http://online.wsj.com/article/SB10001424052702303339904576406062012367334.html
RIM is no different from any technology company that has failed to understand market changes and its place in the changed marketplace.
Like many telecom technology companies that enter the marketplace, RIM went after corporate customers first. This made sense nearly 20 years ago when the Internet was emerging. Only large corporations with large IT infrastructures would have the cash and desire to use new technology to increase revenues and improve margins.
It is obvious that RIM has failed to change with the times. Co-CEOs and Co-Chairmen, Messrs. Lazaridis and Balsillie are running the company into the ground. Despite their own admission they failed to meet market expectations, they insist they have everything under control and will remain in charge. It has been four years since the appearance of the iPhone and despite the obvious growth of the smartphone segment, RIM has failed to bring a new handset that brought media and gaming to the Blackberry.
Despite, the obvious growth of web surfing and media viewing by the very corporate customers RIM has been selling to, RIM failed to understand what was happening right in front of them. Four years, my gosh, what were they doing; playing ostrich and hiding their heads in the sand?
Do the shareholders of RIM really want these two guys running RIM? I certainly hope not.
The tragedy of this mess is that internally, the board of RIM is unsure of what to do and the current management has sworn to fight any changes in the company’s management structure. The management team exhibits all of the signs of a team in denial. The company exhibits all of the signs of a corporation that is clueless about what to do and instead of facing the truth, it is digging in.
Restructurings fail when management and the board fail to understand the trouble they are in and fail to take corrective action.
If the board of directors fails to make drastic changes to the top management and make changes to RIM’s product line, we will be looking at a company that will not be able to turn itself around.
Even if the board takes decisive corrective action, RIM does not even own the core intellectual property that people believe it controls; a company called NTP owns it. Has everyone forgotten the massive patent infringement litigation that resulted in RIM paying NTP over $600M? What I am saying is that RIM cannot even claim licensing revenue for wireless email, which all smartphones support. Talk about a lost revenue and valuation opportunity. Talk about mismanagement.
At this time, RIM is showing all of the sings of a company headed for disaster.
If the board believes it can find a buyer for RIM, think again because it will not be easy. Other than the brand name and the diminishing customer base, RIM has no strategic value and diminishing financial value.
It is time for the shareholders to take charge of this company. If the shareholders fail to act, we could be looking at another Canadian train wreck; anyone remember Nortel?