It goes without saying that Canadian smart device maker Research In Motion (NASDAQ:BBRY) has seen more dark patches and recent bright spots over the last 18 months that many companies see in a lifetime. Left for dead by most tech investors, the company's stock price fell almost 90% from its all-time high in 2008 as a series of humiliating management blunders and the entry of several massive competitors eclipsed the once-king of the smartphone market. However, after purging its upper ranks and installing CEO and President Thorsten Heins a year ago, the company has undergone a transformation that has the potential to serve as a full-fledge resurgence for RIM (albeit an unlikely one).
Regardless, the company's share price has been on an absolute tear lately, doubling over the last six months and instilling a newfound hope in many that had given this company up for dead. With the impending launch of its next-gen BlackBerry 10 mobile OS due Jan. 30, the future seems as murky as ever for Research In Motion. And it was in that spirit that the Fool recently compiled a premium research report on RIM to highlight its long-term outlook. Included in the text below is a brief excerpt of this report. Enjoy!
The four areas you MUST watch
- BlackBerry 10: Hands down, BB10 is the most important factor right now that will absolutely make or break RIM. Domestic sales of existing BlackBerry 7 handsets are on the decline as consumers wait for the next-generation platform or lose patience and defect to iOS, Android, or Windows Phone. Even additional delays could be fatal, since after numerous holdups already, consumers might lose confidence in RIM's ability to ever deliver BB10. Quite literally everything is riding on BB10, and if it flops with consumers, RIP RIM.
- Emerging markets: BlackBerry 7 device sales are relatively healthier in emerging markets, where less mature networks rely more heavily on RIM's compression technology. IDC recently said that Android has now overtaken BlackBerry as the top smartphone platform in Indonesia. As previously mentioned, international sales are still on the decline, but less so than domestically. RIM could choose to strategically fall back and regroup by focusing on rebuilding its position in emerging markets.
- Cash: Last quarter was a sigh of relief for investors, as the sequential increase in RIM's cash position was certainly positive. RIM needs to conserve cash to give it more time for its turnaround, so investors need to keep a close eye on its coffers.
- Licensing: With weak BlackBerry hardware shipments, licensing out BB10 has been a hot topic of discussion. CEO Thorsten Heins is open to the idea of licensing out the new platform as an alternative that may help RIM regain some market share with the assistance of third-party OEMs. This would be a major strategic shift for the company, but it may also be just what RIM needs right now.
Fool contributor Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.