Before The Release Of BlackBerry 10, RIM May Be DOA
Businesses that endure in the marketplace, by and large, weather trends that are cyclical. No company has an unfettered ascent; there are adjustments, products that fail to launch the way the company anticipated they would, and economic events unrelated to the particular business that nevertheless impacts the business. In the tech sector, companies that were once leaders suddenly find the niche they dominated crowded by competitors who devour their market share. That is where smartphone manufacturer Research In Motion, inventor of the Blackberry, now finds itself.
As RIM prepares to release its BlackBerry 10 to the market, it is discovering that there may not be a market left that is interested in the product. With Android-based smartphones and Apple’s iPhone line currently dominating the smartphone market, Research In Motion is struggling to find its relevance. Research In Motion innovated the BlackBerry 10 to try to compete. Unfortunately, in advance of the BlackBerry 10 release, Apple slipped rumors of the iPhone 5 and Nokia made a public attempt to revitalize its place in the smartphone market by adopting the Windows Phone OS.
The news for RIM became more and more grim as its stock dropped to $9.57. While stock prices and business trends have a tendency to be cyclical, the fact that Research In Motion’s stock has fallen below ten dollars a share indicates a severe lack of consumer and investor confidence in their products and the long-term viability of the company. Considering that Research In Motion shares are now trading at 1/15th of what they were at only five years ago, many pundits suggest that RIM is in its death throes.
Research In Motion is not surrendering yet. While the high-end and mid-range smartphone market might be closing to RIM’s products, the company has launched new initiatives in India and several other countries to take a dominant position in the low-end smartphone market. While this might not seem an ideal direction for the company to go, leading the charge for smartphones in emerging markets might represent RIM’s best chance to remain solvent.
Many companies experience a stock drop shortly before they manage to turn the company around. Apple Computers looked bleak in 1985 as the stock declined in both June and in October, following the resignation of Steve Jobs. Research In Motion may be about to turn it all around, as Apple did when it announced the sale of 500,000 Macintosh computers in 1985 (the point at which the stock began its meteoric ascent). If not, then Research In Motion will join a long list of companies that once had a market presence only to be replaced when others in the market caught up and eclipsed their accomplishments.
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