Will RIM Make It To 2013? - InformationWeek

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Commentary
12/6/2011
12:04 AM
Ed Hansberry
Ed Hansberry
Commentary
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Will RIM Make It To 2013?

There is little doubt BlackBerry devices will be in use, but the company is ripe for a buyout.

RIM has had some difficult times in the last two or three years, especially compared to the decade before that. The company's stock price has been steadily declining since mid-2009. If the stock price continues on this path, and there is little reason to think it won't, the company will be an attractive buyout target for any company that wants to get a jumpstart in the mobile phone market.

Before the global financial meltdown, RIM's stock was approaching $150 a share. Like everything else back then it took a dive, but had recovered to the $90 range by mid-2009. It hasn't been anywhere near that price since then. Monday it closed at $17.30, a price the company hasn't been at since early 2004 when it was a fast growing Wall Street darling.

RIM doesn't have a good track record of late from an operational or execution standpoint. It invented push email through its proprietary system of servers. While it is great when it works, when it fails, it often makes headlines because the failure is widespread and catastrophic. Its October crash resulted in email, Web access, and more being offline for as much as three days for some countries.

RIM tried to get into the touchscreen market with the Blackberry Storm in 2008, just over a year after the iPhone showed the world what a real touchscreen device should be like. Three years later, it hasn't gotten it right, due mostly to the aging BlackBerry platform itself. RIM is going to switch to a QNX-based phone, the same platform that powers the PlayBook, a device that just caused RIM a $485 million charge to its financial statement.

These and other issues have led to increased shareholder dissatisfaction with the company and particularly with its co-CEOs. The stock price is putting the value of the company within reach of a number of its competitors. A lot of shareholders would be glad to see an acquisition come along, shake things up and put the company back on track.

Do you think RIM will still be here this time next year, or will it be in the process of being swallowed up by either a competitor or a company that wants a quick entry into the smartphone market?

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