The Motley Fool Previous Page

RIM Keeps Getting Worse, Google Targets the iPad, and Red Hat Soars

Eric Bleeker
March 29, 2012

The tech market slid today, with the Nasdaq seeing a ho-hum decline of 0.31%. However, quite a bit of the big news came after the bell. Let's take a lap around the biggest news in the technology world.

Tech storyline No. 1: RIM hits a new low
After the bell, Research In Motion (Nasdaq: RIMM  ) reported earnings, and there's really only one word for them: ugly. The company not only badly missed on revenues, posting a 19% decline from last year to $4.2 billion, but it also stopped giving guidance -- just one more sign that continued pain is in store for the company.

Of course, RIM didn't need to give guidance to illustrate that point. At a time when smartphone sales are still booming across the world, RIM is seeing its sales decline and its market share erode. With RIM hinting that it's exploring "opportunities and partnerships," the drumbeat for an acquisition will only get louder in the coming months. The greatest asset remaining for the company is still its valuable network-operations center services and other messaging services. RIM is able to collect about $5 each month per user thanks to its Services division, which charges fees to wireless carriers.

The problem is that with RIM's hardware sales falling, that services revenue will eventually dry up. Right now, RIM's still seeing revenue from all the handsets it sold while hardware sales were ramping up across 2010, but its weak results will mean that as those customers churn out to other smartphones when their contracts expire, RIM's services revenue will begin falling as well. Thus, the window for striking a deal could be closing fairly quickly. While it's fashionable to bash RIM, its problems are even more deeply rooted than many investors realize.

Tech storyline No. 2: Try harder, Google
In the immortal words of W.C. Fields: "If at first you don't succeed, try, try again. Then quit. There's no point in being a damn fool about it."

This is advice Google (Nasdaq: GOOG  ) should quickly heed on its newest attempt to gain tablet traction against Apple's (Nasdaq: AAPL  ) iPad. According to The Wall Street Journal, the company is planning a tablet store to help drive adoption of Android tablets.

Readers might be quick to note that this isn't Google's first attempt setting up a store to drive Android sales. The company had initially tried selling its Nexus One phone through its own site as well. It's unclear what final form Google's newest store will take, such as whether the site will predomi