to just Samsung and Apple?
I think they need to cut expenses to match their revenue trajectory which would be less than 10,000 employees.
Hardware vendors in general go out of business eventually and especially single play hardware vendors. Sony has assets they can leverage and can also walk away if it does not work. BB's golden era is over and now it is a matter of how long the echo lasts. At the same time overall mobile phone sales growth is dropping so it is even tougher to make a comeback.
I think you can play the echo for an investment thesis but you can't play anything long term because there is no strategy that they seem to understand or expound that would keep them around.
RIM cannot answer why do we care?
When every single smartphone will become a slab with a touchscreen, then what sells one device over another? This is like the laptop market, with every device having a keyboard and monitor. Price might be one consideration, but these are not completely generic devices. That leaves the brand and the reputation of that brand. Obviously Samsung and Apple have figured that out, but look at where Motorola and Nokia are now; both were at the top of mobile devices not long ago.
Success for RIMM will come down to their marketing effort on BlackBerry. They cannot rely upon what they did in the past, letting the carriers promote the devices. Smartphones are now bottled water and toothbrushes, and do not sell themselves. The appearance, materials, finish, and design mean more than anything to consumers, and the only way to promote one device over another is through promoting the brand. We saw the bad example of that with Palm, who had a confusing and weird ad campaign, which I felt led to their decline.
Consider this from the other direction. When Apple went from OS 9 to Mac OS X, and from Power PC to Intel, these were huge changes. They took a gamble, but they knew at the time they needed to change. RIMM has to change now. Obviously it's a huge risk, but that risk is for any company. Same with Nokia, shifting away from Symbian to Windows Phone. We can ask the same of "why do we care?" of any company, including Apple and Samsung.
If the past of mobile phones has taught us anything, it is that brand only takes you so far. This is where Motorola and Nokia stumbled. We may see the same happen to BlackBerry. I don't think any of us has that crystal ball to project exactly what happens, but we know Nokia is far worse off financially than RIMM. If RIMM indeed will fail, then NOK will crash and burn first.
I don't think you disagree with me on sales. I said overall mobile phone sales are dropping which I just seen in an article but I do believe smart phone sales are trending upwards yet which is your point. However this leaves a smaller space within which to compete.
I am very skeptical this has anything to do with marketing. Google drove Android phone sales based on more functionality for less money. They did not do a lot of marketing. They also sold a platform for development versus the RIM "we are the geniuses that can do it all" approach. That brought even more functionality to the platform.
RIM cannot answer why anyone would buy any device from them over an Apple or an Android. And they especially cannot answer how they will take market share from Apple or from Android.
In this space only Apple has any brand equity that is material. Everyone else is a yawner. RIM's brand has been damaged which is even worse and that takes years to turn around and massive dollars which is questionable that they have or are willing to spend. Strong brands spend many 100's of millions in advertising not just $50 million or some trivial number like that. And RIM has to do it across multiple countries so it is diluted.
My sense is that this space is going to be Apple and 1 to 2 other players. Google will take one of those slots because they can. RIM or Nokia have a shot at taking a 3rd slot but they have to be extraordinary going forward. If past is prologue they wont.
Enterprise will be gone in the next few years as CEO's and their executive teams are already carrying iPads and iPhones and next it will be employees.
Question still stands. Why does anyone care about RIM's devices? Answer to date is that they don't.
I think smartphone sales hit a lull for a few reasons. One is that sales were very strong 4Q 2011. Next is that carrier pricing and plan changes in U.S. markets are causing some people to hold off purchases. Third is a slowdown in developed economies, which causes people to wait unless they absolutely need a smartphone.
Even Apple guided that this quarter sales would not be as good as the previous. They made up some developed markets lower volume through higher volumes in China.
At the moment all smartphone vendors are in this position. Component makers are all reporting lower orders for parts, which tells us smartphone vendors are expecting lower volume sales.
I think the change will be at the end of this year, in 4Q 2012. My expectation is that new smartphone models will spur a buying cycle, though that may taper off into 2013. I don't think the smartphone market is done growing.
The key to lesser companies is how to succeed at lower volumes. If BBM is one measure of BlackBerry users, then 55 million of 78 million total users now use BBM. Suppose even that level is optimistic, and they drop back to 45 million users, which was their user base in 2010. Then RIMM need to streamline the company back to pre-2010 levels. In the grander scheme of how many smartphones will be in use in the world, 45 million, or even 78 million, will not be significant. However, considering that there are fewer than 45 million active Mac OS X users, and software companies still develop new applications for that platform, I indeed think that RIMM can continue to survive. That's a long way from being a growth companies that investors want, so in a way that would still be a failure for RIMM. If they cannot grow, but they can generate profits, then they would need to start issuing a dividend.
twitpic.com/a0qlzy
No company in the mobile space has ever survived such a downturn. The real question for 2012 is who disappears as an independent company first, RIM or Nokia?
Samsung is riding Android so I count them in that camp versus Apple and RIM. Samsung's success only makes it harder for RIM and they can be a serious competitor as they are a conglomerate with many different cash flows into the corporate parent.
If a market slows in growth it puts stress on all the players but especially the weak. This should lead to consolidation or players going out of business. I don't think there is room for too many players and given how open Android is I think it puts even more pressure on the number of players. Think of Android as an OS and then look at how many OS's really exist in the technology world.
I agree BB could survive if they go back to an employee level around 2008 to 2010 numbers because that is really where they are now. However it is almost impossible for a public company to state that fact however as it is sign of failure and their investors don't want them to say it. They would rather they sell out which is why they retained JPM. Or tie their future to some miracle release or product. But maximizing value will likely be tied to a sale as the slide downward is going to continue. Buyers are probably sitting back and trying to calcuate how deep that slide will go before jumping in. And Nokia is also available potentially so why buy RIM first?
This is bloody.
I've been exploring the consolidation issue for a while. The idea is that like the computer desktop market, everything will gravitate to two platforms. However, as Steve Jobs said years ago, before Google existed, the desktop war is over and Microsoft won. He also stated that no one can control the distribution chain, though that was before iTunes. What we see now is attempts to control distribution through apps, but even there the developers are starting to feel pressure. The thing that cannot be controlled, which Google understand so well, is the internet. Eventually that will be more important than apps on mobile devices, except for gaming.
Quite likely we may see some buyouts. RIMM may more to being a services company, offering their device management software, which is now a fourth of revenues. What does NOK have besides a brand name and patents?
I asked the question at the device level because I wanted to know why would anyone buy a RIM device versus another device. I was looking for a compelling story that would play out over and over when people are making a decision. So far it is crickets which is disturbing and likely why RIM management is looking to sell. There is no answer to that question.
Hopefully they can sell so that the value that is in the company can be salvaged and put under a better business model. As a stand alone business it looks incredibly bleak.
Basically, I think that is it, just for e-mail. Granted not everyone needs timely e-mail, and many people are fine checking e-mail once a day. When you consider RIMM changing their enterprise software to manage iOS and Android smartphones, then that is not longer a big draw for BlackBerry hardware. Anyway, this is business related, and the big purchases are now in the consumer space and not in business. Business smartphones are a niche market, and quite mature at that, with maybe 1% growth potential annually. Compare that to projected 18% annual growth in smartphones. The consumer segment is where profits are to be found.
RIM no longer owns the enterprise market.
http://bit.ly/MSIM11
45% of traveling businesspeople use iphones, 31% use RIM, 21% use android. RIM is on its way out in enterprise as well.
What really made a mess of the mobile device market is Apple and Google positioning their device as a platform for applications and thereby exploding the functionality outwards so that a vertically integrated play like RIM or Nokia could not keep up. The hardware part of the mobile market was devalued tremendously. This change in the market is flowing through RIM and Nokias' financials now.
I would say Google pushed Apple very hard in this direction but Apple was smart and knew they needed to get out of the way and they also recognized it was better to take a cut of the action than try to be all things to all people in low margin applications. They also remembered their Windows experience, knew that protecting margins in mobile was tough so one needed to be way ahead of the competition to preserve margins and they had the consumer experience mindset to step outside of themselves and think about what the consumer wants.
So I don't think it is controlling distribution through apps but rather offering solutions and an ecosystem that they can control that is superior to the old model of a device and a tech spec sheet. And yes if you look at apps as content why shouldn't it just be another iTunes products?
The next battle is who wins the ecosystem war? Apple or Google or both? Or is there a 3rd player? And how can the other traditional players survive in that new world when their playbook is not robust? Can they merge with someone like Google or become a smarter player and pick out niches or a combination of both?
Google is a wild card because they don't believe in the mobile phone market per se they just want to advertise into it so they want an open environment with lots of apps and players.
NOK might offer Google entree into countries they have a small footprint or some other rationale we don't see yet. Same with RIM. MS knows this so they are likely stressed wondering how this will play out. If they buy NOK then Goog could buy RIM and expand RIM's product portfolio dramatically and kick them in the teeth. If they don't buy NOK then Goog might and scrap all MS's efforts.
I don't see Apple buying anyone. And I don't believe Jobs when he said the desktop war was over. He was just saying it was over in a direct confrontation approach as it was mature but he has been working on a flanking maneuver ever since.
http://seekingalpha.co...
This article didn't get too many readers, but I go over app development and content in it, though the focus is on ADBE. Anyway, there is a chart in that with an interesting app statistical pattern, so I'll link that article below (second chart).
http://bit.ly/QdR0S6
That is the percentage of top apps that are on each platform, and to which degree. The top apps will be multiple platform. Changes in development tools will make that even easier. Adobe Software is only at the beginning of addressing mobile content development. As content development shifts from programmers to creative professionals, as it did with the internet and HTML, we should see even more of this. The Financial Times is one of the first companies to successfully forgo the Apple App Store and create a web app with a subscriber base.
The ecosystem will be important next year. Beyond that the mobile internet will gain more ground, especially as HTML5 tools become more accessible to content creators. There is already evidence of a slowdown in app sales, app searches, and app importance, though I want to save that research for another article. We have typed enough here to be co-authors. ;-)
I agree the app developers will try to build once and deploy everywhere but they will spend most of their time on the top 2 to 3 platforms as they don't need the support headaches of 4 or more platforms. Hence room for a lot of players is not available.
Keep in mind that FT has a strong brand and following and are a niche content provider and those will continue to exist.
I shorted FaceBook, Zynga, RIM, and Nokia... only Zynga came out with a loss.
We're going to need slow motion capture to observe RIM's smartphone race...
On your restructuring point, so true but RIM is doing more than that they are creating a brand new product that will be so superior to any BlackBerry ever. Will that be enough? We'll find out later in the year.
But, Bedrock, your partner in crime will not change his tune, even if BB10 bombs big time. Absolutely nothing has changed in his tune since RIMM was quadruple what it is now. If BB10 flops, there will only remain the dynamic duo, you two, faithfully defending RIM...
You should do some research on the work RIM is doing to have a ecosystem at launch. I don't know if they will be successful but the effort and strategy is impressive.
Thanks for the laughs guys!! :)
If you are an American male and don't like the Three Stooges then you are NOT a man!!!
Great idea for a commercial...sounds like something I would suggest...call RIM and submit a proposal...
She blew her credibility with that escapade
She blew off the other Citi execs...
What else did she blow off???
Wonder why Thompson got a divorce shortly afterwards???
It does make me wonder how Trisch Regan ended up suddenly at the 3pm hour on Bloomberg. I assume a lot of people tune in during that hour on Bloomberg TV. Sometimes if I watch her (I usually turn her off also) Bloomberg TV starts to sound like CNBC. Full of hype.... Wonder why they hired her....