Saving RIM from RIP: all eyes on BB10

Research in Motion Limited (RIM), the Ontario, Canada-based maker of BlackBerry mobile handsets, has been in the eye of the storm for much of this year. Battling the liquidity crunch has been especially hard for the new CEO, while losing smartphone sales to fresh releases from Apple and Samsung. RIMs once-sound global smartphone market share dropped below five percent in 2012, according to IDC, a tech consultancy firm.
At long last, things are looking up for RIM. Thats primarily due to the Companys recent launch date announcement (January 30) of BlackBerry10 (BB10) software platform - the next generation operating system that RIM will deploy for its smartphones, tablets and enterprise services. Same day, RIM will unveil two BB10-enabled smartphones, which may become available outside North America by March.
For this launch, collaborations with application developers and forging new global carrier partnerships are in the works. RIM seems especially focused on the corporate sector. The Company claims that around 90 percent of fortune 500 companies are relying on its BlackBerry enterprise services. A BlackBerry10 Ready Programme was announced last week to prepare the enterprise customers for the upcoming launch.
Meanwhile, corporate restructuring efforts are yielding some results. This is being attributed to the hard-nosed approach of Thorsten Heins, RIMs President and CEO who will complete his first year in office next month. He is said to have strategized on RIMs fundamentals - 80 million BlackBerry subscriptions, large enterprise footprint and unique network architecture - and he is now betting big on BB10s success.
Latest financial results suggest amelioration, though RIM still remains in loss. In FY13s second quarter ending September 1, revenues increased by two percent QoQ to 2.87 billion dollars, while net loss shrunk to 235 million dollars (which includes 136 million dollars in pre-tax restructuring costs). 432 million dollars were generated in operating cash flows. Cash, cash equivalents, and short- & long-term investments rose to 2.3 billion dollars.
Hence, RIMs stock value has come back in last 10 weeks, increasing by more than 90 percent from the all-time low of 6.18 dollars seen on September 24 on Nasdaq. The stock closed at 11.88 dollars last Friday.
Many analysts view the developments favourably, and expect a turnaround in RIMs fortunes if the BB10 launch becomes successful and the new BB10 phones catch on with Smartphone enthusiasts. The BB10 Smartphones will be released in the two versions of touch screen and QWERTY keypad, broadening its appeal. Some analysts expect RIM to slice open as large as 10 percent of the Smartphone market.
As the launch date gets closer, friendly forecasts have now started to pour in from big investment banks like Goldman Sachs Inc. Goldman analysts have upgraded their stock recommendation to uy, anticipating BlackBerry10 to propel RIM back to profitability in fiscal year 2014.
"We now assess a 30 percent chance of success for BB10 given positive early reviews, broad-based carrier support, attractive features, and interest by carriers and consumers in broadening the field beyond Android/iOS. Higher demand for the new, pricier phones should also drive up RIMs average smartphone selling price and deliver improved profitability," a recent Goldman research report noted.
The stakes couldn be higher for RIM this time. The BB10 launch is the Companys best shot at maintaining its relevance to its existing users and competition. Intriguingly, this event could also prove to be RIMs final shot at allaying concerns whether RIM would be around by 2015 or not!