Help from an (un)expected quarter for RIM Blackberry

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The Canadian flag flown at Research In Motion Ltd. headquarters in Waterloo, Ontario. Photo - Norm Betts/Bloomberg News

It sounded like a break-up letter. Dear BlackBerry. Were through it! wrote popular Internet gossip columnist Perez Hilton when Blackberry services were hit due to a massive glitch in the system last october. Perez was not alone. The three day outage of Blackberry services caused much fury against Research in Motion, the company which makes Blackberry devices.

The outages not only cost Blackberry users money, they lost business too since many relied onBlackberry for their business emails.

Instead of a quick response, RIM notoriously delayed admitting that they were facing issues on an unprecedented scale and when they expect to resolve them.

Ive been a pretty big BlackBerry advocate, said Kate Jacobson, a student at Michigan State University. But Im done playing these games.”

In 2009, there was a major outage but then RIM was on top of things and faced little impact. However, things have gone downhill for RIM and its crowned Blackberry services.

PLAYBOOK PALSY

While Apple launched iPad in 2010, RIM took a whole year to come up with Playbook. That is a long time in the world of technology and many reviewers said it was not worth the wait.

Since its release, sales have been poor, workers have been laid off & and RIMs stock price has plunged.

RIM was able to sell just 150,000 PlayBook tablets in the third quarter of 2011, while its competitor Apple sold more than 11 million iPads.

Playbook inventory has been growing at stores and in RIM’s warehouse, due to which it announced last week there would be a $485 million pre-tax writedown on the value of unsold BlackBerry PlayBooks, resulting in the company missing its revised profit targets for 2012.

RIM’s share prices have fallen by more than 70 per cent this year and is currently trading at $16.85 on the New York Stock Exchange.

There has been speculation that RIM might be a takeover target. But, considering the situation that RIM is facing today, prospective companies, if at all any, would be looking further for the share prices to drop before snapping a deal.

DIVINE SUPPORT

However, Canadian Minister of Industry Christian Paradis told Reuters in an interview last week RIM is a “Canadian Jewel” and they have to support it.

It is not clear if the Canadian government would block any attemptedforeigntakeover of the company, as it did in 2010 when a proposed purchase of Potash Corp of Saskatchewan by Australian mining company BHP Billiton was blocked for not yielding a “net benefit” for Canada.

Sources: Reuters, Yahoo News, International Business Times, LesPlan, Research in Motion

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