Will New Products Save RIM?
Being a global company who’s name is recognized just about anywhere in the world, and with headquarters right here in Ontario, Canadians are always very interested to know what RIM (Research in Motion) is doing. Especially ever since they’ve run into trouble competing with the big U.S. counterparts, namely Apple, in the world of smartphones. RIM has had their work cut out for them and so far, nothing’s worked. But with two new products on the way, is this RIM’s rebirth?
The trouble for RIM started in 2008 when they were one of the few Canadian companies that just couldn’t keep their heads above water during the recession. For the three years from 2008 to 2011, RIM shareholders lost a grand total of $70 billion, as the company’s market capitalization plunged from $83 billion to $13.6 billion. After announcing in June 2011 that their revenue had sunk for the first time in nine years, they knew it was time to do something.
Unfortunately, it was just a month later in July 2011 when RIM announced that the “something” they were counting on was to eliminate some jobs – and a lot of them. That month the company laid off 2,000 people; which equals about 11 per cent of the workforce. This past June, Morgan Stanley downgraded RIM’s status, causing RIM’s stock to drop to their lowest point ever – $9.01. One month later in July 2012, RIM shares closed on the Toronto Stock Exchange at just $7.09. And this week, RIM closed out on the TSE at just $6.95 a share. Looking at the chart below, it’s easy to see just how quickly – and by how much – RIM’s shares have sunk.
Clearly, something needed to be done over at RIM. And the sooner the better. Now, they think they might have the solution. Two new products, both greatly improved from the RIM options consumers once had.
The first product is going to be out in just a few days – the 4G LTE PlayBook is going to be launched in Canada on August 9 at three of Canada’s biggest carriers: Rogers, Bell, and Telus. The price of the PlayBook will depend on where consumers are in the country; and where they’re buying it from. The question is, will people buy it?
It does have 32GB of storage, which is good considering that RIM just got rid of their 16GB PlayBook, leaving some consumers frustrated with the lack of options (until now.) It will also be equipped with corporate email systems, something BlackBerry had neglected until now. The Long Term Evolution (hence the ‘LTE’) will give users a better video streaming experience, video conferencing capabilities with many different people, the ability to play role-playing multi-player games, and an Internet connection that’s simply faster than anything RIM has ever released before.
These features, RIM is hoping, will help the sales of the BlackBerry PlayBook, as they’ve been slipping ever since the tablet was released last year. BlackBerry is extremely hopeful that this tablet will help turn the tides more in their favour; but consumers may already be disappointed with it. The new tablet was announced in February 2011, with the release date expected to be that fall. A year later consumers are now more anxious for the new smartphone, BlackBerry 10, than they are for another tablet.
This is because the BlackBerry 6 OS just hasn’t been able to compete with Google Android’s service or Apple’s iOS system. With “thinking” hourglasses showing up on the screen, only to leave the user hanging; no touchscreen; and device-freezing issues have left RIM customers frustrated over the inability of their “smart” phone. When RIM came out with BlackBerry 7 OS, they still hadn’t take care of the issues that concerned consumers the most – namely, the touchscreen.
Unfortunately for consumers, the BlackBerry 10 won’t be out until later this year – and that’s only if RIM can keep on schedule with the one they originally outlined for themselves. Looking at when the new tablet’s coming out, especially when compared with the release date, consumers have once again lost confidence that they’ll have a BlackBerry 10 in their hands come Christmastime this year.