Will Research In Motion Ever Catch a Break?

One day after co-CEO Jim Balsillie gave a keynote address in Dubai -- to announce an innovation that, frankly, isn't very innovative -- Research In Motion's (Nasdaq: RIMM  ) network suffered an outage that spanned across two continents. As a result, the stock closed down marginally on a day when the Dow Jones Industrial Average (INDEX: ^DJI) soared nearly 3%.

Though the specific number of those affected is unknown at this point, the UK's Guardian newspaper put the total in the "tens of millions" across Europe, the Middle East, and Africa.

The timing couldn't have been worse. Not only was Balsillie in an affected region the day prior, but also his unveiling of a forthcoming software service called Tag describes an old feature available in other phones as "innovation" for BlackBerry users.

But you wouldn't know it at first. Tag uses near-field communications (NFC) technology -- noticeably absent from Apple's (Nasdaq: AAPL  ) latest iPhone -- to share contact info, documents, and media quickly. Just gently bump two BlackBerry handsets together to complete a data transfer.

Sounds cool, right? It would be if it were new. Instead, a company called Bump Technologies has been providing an app for both iOS and Google's (Nasdaq: GOOG  ) Android that performs essentially the same function using the cloud and algorithms to match phone signatures.

As glitches go, neither the outage nor the lateness of Tag matters much. Rather, it's what these events represent -- first, that despite market-share losses to both iOS and Android, Research In Motion can't handle the capacity it has; and second, that there's so little innovation at RIM nowadays that a years-old iPhone app passes for improvement.

Too harsh? Perhaps. I've been pretty tough on RIM -- but that's only because the company operates in a tough market with tough competitors, including Apple, Google, Microsoft (Nasdaq: MSFT  ) and Nokia (NYSE: NOK  ) . Mistakes cost more in an environment like that. Come next quarter, we may find that the price for this week's flubs is even higher than skeptics like me assume.

Do you agree? Disagree? Please weigh in using the comments box below. You can also keep tabs on the mechanics of the mobile market by adding any of these stocks to your Foolish watchlist:

Fool contributor Tim Beyers is a member of the Motley Fool 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 Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Microsoft, Apple, and Google. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, and Google, as well as creating bull call spread positions in Microsoft and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (3) | Recommend This Article (0)

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 October 11, 2011, at 10:15 PM, inno1 wrote:

    As mentioned in this article the people who should be changed are also the people who have the power to change. This is just like telling Dictators (like Murmar Qadhafi) you change head of the Government! How is that even feasible. So there is not much can be done to RIM, except to Pray God that some day some sense of wisdom will strike the dictators Jim Balsillie and Mike Lazaridis. May God Bless RIM.

  • Report this Comment On October 12, 2011, at 1:10 PM, WalterMatthews wrote:

    And the activist should be pouncing on this. I think Ichan and Whitworth get a bad wrap when they come to the rescue for things going a wry http://www.muckety.com/Ralph-V-Whitworth/25487.muckety

  • Report this Comment On November 14, 2011, at 5:27 PM, maxmz01 wrote:

    RIM have problem in its enterprise culture and outdated management, looks big but really old before grow up, low efficient and slow motion speed, always play catch-up.

    Years before, companies make money from feature phone, it give RIM chance to make money without competition, but when they want make money in smart-phone market, they win easily, why, is that because they hired supper employees, no, RIM also have excellent employees from all over the world.

    Strange culture in RIM, and this culture generate self-destroy political environment.

    In RIM if a new hired person figure out major problem and introduce efficient approach, both manager and his buddy group member will proof their wrong approach works. just like someone point out driving a car is right way, pushing a car is wrong way, then both manager and his buddy group member will hate you, and proof that 3 person can also move the car by pushing it. cheating email will be sent to some vice president, saying like: see, the car moving, pushing a car is a natural part of the process.

    RIM is not system oriented company, just self-destruct small company buddy culture, with a fat body. it is very strange company culture and strange company political environment, it promote stealing and cheating skill. RIM's management may be a typical instance in MBA course.

    CEO may want the management better, but can't reach the target because of the culture, like I said 3 years ago, RIM is old before really grow up.

    survive on its own is possible, but need a culture change like to promote hard working, telling/doing real things, but will the managers and their buddies say: "driving a car is right way, pushing a car is wrong way, pushing a car is not natural part of the process" ? the answer is impossible.

    This culture deny or steal hardworking team members' contribution/innovation, generate strange political environment, destroy RIM.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1568067, ~/Articles/ArticleHandler.aspx, 10/21/2014 5:05:10 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement