A Brief History of Research In Motion

by Brad Moon | January 29, 2013 8:00 am

Living, as I do, just a short hop from Research In Motion’s (NASDAQ:RIMM[1]) Waterloo, Ontario, headquarters, the excitement around here about the pending BlackBerry 10 launch[2] is palpable. The rise and fall of RIM has meant a lot to the region.

So, while investors worldwide watch anxiously to see whether the company’s stock continues gathering steam after Wednesday’s BB10 debut, people around here are watching to see if BB10 means a resurgent (or at least viable) RIM. Or will it be the final chapter in a Canadian tech giant’s long decline?

For those who are wondering what the fuss is about, here’s a brief history of RIM and the BlackBerry, including the triumphs, misreading of tech trends and the company’s struggles — first to retain its leadership, then simply to stay alive.

1984: Origins

• The company is founded in Waterloo by a pair of Canadian engineering students: Mike Lazaridis from the University of Waterloo and Douglas Fregin from the University of Windsor. Focus is on wireless technology, including point-of-sale terminals, wireless modems and pagers. Jim Balsillie joins the company in 1992.

1997: Initial Public Offering

• RIMM goes public with a TSE listing, raises $115 million in IPO.

1998: First BlackBerry Device

• RIM 850 the initial BlackBerry device is released with e-mail and paging (no voice).

1999

• RIMM is listed on Nasdaq.

2002

• BlackBerry-branded 5810 released, with both voice and data support.
• Stock in doldrums, dips as low $1.57.

2003: Smartphones Begin Gaining Steam

• RIM launches new BlackBerrys targeting professional consumer market, along with color-display models.
• BlackBerry platform FIPS 140-2 security certified, making BlackBerry ideal for government applications and boosting corporate adoption.

2004

• BlackBerry surpasses 2 million subscribers globally.
• Balsille and Lazaridis named to Time magazine’s “Time 100” list.
• November 2004, stock surges to $29.66.

2006

• BlackBerry surpasses 5 million subscribers globally.

2007

• RIMM hits $124.51, and with market cap of $67.35 billion RIM becomes Canada’s most valuable company[3].
• June, Apple (NASDAQ:AAPL[4]) releases original iPhone.
• Jim Balsillie on the iPhone[5]: “It’s kind of one more entrant into an already very busy space with lots of choice for consumers…. But in terms of a sort of a sea-change for BlackBerry, I would think that’s overstating it.”

2008: RIMM Focuses on Enterprise Over Consumer

• Stock passes $138 for historical high in May.
• BlackBerry hits 19.5% worldwide smartphone market share to iPhone’s 10.7%.
• October, first Android-powered smartphone is released.
• Mike Lazaridis on touchscreen phones:[6] “The most exciting mobile trend is full Qwerty keyboards. I’m sorry, it really is. I’m not making this up.”
• Reacting to iPhone popularity, RIM releases its first touchscreen phone, the BlackBerry Storm in November. It’s not a hit with customers.
• RIM gets a PR boost with election of President Barack Obama, a dedicated (and public) BlackBerry user.

2009: The Pinnacle of BlackBerry

• BlackBerry hits 20.7% worldwide smartphone market share in Q3. iPhone is at 17.1% and Android at 3.5%.

2010: Android and iOS Take the Lead

• RIM buys QNX Software to provide basis for a new, modern BlackBerry operating system.
• BlackBerry drops to 14.8% worldwide smartphone market share in Q3. iPhone is at 16.7%, and Android surges to 25.5%.
• Jim Balsillie on the upcoming BlackBerry PlayBook tablet[7]: “I think the PlayBook redefines what a tablet should do.”

2011: BlackBerry Falls Behind Amid Delays

• February 2011, stock at $66.20, and it’s all downhill from there.
• April, RIM releases PlayBook tablet to so-so reviews and poor sales.
• Jim Balsillie failing to inspire confidence[8] about RIM’s plans: “No other technology company other than Apple has successfully transitioned their platform. It’s almost never done, and it’s way harder than you realize. This transition is where tech companies go to die.”
• July, 10% of RIM workforce (2,000 workers) laid off.
• BlackBerry world market share at 11.5%.
• October, major outage takes out millions of European[9], Middle Eastern and African BlackBerry users for two days.
• December, Balsillie and Lazaridis announce new BlackBerry phones will be delayed until late 2012.
• Q4 BlackBerry drops to 8.8% worldwide smartphone market share. iPhone is at 23.8%, and Android leads with 50.9%.
• Stock closes out December at $14.50.

2012: Dark Days in Waterloo, But Hope Appears

• January, Balsillie and Lazaridis out as co-CEOs, Thorsten Heins becomes new RIM CEO.
• June, company reports first net loss in eight years, lays off 5,000 employees and Heins announces new BlackBerry phones are delayed until late early 2013. Stock drops below $10 for first time since 2003, while market cap dips under $5 billion.
• BlackBerry phones remain generations behind the competition with 640 x 480 displays and slow CPUs. RIM’s only release of note is a $2,000 Porsche Design model[10] — still sporting 2010-era hardware specs.
• September, stock hits low of $6.30.
• Q3 BlackBerry drops to 5.3 % worldwide smartphone market share. iPhone is at 13.9%, and Android pulls away with 72.4%.
• U.S. government agencies increasingly dropping BlackBerry[11].
• October, stock rally begins as BB10 launch date revealed, new handsets teased, media campaign starts.
• December, BlackBerry U.S. market share slips to 1.1%.

2013: Do or Die

• BlackBerry App World relaunched as BlackBerry World[12], includes multimedia content to compete with iTunes, Google Play and Amazon (NASDAQ:AMZN[13]).
• RIM announces a BB10 Superbowl commercial[14] (perhaps trying to draw inspiration from Apple’s legendary 1984 Superbowl ad).
• RIM stock was at $16.18 at Monday’s close (down nearly 8% in the day’s trading), giving it a market cap of $8.3 billion. The company just announced news of new music and movie partners for BlackBerry World.

RIM’s new BB10 smartphones launch Jan. 30. They’re already garnering good buzz and from what I’ve seen, they have the looks to take on the best[15]. Will the BlackBerry platform recover and hold onto a solid third place in the smartphone wars, holding off Microsoft’s (NASDAQ:MSFT[16]) Windows Phone 8? We’ll have a good idea in a few months. If the new BlackBerrys do well, RIMM shares may well have room for more growth in 2013.

If not, well, it has some patents it could sell off[17] to stay alive for a while, and someone like Lenovo (PINK:LNVGY[18]) might be interested in buying bits of the company[19]. And that truly would be the final chapter for RIM.

 As of this writing, Brad Moon didn’t own any securities mentioned here.

Source URL: https://investorplace.com/2013/01/a-brief-history-of-research-in-motion/

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