MGI Research

Wednesday, Jan 16th

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Mobile Computing

Is RIM Done?


Research in Motion, Ltd. (RIM) recent financial guidance put the lingering questions about its strategy and execution into sharp focus. RIM (MGI Index= 2,396) shares lost over 28% since April 28th 2011. Some industry observers feel that the tsunami of Apple (MGI Index=8,327) and Android offerings has irrevocably washed RIM away from its comfortable market position. Others see the current RIM challenges as a temporary hiccup for an otherwise great company in a great market. For one thing, we do not believe that with over $2Bil in cash, no debt and a consistent profitability, RIM is going out of business any time soon. The question is one of relevance and leadership. Can RIM retain a meaningful leadership position in the new mobile computing landscape and generate above market growth and profitability? Can it defend its position in the consumer markets and successfully penetrate the tablet space? Or will it roll back to being a niche provider of mobile access solutions for secure enterprise-class e-mail? Does the company have a realistic vision of the overall mobile computing opportunity? How long will the recovery process take? Do the RIM board and current management team have the right combination of skills to translate the vision into action? In this research note we examine RIM survival and recovery scenarios and share our outlook of why RIM's recovery is likely to take a while.

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