RIM's U.S. Market Losses Lead To Stock Collapse

Research In Motion's stock price hit a seven-year low at the same time the BlackBerry maker's share of the U.S. market reached a new bottom.

Research In Motion has had a bad year, and it shows no signs of being able to turn things around. On Wednesday, its share price on the NASDAQ sank 2.7% to a six-year-low of $18.77. In the Canadian index, RIM's share price had been as low as C$18.77 earlier in the day, its lowest point in seven years, before recovering a bit to $19.03 per share as trading closed in on the end of the day.

Why the dip? Canalys' smartphone market share report from earlier this week highlighted RIM's weak position in the U.S. market, where it has been passed by rivals.


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Canalys reported on Monday that RIM's global volumes dropped 58% from the year-ago period. Its U.S. market share slipped from 24% in the year-ago quarter to a depressing 9% in the third quarter this year. RIM fell behind HTC, Samsung, and Apple, all of which posted better numbers for the third quarter.

"There's no disputing that RIM are in a really difficult place at the moment," said Pete Cunningham, an analyst at Canalys, in the company's report.

RIM held off launching new smartphones during the first half of 2011 so that it could focus on launching its PlayBook tablet. The PlayBook, which went on sale in late April, has not yet sold a million units and is generally viewed as a failure compared to competing tablets.

In addition to the poor sales, RIM also recently announced that it is putting off a major operating system update for the PlayBook, which had originally been planned for a fall release. Now, the significant upgrade--which is to include email, contacts, and calendar apps--has been delayed until February 2012.

Late in August, RIM announced a slew of new BlackBerry 7 smartphones. Despite revised system software and new hardware capabilities the devices are not selling as well as devices from rival makers such as HTC, Samsung, and Apple.

"RIM has a couple of difficult quarters ahead of it," Cunningham continued. "But if it can get to QNX and execute on that and deliver a handset maybe toward Q1, certainly the beginning of Q2, it gives itself an opportunity of being able to compete again."

Those are some big "ifs".

RIM announced at its Devcon event in October that it is merging the tablet-specific QNX platform with its BlackBerry smartphone platform in order to create one master platform that will work on both device types, called BBX. RIM was short on providing details about BBX, like when it might launch, what features it will have, and so on.

Without a clear picture of where RIM's business is really heading, paired with the product delays, product misfires, and other problems RIM has seen all year, it is no wonder that RIM's investors are questioning the company's mettle.

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