Research In Motion: Dead Company Walking


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Research In Motion: Dead Company Walking

  1. 1. Research In Motion is in dire straits, and it only has itself to blame. Once the king ofthe smartphone hill, it is now mired in financial woes that don’t seem to be endinganytime soon. Day after day, more and more people are selling used BlackBerrysand making the switch to the competition’s smartphones, all because RIM restedon its laurels when it should have continued to innovate despite the companyalready being at the top.Apple’s entry into the smartphone fray half a decade ago effectively ended RIM’spreviously unchallenged run, and Apple hasn’t looked back since. Things seemedto be turning around for RIM at May’s BlackBerry World 2012 convention, though,with the unveiling of their BlackBerry 10 mobile operating system. RIM CEO, ThorstenHeins, has gone on record time and again claiming that the company had pulledout all the stops to make sure that the BB 10 would be the product to save them;and the OS definitely showed that possibility at the event, wowing the crowd withits myriad features that seemed to put it, and RIM, back in the game.Unfortunately for RIM, Apple presented the iOS 6 not a month later at the WorldWide Developers Convention 2012. While RIM’s OS showed that the companycould still play ball, Apple’s changed the game altogether. The company’spenchant for innovation went the extra mile this time, expanding its portable
  2. 2. gadgets’ functionalities beyond their physical limitations (Siri, anyone?), andthereby giving consumers one more reason to trade in BlackBerrys for iPhones.As a result, Research In Motion is now backed into a corner and forced to considerlast resort split-and-merger options just to try and keep itself afloat. While plans forthe merger were already on the backburner last May when RIM hired bankers JPMorgan and RBC to help them come up with financial strategy alternatives, it wasonly after Apple’s show stopping WWDC that RIM’s plans became an imperative.The two frontrunners for the merger deal are Amazon and Facebook. While bothcompanies could stand to gain something from the deal, each also has its ownimpediment which could delay (or outright cancel) the merger.Amazon started as an online bookstore, but soon diversified, selling laptops,electronics, DVDs, CDs, MP3 downloads, software, video games, apparel, furniture,food, toys, and jewelry and now it is looking to acquire RIM’s handset division todevelop a smartphone that would follow up on the Kindle Fire tablet. Interestinglythough, the company isn’t prioritizing selling their BlackBerry handsets (or whateverit is Amazon wants to call them) at a markup. Instead, the company is interested in
  3. 3. using BlackBerry as a channel for their mobile commerce venture, having alreadyaccrued detailed online customer contacts and tendency analytics to make suchan endeavor viable. Nevertheless, Amazon already has such a system set up withAndroid, and setting up another one on a vastly different OS (the BB 10 is based onthe QNX platform) could just be a hassle for the company.On the other hand, Facebook is actually planning on a business expansion bybreaking into the smartphone market, and acquiring BlackBerry could instantlymake the company a force to be reckonedwith. However, the company is alsocurrently facing (no pun intended) its own financial problems; and although they’renowhere as dire as RIM’s, they could still make the merger deal a second priority forFacebook.Whatever happens, it’s clear that Research In Motionneeds to make a movesooner than later. Industry pundits are speculating that the company could meet itsdemise by 2013, and RIM needs to do everything it can to see that this does nothappen. Source: