Research In Motion (NASDAQ:RIMM) was up just over 1% on Monday afternoon, to $17, but down almost 76% from the company’s 52-week high. The beleaguered BlackBerry manufacturer recently saw a leadership change that put Thorsten Heins in charge, but Heins’ out-of-the-gate missteps did little to calm investor worries. Former CEO Mike Lazaridis announced Friday that he plans to purchase $50 million in additional stock as a sign of confidence in the company. He appears to be the only one feeling confident. This week’s trading began under a New York Times headline declaring “BlackBerry Under Siege in Europe.”
RIM’s supposed assailant in Europe is Samsung (PINK:SSNLF), a company that weeks ago shot down rumors it had any interest in purchasing RIM. Samsung predominantly produces devices that run Google’s (NASDAQ:GOOG) Android operating system and has become one of the world’s two largest smartphone manufacturers, trading the lead every now and then with Apple (NASDAQ:AAPL).
The Times cited Samsung’s size as a primary reason it could be a RIM slayer. A Forrester Research survey found that among information workers who use smartphones for at least an hour a day, Android phones, Apple’s iPhone, and RIM’s BlackBerry capture roughly equal shares of the market. In Europe, researchers think Android phones will win out.
What’s clear to anyone who has followed RIM news over the past six months is that the company’s user base is going to be reduced – and it may be RIM itself that does the reducing. Heins, whose appointment was supposed to buoy investor confidence, appeared committed to a business strategy built on the hope that a security calamity would befall a competitor, prompting customers to run back to BlackBerry for safety. Android in particular has been vulnerable to security issues in the past, but the emerging version of the operating system, nicknamed Ice Cream Sandwich, has those issues largely solved.
Undermining Heins’ tactic is the fact that RIM’s newer devices haven’t exactly been bastions of security. RIM’s PlayBook tablets lacked native email for months after their release and required a costly upgrade for businesses interested in secure emails. This has been rectified, though, in the recent PlayBook upgrade. The newest BlackBerry in the RIM lineup, BlackBerry 10, may indeed be an improvement over its predecessors, but that release has been delayed until the end of the year.
It does seem easy these days to kick RIM while it’s down, but it’s still premature to count BlackBerry out. There’s still strong brand recognition and businessperson loyalty, especially among older workers who are familiar and comfortable with RIM technologies. But the company needs to start demonstrating confidence in its own products before it can expect consumers, and investors, to follow suit.
