Research in Motion (RIM), the maker of the popular Blackberry mobile phone, has seen sharp declines in sales over the past quarter. Due to sharp declines in sales and the rise of its competitors, the company is now faced with two options of survival: to focus on smaller and cheaper markets or to find a willing buyer.
Subscriber growth rate has fallen from 8% to about 3% from the previous quarter. This, along with recent exits of high ranked officials, has painted a bleak picture of RIM’s future. Though young CEO Thorston Heins announced a new operating system and new Blackberry phones to be released later this year, investors have not been convinced. With a market capitalization of over 7 billion, only the biggest companies would be able to afford the acquisition. Potential buyers include Microsoft and Nokia, who previously considered a joint purchase last year.
If not successfully bought, RIM would have to focus on a different market such as smaller and more affordable phones. This would most likely be the case as there does not seem to be a hint of any large purchases in the near future. Expect the Blackberry to continue to lose market shares to the Apple iPhone and the Android. Research in Motion needs a savior now or else it will only continue to decline.
- Jesse Chai