RIM on the ropes

The headquarters of BlackBerry maker RIM in Waterloo on June 29, 2012. (QMI Agency/KATE DUBINSKI)

The headquarters of BlackBerry maker RIM in Waterloo on June 29, 2012. (QMI Agency/KATE DUBINSKI)

NORMAN DE BONO, QMI Agency

, Last Updated: 12:25 AM ET

LONDON, ONT. - It has all the traits of a Greek tragedy, playing out in front of the world's tech geeks and blue suits.

Waterloo, Ont.-based Research In Motion, the embattled BlackBerry maker, has been done in by pride worthy of Sophocles, a healthy dose of Hubris, or too much self confidence and tragic errors. Lots of tragic errors.

"They have been ham-fisted." technology consultant Carmi Levy said of RIM. "But I see this company surviving, existing, in some form -- but what that will be remains to be seen. Remnants of this company will carry forward in one way or another."

Crumbling sales, huge layoffs, stock worth a fraction of it was once, rivals eating its smartphone lunch -- RIM has been hit by it all.

It ignored the iPhone in 2007, sticking to its keyboard hardware instead of opting for a touch-screen and more innovative software.

Others, such as Google Android, soon realized where the sector was moving, turning hand-held devices into a kind of pocket computer, and they scrambled to compete.

But RIM held fast, wrongly seeing itself as above the trend.

"It is astounding to me that five years after iPhone was released, RIM is not close to answering it. That is the root of the problem. The market has changed and RIM dismissed that change. This company does not have a good sense of what is on the horizon," Levy said.

RIM's sluggishness allowed Apple to take over the consumer market, content in believing it would always have the business and professional segment, analyst Krista Napier believes. But RIM failed to see workplaces would embrace BYOD (Bring Your Own Device) policies for workers, further diminishing RIM.

"They undervalued the consumer trend and how quickly business would allow workers' phones into the organization," said Napier, of International Data Corp. Canada.

Still, Napier refuses to write RIM's epitaph, agreeing it may endure in some form. But in a few years, it'll look very different than it does now, she said.

"I think they will exist in some form. We have seen other companies reinvent themselves over the years and deal with change."

On the horizon RIM has the BlackBerry 10, whose launch has been delayed until next year. Levy said the phone has to work in as many places as possible, tying together home, car and work devices to take on the competition. "If (RIM) moves into a platform and services company, it can outflank them."

Levy also sees RIM with a partner, since it needs a strategic alliance to compete better.

"They have to become more open to suitors. They slammed the door when Microsoft, Samsung and Facebook all had interest. The time is now ripe to say, yes, and start discussing options. Status quo, is no longer an option."

RIM appears to agree. Chief executive Thorsten Heins recently announced JP Morgan Chase & Co. and RBC Capital Markets were hired to examine the company's options, including partnerships, licensing its software and looking at "strategic business model alternatives."

"They are facing a Herculean task and the clock is ticking. They do not have a lot of time," Levy said.

RIM has no room for error, analysts warn. If its Blackberry 10 doesn't take off, and it doesn't find a partner, it'll burn through its cash. And that may be the end for the Canadian high-tech icon.

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"Investors are full of negativity about the company. It seems no matter what they will do, it will be mostly negative ... My guess is the company will downsize, it will try to find a new focus and may have to find a partner."

-- Harald Bathelt, Canada research chair in innovation and governance, University of Toronto

"Different pieces of RIM hold value, but its hardware is the least valuable... It still has a very strong brand name and (is very strong in) emerging countries. It will have interest among some partners."

-- Krista Napier, International Data Corp. Canada

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RESEARCH IN MOTION

HIGHS

-- Share price: $148, 2008

-- Staff: 20,000, 2011

-- Market value: $78B, 2008

LOWS

-- Share price: Less than $8, July 2012.

-- Staff: 16,000 now, 5,000 being laid off.

-- Market value: $4.7B, 2012.

GOOD ABOUT RIM

-- 78M+ subscribers, 175 countries.

-- 650+ carriers.

-- Security system industry's best.

-- No debt.

-- $2.2B cash.

BAD ABOUT RIM

-- Recent $518M quarterly loss.

-- Revenue sank 33% from year earlier.

-- BlackBerry shipments fell dramatically.

-- 8% of global smartphone market, down from 14% year earlier.

NEEDED TO SURVIVE:

-- Get BlackBerry 10 out ASAP. And it has to be great.

-- BB 10's launch early next year, already delayed about a year, will miss crucial fall-Christmas sales period.

-- Will have touch-screen technology, other features rivals have, but by then will face new challenges from Google, Windows and Apple.

-- Get smaller, with fewer products. Streamline. If needed, sell off parts.

-- React to market changes faster.

-- Leverage cash and assets into a partnership that can help it innovate.


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