Rating: It just needs some fresh executives
Four years ago if you wanted to buy some Research in Motion(RIM) shares it would have cost you around $148. Today [June 11th 2012] if you were brave enough to invest in the company the stock would set you back a mere $7.44. Behind the spectacular collapse is, of course, Apple’s success in toppling RIM’s once iconic BlackBerry from its slot as the most sought after smartphone.And RIM shareholders aren’t happy bunnies. Something which Barbara Stymiest, the company’s chairwoman, recently acknowledged at the firm’s annual meeting in Ontario when she ceded that that the company’s recent financial performance, has “not met expectations.”
Given that RIM’s share price this year alone has plummeted a further 70 per cent, it was some understatement.
So where does the company go from here, if not oblivion?
In shades of what must seem akin to re-arranging the deck chairs on the Titanic, RIM’s blonde bombshell says she is planning to bolster the board with new members and has already got a firm of head hunters involved in the search.
Whether it will be enough to stop the rot is a moot point.
Last month RIM announced a far higher-than-expected $518m net loss for its first quarter and has delayed launching its next generation BlackBerry 10 operating system and associated devices until next year.
When it does eventually ship the BlackBerry 10 handset will come with a touchscreen, soon to followed by a version with a mini Qwerty keyboard.
As in the past the phones – prized for their security – are expected to appeal to high end consumers and corporate customers, not forgetting the odd drug dealer.
In the meantime RIM’s external manufacturing partners will be slashed from ten production sites to three by the end of the year.
Many industry pundits think it is all too little too late, given that Apple’s iOS and Google’s Android account now account for over 85 per cent of the smartphone market.
If RIM does have any worth at all it’s in its 11,000-plus patents, 78 million subscribers and 56 million BlackBerry Messenger users, all of which could provide any potential buyers (including Apple, Google and Microsoft) with strategic leverage.
All the more so for the latter (Microsoft) which could capture a high quality beachhead into smartphones.
Perhaps that £7.44 share price could be a wise investment after all.