Author: Mike Anderson Date: December 14, 2012
Topic: Mobile Research Note Number: 2012-34
Issues: What are the technologies and architectures that make up a mobile ecosystem?
Who are the vendors that are battling to lead the mobile computing revolution?
Summary: Research In Motion has fallen victim to fundamental shifts in the mobile landscape. Here we answer some client questions regarding RIM’s uncertain future.
BlackBerry was once the only mobile device with a great user experience, approval and support from IT organizations and a secure email service that could effectively address enterprise needs. That is no longer the case, and while some users remain committed to the BlackBerry, most are flocking to new touchscreen devices, and IT is finding ways to manage them for the business. The resulting severe impact on RIM’s core business, market share, and finances has raised considerable concern and uncertainty about the future of RIM and BlackBerry. This research note answers some of the top questions from clients.
Why is exit planning needed?
Planning an exit strategy as part of the vendor management process is a valuable exercise with any investment. Preparing for a catastrophic change that can anticipate consequences to our business can help avoid increased costs and business disruptions.
RIM was unprepared for the consumer-driven movement to touchscreen smartphones. That transition put RIM in jeopardy, and sent its market share plummeting. Losses in each of RIM’s three most recent financial quarters, major failures of its secure email service, and multiple delays of its next-generation operating system have shattered confidence.
RIM itself has undertaken a strategic review of its business to “explore its options” and consider “all scenarios,” underscoring the importance of contingency planning. That RIM has hired two banks (J.P. Morgan Securities LLC and RBC Capital Markets) to help with this process has added to concerns regarding splitting up the company. Although such a possibility cannot be ruled out, we RIM has remained committed to its new product strategy. Evaluating how long RIM can continue, the opportunities to optimize the use of its resources, and the potential to use licensing agreements to greatest benefit are all part of these evaluations.
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