Can Research in Motion (RIMM) Pull Out of Tailspin?

Once king of the smartphone, BlackBerry has lost its juice

   

Google Inc. (NASDAQ: GOOG) and its Android smartphone operating system are ascendant. Apple Inc. (NASDAQ: AAPL) and its iPhone are currently dominant. And Research in Motion (NASDAQ: RIMM)? The best word is probably “stagnant. “

While the world obsesses over all things smartphone, it’s hard not to wonder what has become of Research in Motion. The BlackBerry was the very first smartphone to offer wireless email support, turning eight-years-old this fall. But after less than a decade, the BlackBerry brand is starting to feel stale.

Research in Motion is trying to change that, of course. RIMM began shipping the BlackBerry Torch, also called the BlackBerry Bold 9800, last month. It was the first to run the company’s new operating system, BlackBerry 6. The device shows a decent amount of forward thinking on RIM’s part, a new form factor that, while not as sleek as Apple’s iPhone 4, is as appealing as many Android phones. It has a nice QWERTY keyboard and apparently its sound and voice quality is top notch.

There is, however, no one thing about the device or the new BlackBerry 6 operating system that will help distinguish it from the Droid X or iPhone 4. There no hot new business application that will encourage corporate adoption — Research in Motion’s one-time stronghold — nor is their one to really pique consumer interest and court Android or iPhone fans. While there was significant hype surrounding the machine at the beginning of the summer, its release has come and gone without much fanfare.

Share prices are hurting as a result of that consumer and corporate indifference. RIM is trading at around $44 per share today where a year ago the company was hovering around $86 per share. A nearly -50% decline and massive competitor growth in the same time frame is none too promising to shareholders who are undoubtedly wondering when the time is right to jump ship.

Of course, it’s worth noting that the attitude on Wall Street doesn’t necessarily wash with RIMM profits. Though the stock trades at its lowest level since April 2009,  Research In Motion has averaged sales and earnings growth of more than 60% per year over the last five years, according to data from FactSet Research.

So what can RIM do to drag themselves out of this spiral, at least among investors who think the lack of compelling products means certain doom?

Apps are one future for the company. A series of recent acquisitions seem to indicate that Research in Motion is building towards redefining their smartphone business as broader than the BlackBerry. This week it came out the company has taken control of DataViz, the makers of Documents to Go, a popular mobile office suite not dissimilar to Microsoft (NASDAQ: MSFT) Office. Download to Go is currently available on the iPhone, iPad and any number of Android powered devices.

Research in Motion also recently snapped up Cellmania, known for their mobile application store software. Between the two, it almost looks like Research in Motion is going to start up their own cross platform app store, potentially offering BlackBerry branded office program suites and other goodies.

Also on the horizon is Research in Motion’s rumored iPad competitor, the Blackpad. The rumored tablet has dropped out of the news since it failed to debut this past August. The most recent rumblings, a report published in Bloomberg three weeks ago, indicated that the tablet wouldn’t be running on RIM’s new operating system, but the QNX operating system found in BMWs . Why? Most likely so it has access to a suite of already available apps at launch.

Will RIM try to relaunch QNX as an Android competitor? Will RIM continue to drown as its competitors thrive? Time will tell. But as of right now, things don’t look good for the one-time smartphone champ.

As of this writing, Anthony Agnello did not own a position in any of the stocks named here.

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Article printed from InvestorPlace Media, http://investorplace.com/2010/09/research-motion-rimm-pull-out-tailspin/.

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