in , , , , ,

RIM isn’t restructuring. It’s dying.

Let Them Die

There was an exchange between James T. Kirk and Spock regarding a proposed bailout of the beleaguered Klingon Empire.

  • Kirk: Don’t believe them. Don’t trust them.
  • Spock: They are dying.
  • Kirk: Let them die.

Today, the Klingons in question do not have boney ridges on their foreheads. They have no cloaking devices or batleths in their arsenal. The only real similarity between Research In Motion (RIM) and the Klingon Empire is the thought that, “perhaps today is a good day to die.”

https://www.youtube.com/watch?v=AFxGPI1Uvlg

For the 5th consecutive quarter, RIM missed their earnings estimate. This prompted chopping at the top with former co-CEO Jim Balsillie leading a star-studded cast of casualties with his resignation from the board of directors. CTO David Yach and COO Jim Rowan were among the lost.

A time will come when the company will need to unwind completely and sell its assets while it still has them. Despite shipping 11 million BlackBerries and a half-million PlayBooks last quarter, they still lost $125 million, their first loss since 2005. The tone of the earnings call made it clear they’re looking for a bailout.

“The next few quarters will continue to be challenging for our business,” said CEO Thorsten Heins.

They confirmed that they will look into licensing the both their platform and services, but it’s possible that nobody will be interested. This time last year the company was banking on the potential of launching the BlackBerry 10 by now, but late 2012 appears to be the most optimistic expectation.

By then, it may be too late.

There was good news. Cashflow was up around $200 million giving them just over $2 billion in the bank. Their new CEO seems aggressive and willing to make the tough decisions. The biggest problem they face is that they’re already yesterday’s technology in they eyes of many of their core customers: corporate America and corporate world.

The iPhone and to some extent Android have made a huge dent in RIM’s potential by scooping up users in the business sector that BlackBerry once owned. They needed BlackBerry 10 to come out before more people ran for the hills and that didn’t happen. When (if) it does come out in a few months, it will need to be able to let users walk on water if they plan on taking that part of the mobile world back under their wing.

Chances of it being enough are next to nil. That isn’t stopping a sense of hope in the concept that BB10 will be a platform instead of just a product.

The company seems poised to pursue two arenas: partnership/sale and enterprise solutions. They face major competition on the enterprise with Microsoft and Google making plays with a larger spectrum of connected services available. The only real solution, it would seem, would be to allow the company to be bought. Even licensing at this point is unrealistic as the only real asset they have that anyone would want is marketshare.

They’re shipping 80% fewer BlackBerries than they were a year ago.

Heins will try for the next several months to right a ship that went terribly wrong the last two years. They spread themselves out too thin and didn’t deliver the technology that their users craved. They will try to refocus, but in the end they will need to sell. That is where the real future of the company lies and it’s time to reposition the company as a nice catch for a bigger fish rather than a drowning competitor.

Otherwise, Kirk and Spock might as well have been talking about RIM.

What do you think?

Avatar of Lorie Wimble

Written by Lorie Wimble

Lorie is the "Liberal Voice" of Conservative Haven, a political blog, and has 2 astounding children. Find her on Twitter.

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

15 Comments

  1. The only thing Blackberry’s have over Android or iPhone is security. This is enticing for business but the first secure Android will bulldoze them. The question is simply “when?”

Tech needs more women

38 years ago Arthur C. Clarke nailed his prediction about the 21st century