RIM’s reasons for optimism
Posted Jun 28, 2011 04:48:28 AM.
This article is more than 5 years old.
A temporary reversal of fortune for Research in Motion may actually be opening a new window of opportunity.
Many analysts are suggesting that the company’s recent layoffs and missed earnings are just part of the cycle in the ever competitive high-tech space. Still others see this as an opportunity for RIM to once again assert itself as a mobile technology leader.
Carmi Levy is among those analysts who remain bullish on RIM’s fortunes given its current level of profitability and proven ability to innovate. He sees opportunity strictly from an investor’s point of view because share prices are low and very likely to head higher again.
Levy dismisses any notion that the company is about to shutter its doors and disappear. Its strong balance sheet aside, Levy sees this downturn as RIM’s chance to become more aggressive.
“I think now, internally, the culture is such that the company believes it can afford to take chances and greenlight projects that may not have otherwise seen the light of day,” Levy speculates. “You know, swing for the fences.”
Levy points out that succeeding in tech requires constant motion and the ability to innovate and create. He says it’s not necessarily a bad thing to get a new product to market before it’s been perfected, something RIM has always been reluctant to do. Levy is hoping a less conservative approach will signal more PlayBook-type releases from RIM, a product for which it was criticized because some analysts believed it was rushed to market.
“Better to be criticized for being too quick than be criticized for waiting too long,” Levy notes.
Even opportunity must be approached with caution, and Levy suggests that RIM must do more than merely be a follower in the increasingly competitive smartphone market.
“If it tries to simply introduce a device that’s as good as the (Apple) iPhone or as good as (Google’s) Android, it will ultimately end up in a death spiral,” Levy warns. “RIM needs to come up with technologies and directions that are unique to the company that don’t necessarily follow what the competitors are doing.”
One thing competitors have not been able to do is loosen RIM’s grip on the business market. While the company has had difficulty transitioning into the consumer segment, analysts note that businesses continue to run on BlackBerry.
