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RIMM’s BlackBerry Porsche Party: Another Self-Inflicted Wound

Soiree, swanky product show management still doesn't get it


If you’re a Research In Motion (NASDAQ:RIMM) shareholder, chances are you spent yesterday questioning whether your resolve was slipping into pure obstinacy as what’s already been a bad news month just continued to get worse.

Analysts who were chiding Nokia (NYSE:NOK) on its performance and prospects yesterday were openly warning the company it was in danger of being another RIMM. Illustrating that the “any publicity is good publicity” saying is bunk, RIMM’s shares promptly dropped 3.6% on the day.

And while you watched your investment continuing to swirl around the drain, where was RIMM CEO Thorsten Heins?

Where else but on Toronto’s tony Bloor Street, celebrating the North American launch of RIMM’s new Porsche Design P9981 smartphone. That’s right, the $2k BlackBerry announced back in October can now be yours. It’s got leather, stainless steel and a funky keyboard, a camera (albeit an outdated 5MP model), a special ringtone, high-quality cleaning cloth and a customized desktop theme with Porsche-inspired icons.

Take that, $199 iPhone 4S and Galaxy S III.

Hackers already have ported that customized theme and icons to other BlackBerry devices, so hopefully they weren’t intended to be a major selling point.

I might be out of touch with the typical BlackBerry customer, but I’m guessing a $2,000 phone was not high on their wish list. Release the new OS already, bring on the BB10 phones, get more developers onboard so I can buy what those other guys are playing — that’s what I’m guessing most people want.

Thorsten Heins is the guy who was supposed to bring a much-needed reality check to Research In Motion because the founders had lost touch with what customers wanted.

I’ve heard spin that RIMM wasn’t a big part of this; that Porsche Design executives approached them about making the phone. But the fact remains that besides being a questionable decision to proceed with building the device, making a big deal about it with a swanky launch party was a mistake.

On the same day Heins was preparing for the soirée — which included a fashion show, models, a vintage Porsche 911 and (unnamed) celebrity guests — analysts were digesting news that RIMM was preparing a payout of $12 million to former co-CEOs Jim Balsillie and Mike Lazaridis, while the company’s stock was taking that 3.6% hit. They can’t blame anything on the lack of a marketing chief this time (an excuse that was trotted out multiple times in the past), since they finally hired that guy at the start of May.

Aside from the Nokia and former CEO drama, consider the other news RIMM has generated in the past month:

That’s on top of the usual doom and gloom surrounding the company, talk of thousands of layoffs and mounds of unsold inventory. Regardless of whether the P9881 should have been released, having RIMM’s CEO out publicly celebrating the event was a bad PR move.

When it reviewed the device, Engadet pointed out that “For all intents and purposes, Porsche Design pretty much took a Bold 9900 and stuck it in a more arresting chassis.” Even more damning, when CrackBerry — the definitive BlackBerry review site — summed up its thoughts on the P9881, it did so by pointing out: “… the Bold 9900 is arguably a better BlackBerry for way less money.”


Oh, and RIMM already announced at BlackBerry World 2012 that devices currently running the BlackBerry 7 operating system will not be upgradeable to BlackBerry 10, the long-delayed, next-generation OS the company is banking on to turn things around.

I probably don’t need to tell you that the P9881 is running BlackBerry 7, which would indicate that in a few short months it will be out of date and unable to benefit from the spanky new OS. The P9881 spec sheet indicates it uses a single-core 1.2GHz processor, and developers say BlackBerry 10 requires a dual-core, so I would expect that even if RIMM makes the effort to eventually support BlackBerry 10 on the P9881, the experience will be pokey enough to make owners want to use it as a two-thousand-dollar doorstop.

The release of the P9881 — its timing (both in terms of the company’s fortunes and coming just prior to a major platform switch), its ridiculous price and its outright silliness in comparison to RIMM’s inability to reverse its slide in smartphone market share — serves to illustrate a point. Well, several points. RIMM’s senior management still doesn’t get it, maybe RIMM should focus less on hardware and more on its services where it still shows some leadership, and the company has got to get its marketing efforts into full swing before those self-inflicted shots to the foot become fatal.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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