UPDATED 15:55 EST / DECEMBER 19 2011

BlackBerry Downfall: Will RIM Survive 2012?

The sky’s gotten even darker for RIM. The BlackBerry manufacturer is accumulating bad news and sinking even further in the stock market. After the network failure that affected global users for several days and the lost trial over the BBX brand, the Canadian company must revise its forecast moving forward.

RIM was hoping to regain its lost foothold in the smartphone market with a new, redesigned generation of BlackBerries, but with a delayed launch set for some time next year, the phone maker only gives more ground to Apple and Android devices.

If you ask RIM, the delay stems from the interest of responsiveness and autonomy of smartphones. The manufacturer wants to improve with the arrival of new processors. Therefore, their Playbook tablets must also wait until the second half of next year for a makeover.

The company anticipates that it will sell only 11-12 million BlackBerrys, an enormous decrease in sales as compared to the previous year.  RIM has revised its outlook for sales in the Christmas quarter, down from the 14.8 million last year to between 11 and 12 million this year.

The delay has led to a further fall in market share, leading some analysts to question the sustainability of RIM.  Some investors are pushing for RIM to sell its hardware business, and opening its secure blackberry network to rival smartphones providers.

But RIM may be too late for even that.  The popularity of the iPhone and Android devices, as well as problems that have plagued RIM devices in recent months, leaves RIM with low sales and nearly no profits from BlackBerry sales at all.

Just before RIM’s latest numbers were released, activist shareholder Jaguar Financial shared its thoughts on where RIM should head next.  “Jaguar believes that the road map to value restoration lies in a sale of RIM whether as a whole or in separate parts,” writes Reuters.

“If they want to maintain that asset, if not stabilize or grow it, they need to open it up to the other platforms and look at themselves as an enterprise software company,” said ThinkEquity analyst Mark McKechnie.

The network, the only example of this kind between the mobile device manufacturers, has always been one of the pillars of growth of the BlackBerry.  E-mail and instant messages are routed through the server and data canter of the company, which is then encoded and sent to the recipients. This is a totally secure system, which prevents the control of the content, so that many conservative governments have threatened to block services if they had not had a chance to control the communications of the BlackBerry.

Losing ground in network services, too

For this reason, the BlackBerry is a must for business people from around the world who consider the device a tool among the safest for sensitive business communications. If fact, in figures, the BlackBerry seems to be in steep decline (the next quarter sales are expected to decline by 26%). The decrement is not so for the network business, which would be able to generate stronger margins and recurring revenue.

Alternative network providers that offer many of the same security features as the BlackBerry enterprise network are already making inroads.

“The risk in waiting is that as more companies switch over to alternatives, it will be difficult to attract them back to BlackBerry even as a network-only business,” said Mike Abramsky, an analyst at RBC Capital Markets. Companies like SAP, Sybase, and Good Technology are managing encrypted data for iPhones and other devices.

Apple App Store is at Higher Market Value than all RIM

The app store from Apple is currently worth more than the ailing BlackBerry maker Research In Motion. The value was calculated by market analyst Brian S. Hall based on the closing price of the shares of RIM ($13.44) on the New York Stock Exchange Friday.

Apple, according to the current market capitalization price would be around $354 billion and two percent of the Apple’s revenue comes from App store, which once calculated is coming out to be about $7.08 billion. Going by RIM current share price, RIM is worth $7.04 billion.

PlayBook is Available as Same Price as Kindle Fire

Blackberry sales and lower forecast are not the only problems for RIM. Even PlayBook sales have been a disappointment, causing RIM to offer massive discounts and enter in the accounts of pre-tax charges of $485 million.

And the PlayBook price has been further dropped in a last ditch effort to revive its sales during this holiday season. RIM’s retail partners Best Buy, Staples and Office Depot are selling 16GB PlayBook model at $199, the same price as Amazon’s Kindle Fire tablets, which have little trouble in the sales and marketing divisions..


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