'Why should RIM exist when all other smartphone makers are developing better products faster?'
Outpaced RIM should be sold while the business still has assets worth purchasing, according to technology M&A advisory firm, Magister Advisors.
RIM announced poor fourth quarter results last week. It failed to hit analyst forecasts for sales, shipping 11.1 million BlackBerry's against predictions for sales of 11.2 million, and hitting revenues of $4.19 billion against predictions of $4.57 billion, taking a net loss of $125 million against a profit of $934 million for the same period last year.
As well as missing profit and revenue targets for the fifth quarter in a row, the company also stated that Jim Balsillie had left the board.
Balsillie and Mike Lazaridis both left their positions as co-chief executives of the firm in January this year, but now Balsillie has also left the board of RIM, along with chief technology officer David Yach and chief operating officer Jim Rowan. As these long serving members desert the sinking ship, RIM has been left looking more unstable than ever.
Commenting on RIM's quarterly earnings announcement, Victor Basta, director of Magister Advisors said: 'Under their new leadership, RIM are focused on operational improvements but the real issue is fundamentally strategic: why should RIM exist when all other smartphone makers are developing better products faster? 'RIM spends billions on R&D, but they consistently deliver me-too products and are outpaced in a market that demands innovation. RIM has already lost the consumer battle and its main asset is its enterprise customer base, so retrenching to a corporate-only focus makes sense,' continued Basta. Basta added: 'In our view they should sell the company while that corporate customer base remains intact. There would no shortage of logical potential buyers, from those focused on enterprise mobility (eg SAP and Sybase) to those with a strong interest in the device marketplace (eg HP and Huawei). Valuations in the mobile space are currently strong, which favour a transaction for RIM.'
In a call to analysts last Thursday, RIM's Chief executive, Thorsten Heins, stated that the company is reviewing its strategy over the next 10 weeks, and that after that period it would focus on the enterprise market rather than the consumer space.