Research In Motion
Innovation can be a tricky thing. One day you have it, and the next day you don’t. That seems to be the case with Research in Motion (NASDAQ:RIMM). The company revolutionized smartphones with its BlackBerry’s e-mail optimization, but it has floundered in the face of stiff competition from Apple and Google‘s (NASDAQ:GOOG) Android. If you stop innovating, you risk complete collapse. Palm, which was bought out by Hewlett-Packard (NYSE:HPQ) is an example of how quickly things can go sour when you stand still.
Apple beat RIM to the next-thing punch with touchscreens and systems fueled by applications. Once it recognized the threat, RIM was forced to the role of imitator instead of innovator, and that’s where it has remained for years. If RIM simply keeps trying to leverage its customer base with imitation, the company will fail or be purchased by a larger player. What might work better for shareholders is a Hail Mary.
What does RIM have to lose? Why not blow up the BlackBerry and launch something altogether different? It’s a risk, but it could help the company regain its footing. Unfortunately, more and more companies view change and risk like the plague. I’m not optimistic Research In Motion will go deep anytime soon. As such, RIM’s likely final destination won’t be pretty for shareholders.
The king of software, Microsoft (NASDAQ:MSFT), had the world in its hands. By the mid-1990s the company ruled the world of operating systems, but it has since squandered its position in the technology world with missed opportunities. Instead, it did what any monopolistic company tends to do: It milked what it had and hoarded cash.
Microsoft hasn’t been associated with innovation in more than a decade. Even when it joined the video game foray, its consoles merely kept pace with the competition — though, to its credit, Microsoft impressed with its Kinect motion-sensing technology. But other than that, imitation. Internet Explorer? Netscape. Bing? Google.
Fortunately for Microsoft, the domination of its operating system allows the company to survive despite its middling results in its other endeavors. But the stock price has been stuck in the mud. Microsoft still has time to revitalize its name. Perhaps through the Xbox 360’s teaming with cable companies? Time will tell. But the only way Microsoft is going to remain relevant is to stop treading water and start moving forward.
As of this writing, Jamie Dlugosch did not own any a position in any of the aforementioned stocks.