The Philippine Online Chronicles

When news came out that Research in Motion (RIM) -- the company behind Blackberry phones and services lost a billion dollars last quarter and the subsequent fall in its stock price, I wrote a piece called, “Why you should let go of Blackberry”. In it, I gave unsolicited advice to my clients and anyone willing to listen that they should transition away from Blackberry, and soon.

In the month since that piece, RIM did three things. First, Blackberry service in many parts of the world failed. So horribly that users at the time of this writing are threatening a class action suit against the company. Second, RIM announced that they are updating the Blackberry Playbook -- in 2012, but without BBM. Third, the company announced new phones, but as pundit John Gruber points out -- the Porsche Design P99981 Blackberry priced at US$2,000 is “Easily the best-designed new phone of 2005”.

RIM is bleeding cash. On top of that, its market capitalization has fallen 3 billion since September, closing today at US$11.15-billion. It has lackluster product pipeline. The phones RIM announced this year is essentially the same phone that came out last year, albeit, different model numbers. Even Nokia came up with better phones in 2011 than RIM.

In the Philippines, Blackberries have penetrated the market. Almost every company has gotten their people on Blackberries. Email on the go, as well as BBM are the top draws. So there is brand recognition, and there is that following. This despite of the difficult user interface. Blackberries were successful primarily because of aggressive marketing, and aggressive pricing.

There are alternatives in the marketplace. Smart’s Smartnet, and Netphone platform offers both— aggressive pricing, aggressive marketing. Then there is HTC, and if Globe Telecom ever gets its act together, it could potentially push the same for iPhone.

On the technology side, the suggestion that companies and people begin laying down plans to migrate off Blackberries is driven by two things. The fact the company is leaking money, may suggest bankruptcy is in its future. The fact that Research in Motion has no product pipeline that is equally inspiring to get more sales is troubling. Its playbook has had mixed reviews, but the market doesn’t seem to be interested in it. It is still largely an iPad market.

At US$11-billion, RIM is still too expensive for an acquisition unless its patent portfolio is staggering, which is doubtful. So it cannot be sold. Yet.

Is there hope for the company?

Apple was the best turnaround story in recent history, so yes, it can be done. Nokia seems to be turning its fortunes around by partnering with Microsoft, although only time will tell whether or not that move will be successful.

Current indicators suggest that yes a turnaround may still occur, but sales will determine success. Then again, the mobile phone business is a tough one, with Motorola Mobility— a company that Google recently bought, missing revenue.

If Research in Motion fails to stop its bleeding cash position, and increase its sales in the next six months, it could be game over for the company. It will go the way of Palm, a footnote in history. Research in Motion’s resurgence is complicated by clueless leadership, and demoralized engineers. Wouldn’t it be easier to say, game over? RIP Blackberry. Seriously.

Photo credit: Courtesy Research in Motion