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Can Research In Motion End Its Slide?

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Research In Motion (Nasdaq: RIMM  ) appears to be doing something about its lagging performance. It recently replaced its two-headed monster CEO with one person, new CEO Thorstein Heins, though he has started off on the wrong foot in proclaiming that the status quo should work for the time being. As my colleague Sean Williams points out, the "steady as she goes" strategy has failed to help RIM recently, so why does he think it will help in the future?

Enterprise strength is waning
If there is one thing that RIM has over its competitors, it's that its phones are well liked by business and government users. The security afforded over the BlackBerry system is good enough for government agencies; in fact, up until October 2011, a BlackBerry was the only phone that can be used to remotely access email on most Department of Defense systems.

This position as enterprise leader has already started to come under fire, with oilfield-service giant Halliburton announcing a move from BlackBerry to Apple's (Nasdaq: AAPL  ) iPhone over the next few years. And it may not end there. RIM has been known to skimp on upgrading its systems, including a failure to upgrade that directly contributed to a three-day network outage back in October. I think that security concerns could be easily overcome by any of the other smartphone providers, and I am paying close attention to what Microsoft (Nasdaq: MSFT  ) can do with its new Windows Phone.

Microsoft may already have a leg up on its competitors, because Windows is already the operating system of choice for most large businesses. The idea of a phone that can be an extension of your desktop at work -- including a streamlined integration of Outlook, the most widely used email client -- could bode well for Mr. Softy and its more recent foray into the mobile space.

Consumers are important, too!
While RIM could probably do well enough by focusing on its enterprise business, the true money in mobile is made when consumers are buying your products. It wasn't all that long ago that BlackBerry was the smartphone to have. Now, more than 75% of the 100 million smartphones owned are either Google (Nasdaq: GOOG  ) or Apple, which are just eating away at the market share of RIM and Microsoft. The current market share for Microsoft doesn't yet reflect its new generation of Windows Phone, but many are pointing to the tech giant's partnership with Nokia (NYSE: NOK  ) , and its recently launched line of Lumia smartphones, as a positive sign for the future of the phone. It is not out of the question to see Microsoft gaining some of RIM's current market share going forward.

Is it too late for RIM?
Research In Motion still has an opportunity to capitalize on the current smartphone revolution. It is just going to take some different thinking by those in charge of the company. A new CEO is a good start; only time will tell if having similar ideas to the previous regime will keep the company mired in its current slump.

The emergence of mobile computing isn't a new story, but there's still plenty of opportunity for savvy investors to cash in on this once-in-a-lifetime trend. We already know many of the largest players well, but some of the best ways to play this shift are still under the radar. To expose our readers to these companies, the Fool recently wrote a free report detailing 3 Hidden Winners Of The iPhone, iPad, and Android Revolution. We made it absolutely free to our readers as well, so access your free copy today.

Fool contributor Robert Eberhard holds no position in any company mentioned. Follow himon Twitter, or check out his holdings and a short bio. The Motley Fool owns shares of Apple, Microsoft, and Google. Motley Fool newsletter services have recommended buying shares of Nokia, Apple, Google, and Microsoft, as well as creating a bull call spread in Apple and Microsoft. 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 (6) | Recommend This Article (3)

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  • Report this Comment On March 13, 2012, at 7:30 PM, funspirit wrote:

    Too late for RIM, they are no longer "cool" ... they have fallen behind, the decked is stacked against them.

    To boot, Google is innovating as is Apple (think Siri)

    To enhance their own repoutation, Apple is starting to go green too, which should add more customers (details here):

    I think RIM is done for, best possible thing is for them would be a buyout, but who is left to buy them?

  • Report this Comment On March 13, 2012, at 7:38 PM, fatmonk wrote:

    Not long ago, MySpace did not pay attention to UI. RIM did the same thing. Apps are the keys for the war of smart phones and tablets. Few years back IT loves RIM and Windows... today IT must know iOS and MacOS. RIM's days are in number;

  • Report this Comment On March 13, 2012, at 7:50 PM, deemery wrote:

    > If there is one thing that RIM has over its competitors, it's that its phones are well liked by business and government users.

    Not so true any more. Lots of people I know are moving away from Blackberries.

    Frankly, Blackberry was a 1-trick pony, portable email. That's not a particularly impressive trick any more. Between Android and iOS, new phones do a lot more, and if you really have to have that thumb keyboard, lots of Android choices. (I personally was never impressed with Blackberries, I want a -full size- keyboard and screen for email.)

    Playbook was an unmitigated disaster for RIM. It showed the company was totally clueless going forward, and Playbook couldn't even do that one trick Blackberries could do. Add to that some data /server embarrassments, and RIMM is a zombie looking for brains (and not finding any.)

  • Report this Comment On March 14, 2012, at 3:20 PM, ampezzi wrote:

    Rimm have goods products and is a good company with no debts and a strong balance sheet.

    The Small investor is only stupid.

  • Report this Comment On March 16, 2012, at 1:46 AM, Micahelj12074 wrote:

    Judge allows Fairfax lawsuit

    National Post ·

    A U.S. judge has refused to dismiss a US$6-billion lawsuit launched in 2006 by Toronto's Fairfax Financial Holdings Ltd. against S.A.C. Capital Management and 22 defendants.

    Fairfax is suing S.A.C. and others for financial damages that resulted from the alleged creation of a short-selling disinformation conspiracy designed to drive down Fairfax stock.

    S.A.C. and a group of lawyers claimed there was no conspiracy and no wrongdoing, and that their trading was legal.

    But Judge Deanna Wilson did not agree.

    "I hope that this didn't happen, because it's a scheme of tremendous proportions," said Judge Wilson at the hearings two weeks ago. She rejected motions for dismissal and ordered the matter to proceed to trial under RICO -- U.S. organized-crime law --and other statutes.

    Fairfax alleges S.A.C. and various affiliates, with US$40-billion in assets under management, attacked the company after it was listed in 2002 on the New York Stock Exchange. In the first few weeks, Fairfax stock was driven down by 15%, or US$14 per share.

    By spring 2003, it had rebounded from US$50 to US$96, but then allegedly was attacked again in summer, 2006. It now trades around $230 and has a market capitalization of US$4-billion. The insurance conglomerate is Canada's 49th-largest corporation by revenues.

    The attacks caused financial damage to shareholders over the years and to the company's reputation, the company says.

    "It was a massive and fraudulent disinformation campaign," reads Fairfax's statement of claim, which alleges "dirty tricks," fronts, aliases and bear attacks were used to try to ruin the company's reputation and price.

    One defendant is analyst Spyro Contogouris. The lawsuit alleges he and others were hired to spread disinformaton to journalists, online chat rooms, regulators, auditors and rating agencies, and even harassed Prem Watsa, Fairfax chief executive and chairman.

    "The amended complaint alleges a shocking scheme against a prominent Canadian company and its American subsidiary," said Fairfax lawyer Marc Kasowitz in a telephone interview yesterday. "The decision, denying the motions to dismiss, is very important because it confirms that the legal challenges to the amended complaint are without merit and that this case can now proceed aggressively to discovery and trial."

    S.A.C. was accused of another "bear raid" short-selling conspiracy by Canada's Biovail Corp., which has also sued the hedge fund and others for US$6-billion. That matter is on hold in a New Jersey court, Mr. Kasowitz said.

    Short selling is a legitimate strategy but, if proven, a whispering campaign against Fairfax spreading false information would be illegal. - Read Diane Francis's blog at

  • Report this Comment On March 18, 2012, at 6:06 PM, maxmz01 wrote:

    RIM has strange culture and self distruct 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, in order to deny new hired contribution of introducing skill of drive a car, they have to deny merit of driving a car.

    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.

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

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