How Research In Motion Is Copying Apple (And Why It's a Terrible Idea) (BBRY)

How Research In Motion Is Copying Apple (And Why It's a Terrible Idea)

Tough markets have a way of forcing troubled companies into bad decisions. Research In Motion (NASDAQ: BBRY ) is about to make a whopper.

You wouldn't know it from the stock action. The BlackBerry maker's shares soared more than 10% in the first day of trading after CEO Thorsten Heins told German newspaper Die Welt that he and his team are exploring "strategic options" that include selling in-house hardware production or licensing the BlackBerry software to third parties.

Sharp declines in RIM's operating margin probably justify cost-cutting and at least some amount of hardware outsourcing. But licensing? History hasn't been kind to underdogs who chose to license their way to market share gains. Just ask Apple (NASDAQ: AAPL ) what cloning did to the Mac in the years before Steve Jobs returned to the company.

Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova recounts those days and the lessons they hold for investors in the video below. Please watch, and then leave a comment to let us know what you think about Heins' proposed strategy.

if Research In Motion badly trails Apple it's because the Mac maker has been hitting on all cylinders for the better part of a decade, rewarding long-term shareholders like few other stocks before it. The question is: Can the rally continue? The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, address this question and more in our comprehensive Apple research service. Want access? Click here to find out what Eric thinks right now and get a free year of updates as news breaks.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's Web home and portfolio holdings, or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends and owns shares of 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.

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Report this Comment On January 23, 2013, at 6:58 PM, digitally404 wrote:

RIM makes no intention on licensing its BB10 software until it's been proven in the market.
Since the majority of RIM's revenues come from service not hardware, it may make sense to license out BB10 and allow the platform to proliferate more and separate itself from hardware altogether.
Although I do prefer a vertically integrated (hardware and software) much more because when all the pieces and parts come from the same shop, they work... But that's personal preference.
Report this Comment On January 23, 2013, at 8:25 PM, TimKnows wrote:

There isn't a slight bit of simlarity between the two companies. Not even close, and now we know that Apple is failing miserably in 2013. RIMM is going to storm the sector and take a huge chunk out of Apple's market share. Yes, I do know that Apple is considering different colors for their handsets, point well taken. Oh boy.
Report this Comment On January 23, 2013, at 9:14 PM, MW88 wrote:

You continue to write terrible articles. Stop trying to undermine one of the pioneers of the smart phone
Report this Comment On January 23, 2013, at 10:27 PM, jwjsprenger wrote:

It's simple what they must do. Make phones that their customers want to buy. Develop other network services fees such as credit card transactions. Do not worry about Apple or Android. Keep their hard core fans happy. Hey I think this is what they are doing.
Report this Comment On January 24, 2013, at 6:26 AM, rapag wrote:

Buying low - selling high. now in my opinion is the time to realize profits by selling Apple-shares, as its market-cap as well as its market-share may have reached its point of culmination and cannot be enlarged much further.
Because i-phone, i-pad, etc once were products the tech-avangard used first, than the cool and/or sucessful, but in the meantime nearly everybody owns so that there isn't much left of the original excitement and product-identification. It is simple boring to buy a divice everybody else already owns.
So the question is which products will then be bought. I guess its not android-phones because the OS, which i currenty use, is just not powerful enough, in particular does not allow multi-tasking. In addition, a lot of people do not like google inc. tracking internet behavior and other personal data.
In my opionen, a lot of people are instead waiting for something new, something that pushes mobile-phone functionality to a new level. That could be Nokia and WinPhones. Disadvantage for them is the already existing near monopoly of microsoft in the pc-arena, because of which lots of people don't want it to on their phone at the same time. As is the case with google, people are afraid that one single company is getting to much personal data, the destribution of which getting out of control.
Research in Motion in my opinion with its seemingly much more powerful BB 10 OS will offer a solution not only in regard to data-protection and security issues through its certified security standards, its complete separation between personal and business data. As pre-launch reports show, this new OS allows real multitasking ability a lot of people will love.
My conclusion therefore is that many apple-shareholders as well as potential "apple-class"-consumers will switch to something else. If only a small part decides to switch to RIM, this alone will build bullies sentiment towards its shares and towards the new phones.
Report this Comment On January 24, 2013, at 8:49 AM, criticalfool wrote:

No offense but you are so ignorant, keep writing articles for a few pennies per article but please for your own sake, don't be under any illusion that you know anything about RIM or its industry.