RIM to Be Back In Black…Berry

on Sep 26, 2012

Research in Motion (RIM)(NASDAQ:RIMM), the maker of BlackBerry phones, finally came out with some good news reporting a second quarter increase of two million in its global user base which now stands at 80 million worldwide. The announcement was made¬¬ by Thorsten Heins, RIM’s chief executive, at a keynote address to developers in Silicon Valley. According to Mr Heins, sales of the BlackBerry handsets have been particularly strong in Southeast Asia and in some countries even outpaced sales of the smartphone industry juggernaut, Apple (NASDAQ:AAPL).

The Canadian company is now making a serious attempt at reinventing itself and is preparing a launch of a range of handsets running on a new operating system – BlackBerry 10. To gather some public attention, RIM decided to let developers at a conference gathering in San Jose preview some of the new features of its upcoming smartphones. Heins stated that mobile carriers who have been given a chance to test the new handsets have provided overwhelmingly positive feedback. “We are making believers out of our partners. We are making believers out of those who had previously written BlackBerry off,” the CEO said.

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!m[](/uploads/story/469/thumbs/pic1_inline.png)After postponing the launch of BlackBerry 10 a number of times this year, RIM has finally promised an early 2013 release. The BlackBerry 10 platform is supposed to be faster, smoother and better suited to applications, which is crucial to the success of today’s smartphones. Executives at the company presented new features such as “flow” and “peak”, which enable the user to access different properties on the phone without leaving the current application. Developer Neeraj Chawla said he found the new BlackBerry features impressive and full of potential. Mobile analyst John Jackson from CCS Insight was also at the sneak peak event and said that RIM has managed to gain some traction with developers, which is vital if it wants to create a sizeable pool of applications for its new handsets.

“The question now is whether the devices will be sufficiently competitive and that is in no small way a function of RIM’s ability to spend massive marketing dollars to cut through the competitive noise,” said Mr Jackson as quoted by Bloomberg.
RIM has seen its share prices fall by more than 93 percent from their June 2008 peak of $131. The company failed to launch competitive handsets to Apple’s series of iPhones or the multiple Android-based devices. RIM’s managers were too confident in their dominance over enterprise customers but underestimated the appeal of the new generation smartphones. Employees began to prefer bringing their own new shiny smartphones to work instead of the BlackBerries their companies bought for them. At some point many of the chief information officers (CIOs) realised it’s more cost effective to simply allow employees to use their iPhones and Android phones at work instead of buying them BlackBerries. RIM’s products were left behind in the fast-paced race of smartphone technology.

Trip Chowdhry, analyst at Global Equities Research, forecasts that by the end of 2012 Apple and Google (NASDAQ:GOOG) will control 98 percent of the mobile market. The remaining 2 percent is left for Nokia, Microsoft and RIM to fight over. Dan Maycock of Slalom Consulting admits that the two leaders in the platform wars are indeed iOS and Android but disagrees on the 2 percent estimation “I think that the 98 percent prediction is pretty aggressive. Certainly, it’s going to come down to people and their loyalties,” If it comes down to loyalties, BlackBerry’s fan base used to be almost as fanatically devoted as Apple’s.

The important piece of information for investors is that RIM has not given up. The latest release of a promotion video depicting the developer-relations executives of the company performing a spoof of REO Speedwagon’s ballad “Keep on Loving You” kind of proves that the Canadians will spare no expense (or shame) to earn back its beloved developers, customers and profits.


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