Do or Die: BlackBerry-Maker RIM's Stock at 8 Year Low as BB10 Nears
May 4, 2012 1:06 PM
(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. (
) is staring in the face.
I. Financials Paint a Troubling Picture For Canada's Top Phonemaker
, 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. (
). Apple, maker of the iconic iPhone, is about $80 USD off
, 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. (
) -- 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 [
], a stockpile that recent quarters have eaten away. This contrasts with some
other struggling players like Nokia
) who has over $22B USD in assets hoarded away [
]. 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
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. (
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
PlayBook 2.0 OS
-- the also QNX-based operating system design found on
RIM's titular tablet
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
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
avoid a sale
Rivals like Samsung, Microsoft Corp. (
), Apple are
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.
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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