Investors have been abandoning BlackBerry maker Research in Motion Ltd. (RIM) in droves, losing more than 20 percent on Friday. The losses continued on Monday, although this time in the personnel department. This morning RIM announced the departure of another senior marketing executive. RIM has been struggling with product transition and diversity, a factor that in a tough and constantly shifting market, can result in profit losses and steep declines in share prices. Perhaps discouraged by the prolonged descent and weak future prospects, Brian Wallace, RIM's vice president of digital marketing and media, has left the company and taken a position with Samsung Telecommunications America. Samsung confirmed the decision today while RIM representatives and Brian Wallace were unavailable for comment.
The Ontario-based RIM has been steadily losing market share in the U.S. as its Blackberry, once the innovative gold standard of smartphones, is run out of town by Apple’s (AAPL) sleeker iPhone. The bevy of new apps being released on Apple’s platform are looking more appealing to the average consumer. Google’s (GOOG) Android platform, which runs on such devices as Samsung’s popular Galaxy, has also grown progressively in popularity, pushing Blackberry behind both in marketshare. The result has pushed RIM shares to their lowest levels in five-years.
While some analysts had argued that RIM shares would push higher following their weakness and encouraged investors to buy on the dip, last week’s second-quarter guidance indicated the company does not have the resources to bounce back. They will begin cutting staff according to the report. Earlier this year, chief Marketing director Keith Pardy left the company following the release of the disappointing PlayBook tablet which failed to garner any major buzz. The VP of creativity, Paul Kalbflesich also left, as did one of the company’s chief operating officers Don Morrison. Morrison is expected to return after medical leave.
Given the number of challenges facing RIM right now, many are wondering what capacity they have react to one of the major issues consuming major tech companies right now. RIM's participation in a the bidding war over LTE patents from Nortel, is unclear though closely observed. In spite of weakness, Mike Lazaridis, the companies CEO, is thought to be considering a play for the patents which are also being vied for by Google (GOOG), Apple (AAPL) and Intel (INTC), Ericsson AB (ERIC) and RPX Corp (RPXC). Intel is reportedly driven by an interest in creating more chips from smart-phones while RPX Corp. buys patents in order to bar other tech companies from using them in their product development.
Google’s bid for the 6,000 patents began at $900 million, a number that is expected to rise sharply as the other companies look to acquire the patents for the bankrupt telecom company. Google already received the go-ahead from the U.S. government who dismissed anti-trust concerns surrounding the bid. In spite of this share prices for Google, which appears to be the natural leader in the tech patents are down, as are those for its competitors with the exception of Intel. The auction has been delayed until June 27th on the basis of high-interest in the patents, which include elements of social networking and Wi-Fi.
Much of the activity in the market today has more to do with the upcoming second-quarter earnings reports than it does with any other tech news today. Adobe Systems (ADBE) rose considerably as a result of investor optimism surrounding the companies quarterly results, which are expected to be released Tuesday at market close. Netgear Inc. (NTGR) was also up following Deutsche Bank analyst Jonathan Goldberg's decision to increase the bank's rating on the small-business networking equipment maker to buy. Goldberg also raised their price target from $37 to $45. If Goldberg had the magic touch for Netgear today, he has the opposite impact on wireless chip maker Skyworks Solutions Inc. (SWKS). The company fell sharply after he downgraded it to a hold from a buy on the basis of lost business with Apple Inc.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer