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Research In Motion: Dead Company Walking

Research In Motion: Dead Company Walking

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Published by Emdhie Donoso

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Published by: Emdhie Donoso on Jul 27, 2012
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05/13/2014

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Research In Motion is in dire straits, and it only has itself to blame.

Once the king of the smartphone hill, it is now mired in financial woes that don’t seem to be ending anytime soon. Day after day, more and more people are selling used BlackBerrys and making the switch to the competition’s smartphones, all because RIM rested on its laurels when it should have continued to innovate despite the company already being at the top. Apple’s entry into the smartphone fray half a decade ago effectively ended RIM’s previously unchallenged run, and Apple hasn’t looked back since. Things seemed to be turning around for RIM at May’s BlackBerry World 2012 convention, though, with the unveiling of their BlackBerry 10 mobile operating system. RIM CEO, Thorsten Heins, has gone on record time and again claiming that the company had pulled out all the stops to make sure that the BB 10 would be the product to save them; and the OS definitely showed that possibility at the event, wowing the crowd with its myriad features that seemed to put it, and RIM, back in the game. Unfortunately for RIM, Apple presented the iOS 6 not a month later at the World Wide Developers Convention 2012. While RIM’s OS showed that the company could still play ball, Apple’s changed the game altogether. The company’s penchant for innovation went the extra mile this time, expanding its portable gadgets’ functionalities beyond their physical limitations (Siri, anyone?), and thereby giving consumers one more reason to trade in BlackBerrys for iPhones. As a result, Research In Motion is now backed into a corner and forced to consider last resort split-and-merger options just to try and keep itself afloat. While plans for the merger were already on the backburner last May when RIM hired bankers JP Morgan and RBC to help them come up with financial strategy alternatives, it was only after Apple’s show stopping WWDC that RIM’s plans became an imperative. The two frontrunners for the merger deal are Amazon and Facebook. While both companies could stand to gain something from the deal, each also has its own impediment which could delay (or outright cancel) the merger.

Amazon started as an online bookstore, but soon diversified, selling laptops, electronics, DVDs, CDs, MP3 downloads, software, video games, apparel, furniture, food, toys, and jewelry and now it is looking to acquire RIM’s handset division to develop a smartphone that would follow up on the Kindle Fire tablet. Interestingly though, the company isn’t prioritizing selling their BlackBerry handsets (or whatever it is Amazon wants to call them) at a markup. Instead, the company is interested in using BlackBerry as a channel for their mobile commerce venture, having already accrued detailed online customer contacts and tendency analytics to make such an endeavor viable. Nevertheless, Amazon already has such a system set up with Android, and setting up another one on a vastly different OS (the BB 10 is based on the QNX platform) could just be a hassle for the company. On the other hand, Facebook is actually planning on a business expansion by breaking into the smartphone market, and acquiring BlackBerry could instantly make the company a force to be reckoned with. However, the company is also currently facing (no pun intended) its own financial problems; and although they’re nowhere as dire as RIM’s, they could still make the merger deal a second priority for Facebook. Whatever happens, it’s clear that Research In Motion needs to make a move sooner than later. Industry pundits are speculating that the company could meet its demise by 2013, and RIM needs to do everything it can to see that this does not happen.

Source: http://emdhie.blog.com/2012/07/27/research-in-motion-dead-company-walking/

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