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Anecdotal Quips Regarding The Inevitable Failure Of Blackberry (ex-Research In Motion)

Reggie Middleton's picture



Research in Motion, now known as Blackberry, has had a tripling of price over the six months or so. For those that don't follow me, I warned when Blackberry was in the $60's that it was just about a goner (reference Hindsight Is 20/20, And As Luck Has It Our Foresight On Research in Motion Was Right On The Money Two Years Ago). Like Apple, it had a lot of followers who spent more time looking backward than forwards, hence were literally and figuratively blind to the upcoming crash.


Well, after tripling in an overdose of hopium, here we go again. Those who rode the fantasy narcotic-induced ride up obviously didn't read my post "Smartphone Hardware Manufacturers Are Dead, Long Live The Google-like Solution Providers".

You see, the problem is that Google's new age "less than free" business model has sparked a hardware war that no company that does not manufacturer its own parts can hope to win, or even flourish in - that is unless it is an expert in low margin sales. That... Blackberry is not! The Andriod tech, functionality, and mindhsar on both the hardware and software side is leapfrogging the competition (primarily Windows, Blackberry, iOS devices) almost QUARTERLY! With new handsets launching every six months boasting new functionality, and new OS versions launching every six months (alternating, thus creating an effective 3 month cycle) at the same many (or most) companies are slashing prices... How is a company like Blackberry which took two years to launch the revamped, yet barely competitive Blackberry OS10 to compete while maintaing a semblance of healthy margins or material market share? Quick answer, it can't! It's as simple as that.

All of the margin warnings that I gave throughout 2010 and 2011 still hold true today. Google's Android business model was designed to gut companies such as Nokia, Blackberry and Apple - all three of which need wide margins in order for thier business models to thrive. Two years ago, I warned that Android would compress the margins of all three of these companies - to Google's benefit and to their detriment. Let's see if I was correct...

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So, do Blackberry investors really think this time is different??? I answered this question many months ago...

Relevant research...

  1. The BoomBustBlog Multivariate Research in Motion Valuation Model: Ready for Download
  2. The Complete, 63 pg Google Forensic Valuation is Available for Download
  3. Deconstructing The Most Accurate Apple Analysis Ever Made - Share Price, Market Share, Strategy and All
  4. Subscribers see Apple 4Q2012 update professional & institutional and Apple 4Q2012 update - retail
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Thu, 01/31/2013 - 13:23 | 3202946 richard in norway
richard in norway's picture

Talking about another tech giant that's going to crumble, windows 8 is a real piece of crap. I'm not a techy so there might be some technical wonders about it but as a user it's horrible, makes me want to install android on my PC. It feels like someone's taken android, put a hair shirt on it and sent in 10 years back in time. I've been unimpressed with them for a while but now I know they are on the way out.

Thu, 01/31/2013 - 12:10 | 3202615 moneybots
moneybots's picture

"What sell side Wall Street doesn't understand about Apple"


Target, 650, no 700, no 1,000!


The sell side of Wall Street knows how to pump the bag holders, they plan to dump to.

Thu, 01/31/2013 - 11:58 | 3202554 tango
tango's picture

As much as I adore Apple products for their painless, intuitive, platform sharing ease of use, I too think Google has won the war.  In a sense, this is the very essence of capitalism - dominating products (MSFt, RIM,, Nokia,etc) inevitably relax, switch from R&D to marketing then spend their time playing catchup.  Alas, someone else will eventually emerge and overthrow the unbeatable Google at their own game.   

Thu, 01/31/2013 - 12:00 | 3202573 Mercury
Mercury's picture

No usb ports on Ipads/phones is a dealbreaker for me.

The "cloud" is lame.

Thu, 01/31/2013 - 12:54 | 3202817 donsluck
donsluck's picture

Per the comment above (way above) Apple is made for tech un-savvy. Their "intuitive" performance is actually an over-simplified dumbed-down approach that removes (or discourages) actual CONTROL of your device.

Thu, 01/31/2013 - 11:58 | 3202550 Mercury
Mercury's picture

You would think that Blackberry would focus on data security, which is their real (remaining) advantage, and market themselves as a solution for businesses, many of which have reluctantly given into making their data accessible via their employee's personal Iphone/pads. 

Thu, 01/31/2013 - 12:05 | 3202592 adr
adr's picture

Samsung is releasing a data secure enterprise solution for the Galaxy phones. That will end Blackberry.

Thu, 01/31/2013 - 11:19 | 3202383 NoDebt
NoDebt's picture

Somebody will buy Rimm, er, um, Blackberry.  Just hope it doesn't take too long or they might end up like Kodak (their BILLIONS of dollars worth of patents..... weren't worth as much as they thought).

Thu, 01/31/2013 - 10:50 | 3202292 Shevva
Shevva's picture

I can beat all your charts, Palm, HaHaHaHa that's a joke.

Thu, 01/31/2013 - 10:49 | 3202288 JOYFUL
JOYFUL's picture

Reg, not since Cassius Clay has one man been able to say I'm the Greatest!!!! in so many ways, so many times, and without a trace of irony to boot....that's some mantle to bear!

Right or wrong, it matters not, for above all, you are an entertainer! (and a giant amongst pygmy analysts|:)

Thu, 01/31/2013 - 08:52 | 3201957 ZeroPoint
ZeroPoint's picture

RIM made a colossal mistake which signed their death warrant - they made technology products that did not cater to the lowest common denominator - the American consumer.

They were kings then through it all away on a bad strategy.

Lesson learned - If it doesn't cater to the video/music addled, brain dead retard, it won't be successful.

Thu, 01/31/2013 - 10:04 | 3202082 Eally Ucked
Eally Ucked's picture

I don't think it's death warrant at all, they have 4.5% market share and their goal should be to keep it and not expanding. We've had hundreds of examples of cos getting TBTM (too big to manage) and we see Toyota, Apple, Microsoft and others just struggling to maintain their supremacy at unbelievable cost. Be smart, improve, keep your business going with resonable profits, you don't want to be 1 year star.

BMW share of the world market is about 2.8% and I don't think they're dying, I bet if you don't own one you dream about getting one.

Thu, 01/31/2013 - 12:17 | 3202652 Nels
Nels's picture

BMW has a physical moat, it's hard and expensive to build performance cars, and hard and expensive to match the BMW factories.

Whatever Blackberry offers can be offered on an Android, as far as interface goes.   About the only physical moat possible here is if RIMM finds a way to extend battery life well beyond any Android model.  Maybe QNX will do that for them.

Thu, 01/31/2013 - 10:12 | 3202142 Kiss My Iceland...
Kiss My Icelandic Ass's picture

"we see Toyota, Apple, Microsoft and others just struggling to maintain their supremacy at unbelievable cost. "


You can add AMZN to that list ....

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