September 3, 2010 | In: Technology

RIP RIM?

I just sold my RY stocks and I was looking at TSE stocks to buy, and I was thinking, how about RIM (RIM is the TSE stock symbol of the company, RIMM is the NASDAQ symbol)?

The stock seems attractive at this price (closed today at CDN $46.50), and I might make a bit of money short term, but I think that the stock will continue its downward trend until the following things happen:

- RIM (the company) is no longer arrogant, and is willing to immediately accommodate requests from official bodies (such as countries).
- RIM’s new and innovative products are not copycats of Apple (the Blackberry torch is a great example)

See I think what RIM should worry about for the short term is its attitude and arrogance. If RIM kept a low profile during the negotiations with the governments, then RIM would have still been strong. But they have decided to make this fight (that they can never ever win) public, and worse, the world knew that eventually they lost, and they will have to accommodate the requests to grant access to the users’ data. Had they kept a low profile, then they would have the done the same (accommodated the requests), and nobody would have known, except for key people.

Well now that the whole world knows that the users’ data might be exposed to certain governments, companies no longer see the advantage of giving blackberries to their employees. A fatal mistake that made RIM lose its most important niche, the corporate world.

Now for the long term, the problem is even worse, RIM is now a company with no innovation. They have tried to copy the iPhone 4 with their Blackberry Torch, unsuccessfully. They are releasing an iPad copycat called the BlackPad. Not only do RIM have a problem with innovation, they also have a problem with their marketing team. They couldn’t even come up with an original name for their iPad clone.

For all those who are saying that RIM is the next Palm, I agree… There is still time to save RIM from this fate though, but it’s going to take a lot of hard work, more humility, and a lot of innovation, the same innovation that created the blackberry in the first place. If not, expect the stock to trade in the low 30′s next year (RIMM almost touched $42 on August 31st).

On the very flip side, the stock is currently trading at less than 10 EPS, which makes RIM an easy target for a buyout (and it’s currently the season, apparently). Note that there are some rumors that Microsoft might be interested in buying RIM.

4 Responses to RIP RIM?

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Google, not Apple, is RIM’s Main Competitor « Fadi El-Eter

October 28th, 2010 at 11:49 pm

[...] RIM has to understand that if does not collaborate with other companies (especially Google) it may be reduced to another Palm. Here’s what RIM should do in order to survive in the [...]

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An Analysis of Mobile Phone Stocks from Another Perspective « Fadi El-Eter

January 1st, 2011 at 3:11 am

[...] RIMM may be a good investment, but only for next year (at least for now); this stock is plagued by many issues which makes it a sort of an uncertain investment. I do think that the stock has the potential of [...]

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Is the P/E Ratio Relevant? « Fadi El-Eter

May 2nd, 2011 at 2:49 pm

[...] Not to mention, of course, that investors are skeptical of its products. I’ve said it before, RIM is no longer innovative, and, so when it regains the innovation momentum, and it demonstrates some humility, then expect [...]

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Will RIM Go Bankrupt? « Fadi El-Eter

May 22nd, 2011 at 11:50 pm

[...] the above, RIMM is stuck in a bearish hell since the beginning of March, after recovering from a near imminent death back in September. With a P/E of only 6.85 and an excellent worldwide reputation, one has to [...]

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