Research in Motion Thinking: “You’ve Got to be Kidding Me!”

Andrew Klips  |

Albeit an inherently flawed business model, technology shortcomings compared to peers or just bad luck, Research in Motion Ltd. (RIMM) simply can’t catch a break.  Only days after getting snubbed by Yahoo (YHOO) and on the day the Apple (AAPL) releases its vaunted iPhone 5, the embattled Blackberry maker suffered another black eye by saying that it is experiencing service problems in Europe, the Middle East and Africa.  The embarrassing news comes less than a year after handsets around the world were disabled because of a network outage.

The news hit the public through a tweet by BlackBerry UK and a public statement by Vodafone Group PLC Friday morning. "Blackberry/RIM have confirmed that they are experiencing issues with services such as BBM, email and Internet and that they are working to fix this," Vodafone (VOD) said on its U.K. website.  Vodafone also informed that it is not aware of the cause of the problem or an estimate fix time.

Once Canada’s tech darling, RIMM shares have been on a death spiral, falling from 2008 highs of nearly $150 per share to Thursday’s close of $6.91, as the company struggles to keep pace with competition and control its finances.

Shares of RIMM did get a spark on Tuesday when news of a licensing agreement between Microsoft (MSFT) and RIMM hit the wires.  The problem was that as it wasn’t Microsoft licensing technology from Research in Motion; it was the other way around.  Shares are still up on the week heading into Friday, but fell from highs as investors digested the news of the deal.

On September 17, Yahoo’s new CEO Marissa Mayer sent emails to employees announcing that they can get new smartphones and the company will foot the bill for the phone, voice and data plans.  The acceptable choices included the iPhone, Samsung Galaxy S3, HTC Evo 4G LTE, and Nokia Lumia 920, but not a Blackberry.

Research in Motion holds what may be their final fate in their own hands with their Blackberry 10 handsets.  It was back in May that the company gave prototypes to developers that had some cutting-edge features, but the product is still not ready for launch.  RIM is shooting for the product to be introduced early in 2013.  When finally commercialized, the phones are going to need something substantial to perk consumer interest as they could face substantial headwinds from competitors that beat them to market with similar features.

Blackberry operating systems once dominated the smartphone space, but have been steadily losing traction.  According to research firm IDC in a report this week, Android and Apple systems controlled 85 percent of the market in the second quarter.  Blackberry tumbled to only 4.8 percent; down from 11.5 percent during the same period a year prior.

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