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Research In Motion Riding Off the Rails



Mike Lazaridis can now say he has something in common with Bill Gates. Roughly 17 years after Microsoft's (Nasdaq: MSFT  ) co-founder walked off the set of an interview with Connie Chung, Lazaridis cut short this week's interview with the BBC.

As you'll see, Lazaridis took issue with questions posed about (ahem) "issues" raised a year ago by the governments of the United Arab Emirates and India, among others. Regulators there feared terrorists were using Research In Motion's (Nasdaq: RIMM  ) encrypted network to communicate.

Whatever concerns there were now appear to have been addressed, so it's tough to blame Lazaridis for being frustrated by correspondent Rory Cellan-Jones' line of questioning. Less forgivable is how he positions his company in follow-on comments, which you'll hear at around the 35-second mark of the interview:

"We've just been singled out, because we've been so successful around the world. [The BlackBerry is] an iconic product. It's used by business, it's used by leaders, it's used by celebrities, it's used by consumers, it's used by teenagers. We're just being singled out because of our success."

You know which other device that describes? Apple's (Nasdaq: AAPL  ) iPhone. And you could make similar claims about some of the most successful handsets based on Google's (Nasdaq: GOOG  ) globetrotting Android OS. HTC, notably.

No matter. According to Lazaridis, everyone who isn't aboard the BlackBerry train is a hater. Market share statistics? Pshaw. Who cares if Motorola Mobility (NYSE: MMI  ) was the only company to bleed more handset share in the U.S. from November to February? Everything's great!

Most troubling is that we've seen this sort of behavior before. Lazaridis fumbled over himself in taking questions from Wall Street Journal reporters Walt Mossberg and Kara Swisher during December's "Dive Into Mobile" industry conference.

Gates ultimately settled down to become one of the great tech CEOs of the last 30 years. Lazaridis seems unlikely to reach this same plateau. His comments look backward rather than forward. Sure, RIM has been a pioneer. Sure, profits are up more than 30% over the past year. All of that's great for those looking back at a trailing decade filled with success. Today's investors wonder what's next.

So far, RIM hasn't given them much to cheer about. Lukewarm reviews culled at Fortune suggest the new PlayBook tablet will disappoint just as much as the Torch handset did last summer. Specifically, Fortune says both Mossberg and the tech gurus at Engadget point to the PlayBook's inability to perform email, contact, and calendar tasks without the aid of a tethered BlackBerry as a crippling deficiency.

Fools also lack faith. Only 46% of those I polled in a recent survey said they'd purchase the device, and those who've rated the stock in CAPS give it just two stars.

"Losing market share every day is not a way to outperform. Unless they come out with something incredibly different than what they offer now, [Research In Motion] won't be a major player for long," wrote Foolish investor RepairmanJacked earlier this month in making an underperform call.

I'm forced to agree. With nothing to look forward to, Lazaridis has just the past to lean on. He's trapped; innovation is the only way out. But judging from his comments, Lazaridis doesn't believe that. He believes his company is leading and Apple and Google are lagging. Sorry, sir, but that's no longer true. The sooner you accept this new reality, the more likely it is RIM will regain its standing as a competitor to be feared.

Do you agree? Disagree? Let us know what you think about Lazaridis' comments, RIM's strategy, and the likelihood of the PlayBook earning a following using the comments box below. You can also rate Research In Motion in Motley Fool CAPS.

The Motley Fool recently introduced a free My Watchlist feature that allows users to stay ahead of the curve and receive up to date news on companies like Research In Motion, or any of its competitors. To get up-to-date company news and analysis, add RIM to your watchlist today.

Google and Microsoft are Motley Fool Inside Value picks. Google is also a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended members create a bull call spread position in Apple and a diagonal call position in Microsoft. Motley Fool Alpha LLC owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Apple, Google, and Microsoft and has written Apple puts. The Fool is also on Twitter as @TheMotleyFool. Its disclosure policy just poked you on Facebook.

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