RIM is down but not out - Macleans.ca
 

RIM is down but not out

RIM latest device, the Torch 9800, was unveiled this summer to be little more than an iPhone catch-up attempt


 

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A few years ago, shares of Research In Motion were flirting with a price of $150 and co-CEO Jim Balsillie was talking about simply trying to steer the BlackBerry juggernaut, as opposed to actually driving it. These days, however, observers can’t be blamed for wondering if the wheels have fallen off RIM’s business altogether.

RIM latest device, the Torch 9800, was unveiled this summer and instantly deemed by tech blogs to be little more than an iPhone catch-up attempt—and a poor one at that. RIM sold about 150,000 of the devices in the U.S. in its first weekend, while Apple pushed about 1.7 million of its new iPhone 4s out the door during a comparable period, albeit through a multi-country launch.

But the real kicker has been the handful of U.S. analysts who have slapped a rare “sell” rating on RIM’s shares, which have plummeted by about 35 per cent to around $48 over the past six months. One writer has even compared RIM to Palm in its final glory days. But is it really the beginning of the end for RIM? “The demise-of-RIM argument is hard to understand,” says Kevin Restivo, an analyst at IDC Canada. “It was a one-horse race for years because RIM was miles ahead of the game, but the fact that RIM now has competition isn’t any surprise.”

He says it’s a mistake to compare Apple and RIM because, for the most part, they are targeting different customers. The iPhone was conceived as a consumer device while RIM’s roots are in serving big corporations and governments—users who generally value security and control over dazzling touchscreen displays and giant app stores.

Moreover, the global smartphone market is forecast to grow by more than 260 per cent by 2013, from 180 million to 650 million devices, according to numbers from Gartner Research. “No one manufacturer can capture all this volume,” says Gartner analyst Ken Dulaney. “It’s just that [RIM’s] market share will shrink because their OS improvements are not able to help them capitalize on the growing touch-screen segment dominated by Android [Google] and Apple.”


 

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