Another Reason to Short Research In Motion?

On the list of all the things Research In Motion (Nasdaq: RIMM  ) would like to see users say about its BlackBerry smartphone, "fail" has to be at or near the bottom. But that's what they're saying on Twitter.

The phrase "blackberry fail" is still pulling comments after yesterday's nationwide network outage. And this morning, "BlackBerry" is what Twitter calls a trending topic of discussion. Many of the comments are, shall we say, less than flattering.

Some predicted the BlackBerry's decline in the face of the rising threat from Apple's (Nasdaq: AAPL  ) iPhone and Motorola's (NYSE: MOT  ) Droid. Other tweeters spoke of losing patience with a device they've come to rely upon.

We don't know exactly what happened. All we can say for sure is that the problem was and may still be pervasive. Earlier today, Dow Jones reported service delays in the Americas and parts of Asia.

But there may be a bigger problem to address here. Venture capitalist Fred Wilson, an early investor in Twitter, theorizes in this blog post that Research In Motion's network troubles caused problems for AT&T (NYSE: T  ) and Deutsche Telekom's (NYSE: DT  ) T-Mobile, among others.

"I guess that means that Blackberry has some kind of overlay network on these carrier's data networks. I am sure that is well known to mobile phone geeks and has been true for a long while. I just never wrapped my head around it," Wilson writes.

It's an interesting take, and a dangerous realization if he's right. RIM is contending with consumptive competitors in the iPhone, Palm's (Nasdaq: PALM  ) Pre, and the varying handsets using Google's (Nasdaq: GOOG  ) Android operating system. If RIM's network can't digest the data it feeds on now, what will carriers do to insulate themselves from the resulting heartburn?

Next year's likely to bring even more smartphone traffic, which could mean more outages for BlackBerry users. My guess is some of them will choose not to stick around for the misery. That's why I'm still short the stock in Motley Fool CAPS.

Now it's your turn to weigh in. Would you short Research In Motion? Please vote in the poll below. You can also leave a comment in the box at the bottom.

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Fool contributor Tim Beyers had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy wonders if anyone really means it when they sing "let it snow"?


Read/Post Comments (10) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 23, 2009, at 12:27 PM, pondee619 wrote:

    CrackBerry addicts help me out, please.

    I don't have a blackberry. Don't see the need for one. Please, tell me what earth shattering, life changing, life or death application you could not perform during the last black out and how that failure ruined your life forever.

    The news media is in a turmoil over the "Blackberry Blackout". I need to know why this was of such import. What was so urgent, that needed immediate attention and could not, absolutely, wait until morning or have been handled another way?

    Thank you:

  • Report this Comment On December 23, 2009, at 12:55 PM, MichaelAThompson wrote:

    LOL with RIMM's mad sales/earnings growth rate I'm sure that short strategy of yours will work out just peachy! ;)

  • Report this Comment On December 23, 2009, at 1:04 PM, pondee619 wrote:

    Dear Info...:

    what earth shattering, life changing, life or death application could you not perform during the last black out and how did that failure ruin your life forever?

    That was the question. not what coulda, shoulda, woulda happened, but what did.

    Please tell me that you know your marraige location and don't need to have it sent to you at the last minute. Perhaps the blackberry just enables us to pay no attention, at all, to our lives, loved ones, businesses et. al.

  • Report this Comment On December 23, 2009, at 3:13 PM, pondee619 wrote:

    "The contract went to a competitor who submitted his bid successfully while my blackberry is down" How did the competitor submit his bid? Why couldn't you do likewise? Perhaps the lession is not to put all of your communications eggs in one basket, no matter who the provider is. Perhaps waiting for the last minute to complete important business is also not such a good idea.

    Does anybody else have an answer to my question?

  • Report this Comment On December 23, 2009, at 3:13 PM, pondee619 wrote:

  • Report this Comment On December 23, 2009, at 4:04 PM, BR14 wrote:

    "I am going to terminate my blackberry services and will buy a Apple MacBook Pro with a wireless modem stick for email anywhere"

    There's the answer. BlackBerry allows you to operate as if you were carrying around a suitcase full of equipment.

    As for why is BlackBerry so important and ahead of the curve (despite all the hype against RIM). It's PUSH.

    If you have to ask, you wouldn't understand ;-) (And surprisingly few analysts get it).

    Push is why RIM needs carrier infrastructure, and explains why an email sent to a BlackBerry can arrive in seconds while not draining your battery.

    And RIM's infrastructure means BB Messaging text messages are so much more reliable than SMS or other forms of IM (generally that is).

    If their numbers last week are anything to go by, I'd say they're becoming victims of their own success.

    I can understand why someone bidding by the minute would be upset at a BB outage. But think about all the other deals you won because you were able to bid via your BB.

  • Report this Comment On December 23, 2009, at 4:20 PM, xjp83x wrote:

    Never...ever.. tell people to short in a bull market.

  • Report this Comment On December 23, 2009, at 4:23 PM, xjp83x wrote:

    InfoThatHelp,

    WHY would you ever do a $345,000 contract on a BLACKBERRY? What were you thinking?! It was your fault. That's such a stupid reason to dump a good business like RIMM.

    I don't own any RIMM shares. I actually own Apple, but these kind of threads just piss me off.

  • Report this Comment On December 23, 2009, at 10:05 PM, zonnked wrote:

    @InfoThatHelp, at 1:30pm you were threatening to cancel your service. "I am going to terminate my blackberry services and will buy a Apple MacBook Pro with a wireless modem stick for email anywhere."

    At 5:04pm you have an Apple MacBook Pro and an iPhone, you run your business entirely on the MacBook Pro "the most reliable quality business machine in the world", with a complimenting iPhone, and now have "...total reliability and performance..."

    You can buy a MacBook, and an iPhone, switch over your entire business model, and determine its total reliability in 4 and 1/2 hours?

    I don't disagree with your arguments, but this is proceeding at the speed of a "War of the World" radio play remake.

    Just saying...

  • Report this Comment On December 23, 2009, at 10:07 PM, zonnked wrote:

    (Oops, make that 3 and 1/2 hours... ;-)

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