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RIM investor says the company “should sell its handset business”, and once again calls for a change in leadership

By on December 15, 2011 at 8:49am in Mobile News


Research In Motion will be announcing their Q3 results later today, something most investors are fearing as the company continues its downward spiral. The anticipation for their next generation BlackBerry 10 (BBX) smartphones is relatively high, but always out numbered by some sort of unfortunate luck – poor PlayBook sales, trademark infringement, service outage, rabid employees who cause mayhem on an Air Canada flight.

While we wait for the official numbers to roll in, one of their most outspoken investors, Jaguar Financial Corporation, has again sent out a press release that says the company should be split into several parts, plus declares that co-CEO’s Jim Balsillie and Mike Lazaridis should resign because “investors have lost faith in the ability of the RIM management team to carry out a proper game plan to restore value” – the stock price dropped again yesterday by $0.40 to $15.08.

Vic Alboini, Chairman and CEO of Jaguar, said that RIM Board Members Barbara Stymiest and Dean Roger Martin “should step up and take the lead in making dramatic governance change”. However, it seems like this Alboini fella is a take-it-or-leave-it kinda guy, noting that if Stymiest and Martin fail to “step up”, they should then “resign from the Board if they are unable or unwilling to initiate appropriate governance changes.”

In October Jaguar noted the best route for RIM is to split into 3 divisions: network, device and patent. Now, a couple months later, the tone has completely shifted as “Jaguar believes that RIM should sell its handset business and monetize its patent portfolio, while retaining its service business under new leadership.”

Alboini says that RIM has “lost its ability to compete in the consumer hardware business” and a sale of the “handset business is recommended as an approach to restoring value”. RIM reported a couple weeks ago that Q3 estimation had approximately 14.1 million BlackBerry smartphones shipped, but they also expect “the fourth quarter to be below third quarter levels.” In 2012 RIM is rumoured to launch five BlackBerry 10 devices: London, Lisbon, Milan, Nevada, Black Forest.

“Jaguar believes the service business is RIM’s most valuable business… If the hardware business were sold, RIM can focus on managing and delivering mobility solutions in the enterprise sector for all smartphones and tablets. With its secure messaging platform, Jaguar believes RIM could create considerable value as a software and service provider.”

We’re crossing our fingers for that some sort of good news will come out of the Q3 results later today. Something, eventually, has to give and we hope things turn around for the famed Canadian company.

Source: CNW

Discussion

18 comments for “RIM investor says the company “should sell its handset business”, and once again calls for a change in leadership”

  1. Blackberrys are one of the best phones :)

    Posted by Dave | December 15, 2011, 9:00 am
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  2. I think if the new blackberry smartphones really do have flash support then sales may surpass I Phone and rim will be back on top (or at least further away from the bottom)

    Posted by ThatNamelessPerson | December 15, 2011, 9:09 am
    Reply to this comment

    • You mean Flash, as in the product being discontinued by Adobe in 2012 for mobile devices?? You might want to rethink that comment..

      Posted by Joe | December 15, 2011, 9:45 am

  3. Blackberry needs to go back to focusing on a good reliable OS with one or two main devices. There are just too many different devices out there right now. Consumers are confused as to which BB to buy and developers are having a tough time making apps to fit all of the different styles.
    EX:
    1)Keyboard, no touch screen, OS 5
    2)Keyboard, no touch screen, OS 6
    3)Keyboard, no touch screen, OS 7
    4)Keyboard, touch screen, OS 7
    5)No keyboard, small touch screen (slightly bigger than #4), OS 7
    6)Keyboard, larger touch screen, OS 7
    7)Keyboard, flip, no touch screen, OS 6
    8)No keyboard, large touch screen, OS 7…. etc etc etc.

    This makes 8 different styles of devices that they currently are selling as new devices. If you include the Pearl and the storm with other unique screen styles and keyboard styles, then you end up with an even bigger mess!

    I would never try to make a good app for such a varied market. How can RIM even make a decent OS with such variety??

    Posted by Poseidonb | December 15, 2011, 9:10 am
    Reply to this comment

    • You forgot the CDMA versions the AWS versions and the PINK and WHITE versions!

      You are right: who could enjoy volume profits with so many models. Imagine the nightmare for suppliers, distribution channel, repairs etc etc.

      Posted by Alboini | December 15, 2011, 9:31 am

    • BlackBerry 10 will solve this problem with the switch over to a new OS:
      – all devices will be touch screen
      – some with have keyboards, but NO trackpads, so it is an all touch-based interaction model (like iPhone) rather than focus-based like BlackBerry current is (and with keyboard as added bonus if you want it, however would not change how developers design apps)
      – all will have consistent screen resolutions

      Posted by Will Robertson | December 15, 2011, 9:42 am

  4. RIM and RIMM (US stock) supporters keep citing the cash, market share and users (70 million) over and over again. The problem is that those numbers were released in Q2 (from the 3 months before) so those numbers are obsolete. Today we will see numbers from second half of the year, that will only show the trend that RIM will follow from now on until they release QNX. Last Book value was at $9.6B and and takes 3.6B in patents 4.6 for the network and 1.4 in cash. OLD NUMBERS.

    The most recent valuation is: 2.5B for patents; 3B for NOC (Network services) and 1B in cash = 6.5B TOTAL BOOK VALUE, and RIMM has a market cap of 7.9B trading at $15.08, so just from that there is room to drop another 20% to $12 per share.

    If we get more “Early this year” “in 2012″ and “coming soon”vague dates and no accountability from the company and the stock will sink..more!

    Last year Alboini was calling RIM to separate their divisions (Patents could be sold; Network actually makes a lot of money and hardware sucks) so the other two divisions could survive while the CEOs take the Hardware to the ground. Now there are at least two more analysts that follow Aboini, but its up to the CEOs to let that happen, but that would b giving up power and admitting defeat and they will destroy RIM before they do that. SAD.

    For the same reason NOBODY will buy RIM as is:
    1-Why buy it now paying too much for it and then paying more to get re-structure and get rid of the CEOs, when you can wait for it to implode and only buy the pieces that you want.
    2-Nobody will buy the company just to fight a long and costly battle getting rid of CEOs.

    Conclusion: the future os RIM depends on the creation of three divisions; Hardware most probably will die but the rest will survive. The only ones that have the power to make this happen are the analyst (Alboini et al) pushing from the outside and the board of directors siting with the current CEOs. If nothing happens 3/3 of the company will die. If they act fast 2/3 of the company will survive. Its up to them.

    Posted by Alboini | December 15, 2011, 9:28 am
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    • For most of us. Blackberry is a device not a service. They have profit of service cause they used to sell hardware.Who is so stupid to buy the extra service from them when they can get similar service from the telcos.BB going down from te stupid management and lack of inovation. If they strip themselves they will fall faseter than if thay keep the BB hardware.

      Posted by Blackberry or no berries :) | December 16, 2011, 8:25 am

  5. A company’s performance is merely a reflection of the CEO’s abilities and decisions. Looks like RIM’s co-CEOs are going to milk the company dry before they step down to milk another company. This is very sad, especially for a lot of proud Canadians.

    Posted by Alnjai | December 15, 2011, 11:00 am
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  6. If the investor isn’t happy sell the stock. Selling the handset business would do nothing for the RIM maker except improve the investor resultsin the short term only. It would be devastating to the company in the long term and turn them into a patent company only. Other people are right here though they have far too many models out their right now. They need an all touch model, a qwerty keyboard model and a low end version of the same for the emerging markets or teenagers. 4 down from a zillion. GM and the car companies learned this lesson and it would allow for a faster turnaround and less product development time. Of course with developers needing to satisfy fewer models then it may encourage them to do more apps.

    Posted by Paul | December 15, 2011, 11:00 am
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  7. RIM is all about the phones. I think if you sell off that part of the business, thats it?

    If you’re not developing new phones/tech, then you’re probably not too motivated to develop new patents. You’ll basically become stagnent while earning money on existing panents, then declining as those patents become obscelete.

    Posted by Zod | December 15, 2011, 11:25 am
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  8. f*ck that patent nonsense

    I love my BB9900 and it’s super keyboard

    and I often use the trackpad for precise clicking in web pages VERY usefull!

    that jaguar twerp is an a**hole managing a puny sum of money

    moove on to boring androids if ou want to !

    Posted by kad | December 15, 2011, 12:00 pm
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  9. In order to survive in the comming years, 2 things that RIM must do:
    1- Get rid of these 2 doorknob co-CEO’s Jim Balsillie and Mike Lazaridis.
    2- android comparable.
    @- Without these move, it’s over … like in 3 years.

    Posted by Dave | December 15, 2011, 12:43 pm
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  10. I hope BB 10 provides RIM with the opportunity to turn things around. It would be a shame to see such a great Canadian company go under.

    Posted by Matt Polkiewicz | December 15, 2011, 3:52 pm
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  11. Lady s and Gentleman.
    It is too late. RIM had an opportunity last year to JUMP ship and board the Android Cruise lines but alas they decided that budding up to Apple,MS and others was the best course of action for them…. http://www.osnews.com/story/24910/Apple_Microsoft_RIM_To_Buy_Nortel_Patents.
    Now they are slowly dying off and soon will join Palm and others as Company’s that had Bad leader ship and no forward insight as to what would be BEST for them.
    Too little , too late.
    They should have followed SAMSUNG, HTC ,LG and many others but Noooooooooo.
    RIP RIM. The days are numbered.

    Posted by Nathen.00 | December 15, 2011, 4:57 pm
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