RIM Fends Off The Obituary Writers

BlackBerry maker Research in Motion, which reported Tuesday that it may experience an unexpected loss for the first quarter and saw its shares plunge nearly 8% yesterday, is in a “make-or-break blitz to roll out its next smartphone and operating system” analysts and industry observers tell the Wall Street Journal’s Will Connors. That’s after influential tech columnist Shelly Palmer declared it all but embalmed in a column last Friday. 

That said, denial is a potent force, and there seems to be plenty of we-refuse-to-see-it-that-way operating at both the corporate and consumer levels.

"There are a bunch of people [within RIM] that still don't understand how dire the situation is," a person close to the company tells Connors. Officially, says a spokesman, RIM employees ‘understand the vital importance of launching BlackBerry 10 on time at a quality that exceeds the expectations of our users.’”

The difficulty with that, however, is the increasingly high level of competing products. And don’t discount products that don’t even use cellular networks, even if they are not at all ready for the primetime business market. Yet. 

The New York Times’ tech columnist, David Pogue, has a gushing review of Samsung’s new challenge to Apple’s $200 iPod Touch, which uses wi-fi to connect to the Internet and allowing his teenage son virtually free phone usage since wi-fi is becoming ubiquitous.

The Galaxy Player 4.2 “should hold special appeal for a significant customer niche: rebels,” Pogue writes. Included among them is “anyone with a dominant anti-Apple gene,” suggesting that the rebel-rousers have become the Establishment. 

Back to BlackBerry. Palmer’s “BlackBerry Is Truly Over” piece is based on calls he made -– first to Verizon and then to RIM itself –- trying to resolve a problem an employee was having in getting her BlackBerry 9650 to see Gmail and other Google apps critical to the enterprise. Any skilled tech could have solved the problem in 10 seconds, Palmer writes, but he never found that person during a long-and-frustrating journey through RIM’s customer service tree. Bottom line: Palmer’s head of client services now uses an iPhone rather than a BlackBerry.

“With the Samsung Galaxy S III about to break all Android sales records and a new iPhone around the corner -- I’m sorry to inform you that, we did all we could … but RIM’s self-inflicted injuries were too severe,” writes Palmer, an avowed lover of every BlackBerry device he’s ever owned. “Despite all our efforts … well, you know how this ends.”

RIM announced that it might lose money in the quarter even before the reporting period officially ends Saturday, which is an unusual move in itself. 

“While many analysts had said they expected that RIM…might start to lose money this fiscal year, none had predicted it would do so in the first quarter,” blogs the New York Times’ Ian Austen, who points out that National Bank Financial analyst Kris Thompson compares buying shares in the company to “going to the casino. If you’re feeling lucky, this stock might be worth a dice-roll under $10.”

Bloomberg News reported on April 19 that RIM would pick an investment-banking adviser, Bloomberg News’ Hugo Miller reminds us, speculating that it would be JP Morgan. Tuesday it did just that, retaining both Morgan RBC Capital to "review" its strategic options -– “generally corporate jargon for putting a company on the block,” write Julianne Pepitone and David Goldman in CNNMoney. It also looks good.

“Bringing in a blue-chip bank at least gives you the seal of approval that you’re doing the correct due diligence and taking shareholder interest into account here,” Avian Securities analyst Matt Thornton tells Miller. 

It’s most valuable assets may be its secure network – which is particularly attractive to its 20 million business and government users worldwide -- and its patents, according to CBS MoneyWatch. Another asset are those folks who, unlike Shelly Palmer, remain in denial that once customer service unravels, it’s very difficult to get the ball rolling again. After reading his piece, I sent it to a colleague who I knew had debated the relative merits of the iPhone and a BlackBerry recently for his primary use -- sending email.

“I love my BlackBerry Bold and it does not have a touchscreen,” he emailed me back in reply. But, he added, “I am not enthralled with the Playbook (BlackBerry’s Tablet). I’ve spent enough time with it that we should work well together, however that is not the case yet. I will try both on-line tutorial and the tech rep before condemning it.”

Do you, like me, hear Palmer’s conclusion resonating in your head? That would be: “Well, you know how this ends.”,

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1 comment about "RIM Fends Off The Obituary Writers".
  1. Adam Hartung from spark partners , May 31, 2012 at 3:40 p.m.
    Forbes mag covered these issues in depth in April, 2011 and concluded the company was destined for failure - long before Mr. Palmer finally saw the light http://onforb.es/LCS8dU