SAN FRANCISCO (MarketWatch) — The long, slow death spiral for Research In Motion Ltd. has begun.
It may take awhile, but RIM /quotes/zigman/18534/quotes/nls/rimm RIMM -2.75% seems to be clearly headed in the same direction as Palm Inc., towards eventual extinction, unless its board of directors does something soon to change its direction.
At this point, it seems that would have to entail getting rid of one or both of its co-chief executives, Jim Balsillie and Mike Lazaridis. These leaders dilly dallied while the iPhone changed the face of the smartphone market, and now may have squandered any hopes for a rebound with the launch of a new operating system for a next generation of devices they have called “superphones.â€
Those “superphones†may not look so super when they finally hit the market in the latter part of 2012. At that point, they will be going up squarely against an inevitable iPhone 5 from Apple Inc. /quotes/zigman/68270/quotes/nls/aapl AAPL +3.27% and likely a slew of new phones using Google’s /quotes/zigman/93888/quotes/nls/goog GOOG +1.57% Android platform. At that point, analysts concede that even Microsoft /quotes/zigman/20493/quotes/nls/msft MSFT +2.06% may be in a better position.
“Yes, even Windows Phone should now be a concern for RIM,†Brian Modoff of Deutsche Bank wrote in a note to clients last week after another dismal earnings report from the BlackBerry maker.
Read full report on RIM's results.
In the earnings call last week, Balsillie and Lazaridis pushed back new smartphones designed on its next-generation BlackBerry 10 software until the latter half of 2012. They based the move on the desire to incorporate a more power-friendly chipset that will work on faster LTE networks.
“In the meantime, a lot of super smartphones with poor battery life will be sold by other brands,†said Matthew Robison, an analyst with Wunderlich Securities, in a note. “We find it surprising that management has chosen to delay a competitive entry.â€
Modoff of Deutsche Bank said that the delay will create a huge opportunity for the competition. Many other analysts were likewise surprised for the rationale behind the move, as the first BlackBerry 10 devices were expected to come on the market in the early part of the year.
“We know that U.S. carriers are asking smartphone vendors to have LTE in their devices, and RIM is likely responding to that,†said Tim Long of BMO Capital Markets in a note. “However, we estimate that in the November quarter, about 20% of RIM’s units were sold in the US.†He added that the other 80% of RIM’s phones were sold to markets where LTE will not be meaningful next year or even in 2013.
