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Smartphone Pioneer 'Research in Motion' Has Lost the Connection

May 12, 2011 | About:
1725896022.jpgPalm trees, pools and cocktails. Under the blazing sun in Florida is no place for pessimists. Despite profit warnings and sluggish sales of the new Tablet PCs "Playbook," the Blackberry maker Research in Motion (RIM) reports only victory and optimism.

Founder Mike Lazaridis and his co-CEO Jim Balsillie still recognized that they are ramming straight into an iceberg. The smartphone business is today more than a business with pretty mobile phones and funny ringtones. The success is based on complex platforms, hardware, software and internet services that deliver valuable content. In this area, RIM is not without success but has even less success than Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG). That's enough to perish. Analysts expect that the industry will be dominated by only three big players within the next five years. This could be Google, the duo Microsoft (NASDAQ:MSFT) and Nokia (NYSE:NOK) and finally Apple.

In Orlando, Lazaridis talked from its new strategy in broad terms: The Blackberry network should be open for competing products like the iPhone or Google's Android-smartphones. The operating system of RIM will be updated simultaneously from the ground. Finally, they have a close cooperation with Microsoft. The search engine and map services from Redmond should be integrated into Blackberry's system.

It's an overdue decision because the growth rates of new clients for Blackberry services have stagnated. For investors, this strategy looks like an extremely risky operation with a huge potential of customer losses. The Microsoft cooperation is a massive attack against Google. Above all, it could be an elegant chance to solve the company’s biggest problem: the lack in the variety of phone models. RIM is a one-product company and has huge internal deficits in design, development and technology in comparison to Apple, Samsung or HTC.

The initiated steps are correct and consistent. Perhaps, they are too late to stop the threatening downward trend of the company. We will see if there is a happy ending for the company.

Rating: 2.2/5 (24 votes)


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