In case you had any doubt, RIMM is still truly dead…

In case you had any doubt, RIMM is still truly dead, as I have been  had the unfortunate job of predicting to much hatred and chagrin from  RIMM longs over the last couple years.  I don’t know what else to say.   I’ve been writing variations of this “RIMM is dead” theme for a year  (see RIMM Is Dead; now what? or 49 app stocks that should go up 1000% and one that won’t or RIMM is truly dead, for examples).

I also have a long history having been both long and short this stock  in years past, mostly long as it was on its tear back in the  mid-2000s.  Most recently we shorted the stock in the Revolution  Investing model portfolio back when it was above $70 (Revolution  Investing subscribers will remember the newsletter edition from April  2010 called Time to add some short hedges).

As far back as November 2009, I wrote an article called, “Three problems facing RIMM”.  I will reprint most of that here now because the tech, business and  stock analysis in the article focus on how the smartphone/app revolution  has passed Research in Motion by and are, quite frankly, completely  relevant still today.   RIMM might be researching in motion, but they  must be in reverse.  Bad pun, I know, but my mom will like it and it  makes the point that this company has completely lost touch with the  direction of the marketplace they once dominated. Here’s what I wrote in  that article:

November 16, 2009, 1:22 PM  ET
Three problems facing RIMM

I’m not sure I’d ever get long RIMM again, and I’ll give you three quick reasons why:

1. The Apps. It’s not about the number of apps.  It’s about how easy   it is to use the apps and how many apps actually bring value.

Apple’s got 100,000 apps plus, Android phones from Google’s vendors   have 10,000 apps plus and RIMM’s got a few thousand apps available for   Blackberry.  There are lots of technologies being created right now that   will make it ever easier for developers to adapt an app developed for   one platform, say the iPhone, and make it run almost identically on   another platform, say the Blackberry.  But that’s now what the real   issue is. It’s the ease of using those apps that’s key.  I mean, I have   some apps that I might use on my Verizon blackberry curve, but it’s  such  a pain to get to them, to get them running, to scroll that wheel  to get  me to the place I want to go.  And trying to watch Internet  video on my  Blackberry is like trying to get my dog to play guitar.   He’s better at  fetching than at strumming, and my Blackberry’s better  at emailing than  apps.

See, the Android apps will become ever easier to use as your Android   phones become ever more synched to your main computers which will  become  ever more synched to Google’s cloud and networks and  technologies.   Apple apps will become ever easier to use as the Apple  platforms and  integrations between your living room, your handset, your  office, and  your car and so on become ever more integrated with Apple  hardware and  software.  Blackberry?  You tried gaming on the Storm?   I’d rather play  pong.

Upshot is that there’s just so many more possible value-add apps that   come from the Android and Apple operating systems and form factors  than  from Blackberry’s gadgets.

2. The enterprise. That’s really where Blackberry built its dominance   — by taking over corporate mobile email.  And they owned it with 90%   marketshare initially.  But all that marketshare that Blackberry was had   is eroding and the rest is there for the taking.  I’m seeing an   increasing number of executives bring out their iPhones during meetings   and to tap out emails.  When the execs get their tech guys who are  still  running on the “you can’t get fired for using Blackberry”  mentality to  finally commit to letting the company employees choose  between the  iPhone and Blackberry, it’s gonna be a long down hill for  Blackberry’s  hold on the enterprise.

3. What’s Blackberry’s future market? If they can’t compete with the   best consumer phones when it comes to playability, form factor, and   general app usefulness, and if they can’t maintain their outsized   marketshare at the enterprise, Blackberry’s suddenly got an identity   crisis on its hands.


Cody here again, in present time, June 2011.  Throw in some  commentary about the Playbook and how the company just used the old  “Microsoft Kin has shipped HUGE (er…into distributors, but not so much  into end-users’ hands) and you’re basically got the analyst reports  you’re going to be reading from your friendly neighborhood Wall Street  analysts this morning.

I would note that I do expect RIMM’s gotten so “cheap” on a cash-flow  basis and on a enterprise value basis that it will potentially end up  being at least rumored as a target for private equity play.  Or it could  end up a target by HPQ or IBM or somebody.  The big question is how low  will she have to go before that kind of interest gets serious?