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  (Source: Jason Mick/DailyTech LLC)
BlackBerry 10 is perhaps RIM's last hope

It's always unfortunate when a competitor operates under a "win or go home" ultimatum, but that's precisely the scenario Waterloo, Ontario-based phonemaker Research in Motion, ltd. (TSE:RIM) is staring in the face.

I. Financials Paint a Troubling Picture For Canada's Top Phonemaker

As noted by the Associated Press, RIM's stock this week hit its lowest level in eight years.  Today the stock hit a new low of $11.63 USD/share, before rebounding slightly to the current trading level of around $11.90 USD/share.

This dismal performance and its effect on RIM's once-strong market cap stand in startling contrast with rival Cupertino, Calif.-based smartphone maker Apple, Inc. (AAPL).  Apple, maker of the iconic iPhone, is about $80 USD off record highs, but that mini-slump/profit-taking contraction hardly takes away from the fact that Apple's shares recently hit $644 USD/share -- by far the highest value in history.

To be fair Apple may be a bit over-valued.  The world's most valuable tech company is worth approximately a third more in market cap than Exxon Mobil Corp. (XOM) -- the world's second most valuable company.  While Apple is narrowly the world's most profitable company (posting $11.6B USD in the most recent quarter), Exxon Mobil is close behind with $9.45B USD in profit -- only 22 percent behind.  But the slight difference in profitability vs. market cap surely bakes in Apple's meteoric rise in sales.

Many believe Apple may be the first trillion-dollar corporation in world history.

By contrast RIM has suffered an epic fall in share prices and profitability.  The company recently posted its first quarterly loss, flipping from years of strong profits. 

BlackBerry Bold 9900

A key concern is that despite the long string of profits, RIM only has $7B USD in cash and assets [source], a stockpile that recent quarters have eaten away.  This contrasts with some other struggling players like Nokia Oyj. (HEX:NOK1V) who has over $22B USD in assets hoarded away [source].  In other words, RIM has much less of a cushion to weather a prolonged maelstrom of depressed sales.

Many financial experts believe RIM is destined to become the smartphone industry's highest profile casualty yet.

II. BB10: Do-Or-Die

Thus it's likely do-or-die for the company's latest smartphone operating system release. At its peak in 2009 nearly one in two smartphones sold was a BlackBerry.  Today that number is around one in twenty smartphones.  RIM's last and best hope to keep from fading completely out of the sales picture is its new QNX-based operating smartphone operating system BlackBerry 10 (BB10).

The unfortunate news for RIM is that BB10 -- expected to launch this spring -- has been delayed months on the grounds of RIM's inability to find acceptably power-efficient mobile chipsets -- a problem that does not appear to be stopping LTE-empowered Windows Phone-makers like Nokia or Android LTE-phonemakers like Samsung Electronics Comp., Ltd. (KSC:005930).

The good news is that the company's recent launch of alpha builds of BB10 on development devices showed something RIM has long lacked -- a modern smartphone operating system.  BB10 in its semi-early form resembles a cross between Android 4.0 Ice Cream Sandwich and the PlayBook 2.0 OS -- the also QNX-based operating system design found on RIM's titular tablet.

RIM Sign
 BB10 is likely RIM's last shot at a turnaround. [Image Source: BGR]
Despite that promising show, new more sensible executive leadership, and RIM's increasing bravado with respect to its newfound feelings of superiority over Apple, et al., success is anything but certain for the Canadian phonemaker.  Many analysts believe BB10 is too little too late.  RIM may yet prove them wrong, but the company's record lows in share prices -- while partly a measure of the mini-slump the tech market has been in, in recent weeks, also serve as a telling sign just how little leeway RIM has in its quest to rediscover success and avoid a sale.

Rivals like Samsung, Microsoft Corp. (MSFT), Apple are likely salivating at RIM's rich patent portfolio and the company's renowned proprietary physical keyboard designs.    But despite its bitter slump RIM is not dead -- not yet.

Source: AP

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RE: Patents
By Uncle on 5/4/2012 2:27:08 PM , Rating: 2
Miracles do happen.I remember back a few yrs when Apple was going down for the count and the company bent over and let SJ take over the helm again. So I'll wait for the Blackberry 10 to come out before I count RIM out.

RE: Patents
By Gio6518 on 5/4/2012 2:31:43 PM , Rating: 5

Apple turned around because Microsoft bailed them out, Microsoft was worried without a competing OS that they would have a monopoly and they powers that be, wouldn't allow it. The iPod did help build on it and sprung back, but without Microsoft, Apple never would have that chance.

RE: Patents
By Gungel on 5/4/2012 3:18:45 PM , Rating: 2
Maybe Microsoft comes through again but this time for BB. I could imagine that Microsoft would be very interested to acquire some of Blackberries IP to use in WP.

RE: Patents
By Samus on 5/4/2012 5:40:42 PM , Rating: 1
If Microsoft is buying a phone maker, it isn't going to be RIM, it'll be Nokia.

Nobody wants to bail RIM out.

RE: Patents
By ritualm on 5/4/2012 8:14:20 PM , Rating: 2
I'd bet RIM gets snapped up by the likes of Raytheon and the other big players in the defence biz, simply because of its existing government contracts.

RE: Patents
By Lord 666 on 5/4/2012 8:25:38 PM , Rating: 2
Cisco would. Both are in deep with DoD

RE: Patents
By TheEinstein on 5/4/2012 3:25:23 PM , Rating: 2
Funny how no one speaks of Linux as a rival anymore.

And ofc the bravado of Google with their OS aspirations died fairly easy as well seems.

RE: Patents
By ritualm on 5/4/2012 4:37:51 PM , Rating: 2
Because it simply doesn't register a heart beat in the consumer space. If you run Linux on your computers, it's a given you like to tinker with it. It's still too difficult to use for most people e.g. non-techies.

A lot of hardware/software recommendations I see nowadays come down to: if MS/PC gives you/someone too many headaches and support calls, use Apple/iOS. Ubuntu is a very distant third, never mind any other Linux flavors out there.

RE: Patents
By Tony Swash on 5/5/12, Rating: 0
RE: Patents
By rudy on 5/5/2012 4:12:52 PM , Rating: 2
It will require more than a miracle for RIM. Apple could kick back because they got in on the MP3 explosion. What exploding market is their for RIM? What vertical integration does RIM have? You have to have some reason to exist. The only option RIM has is to shore things up and restructure the business around being much smaller and producing niche products.

Apple has a desktop OS business that had old fans. And even now they have lots of vertical integration phones, mp3 players, computers, and software services. RIM has only software services and a phone. No one is going to buy a black berry computer, they dont have the market share anymore to push app development, the only option they have is to develop all the important apps themself.

This will continue and the only chance RIM has is to sell out to a company that either wants to push OS share, and the CEO will be smartest to sell out NOW, the sooner he sells out the more money he will get. There is no hope at all for this company. All sorts of asian companies are better positioned to be OEMs. And they have lots of OS choices to drop on their phones from windows phone to android.

The only other option I could see is if BB decides to sell start selling their OS to other phone makers for a cheaper price.

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