June 21, 2011

The past week there has been story after story in the Globe and Mail of the struggles of Blackberry creator Research In Motion (RIM). Last week was one of the hardest weeks the company has had in years missing revenue expectations and slashing future forecasts. The stock price tumbled over 20% last week in just a couple of days. Today this story broke about RIM handing layoff papers to over 200 employees at their home headquarters in Waterloo Ontario.

Things are not looking good for Blackberry and being a Blackberry owner myself, I’m a bit concerned for their future. Here are 5 reasons why RIM is in trouble;

1) Consumer Confidence – Most of the news people have been hearing about RIM lately has been negative. Whether it’s falling stock prices, layoffs or poor products, it seems the company that once couldn’t do a single thing wrong is now doing everything wrong. Once the average consumer gives up on Blackberry and moves to some sort of Android or iPhone, chances are they aren’t coming back.

2) Playbook “Failure” – There have been reports that sales of the new Blackberry Playbook tablet have been good, but not great. I’m hearing quite a different story from friends who work at stores who sell the Playbook tablet. One of my friends who works at a large department store said they were shipped 25 Playbook’s on launch date and still haven’t sold a single one. Another friend from an electronics store tells me he is making sales, but not nearly as many as the iPad 2 or other tablet PC’s. It seems to me Blackberry is giving info on their shipping numbers, not actual sales.

3) Lower Stock Price – The lower the stock price goes, the more people hear about it and the more the big companies who hold RIM stock are pulling out. The stock price hasn’t been this low since August of 2006 and it’s only projected to go lower until RIM can show some type of turn around.

4) Length Of Time Between New Products – Everyone in the tech world has been hearing about Blackberry’s new operating system for over a year now and we STILL don’t have a new Blackberry that uses it. Reports are that Blackberry’s carrying the new OS may not be available until early 2012 even though they’re releasing a new Blackberry Bold later this year!

5 ) iMessage – This one may seem a bit funny, but yes the new Apple messaging system “iMessage”, which is due out later this year, could leave many Blackberry users jumping ship. Just a quick search through Twitter on the day iMessage was announced I could find user after user saying something to the effect of “Well, now that there’s iMessage, I don’t need my Blackberry anymore.” If Blackberry’s haven’t lost their “cool” factor with the 18-34 crowd yet, they will soon enough and once that goes they may never get it back.

I don’t plan on getting rid of my Blackberry anytime soon. As a matter of fact, I was considering dropping my Curve and moving to the Torch however, all this bad press really has me thinking twice. If RIM doesn’t blow people away with their next line of smart phones, we could see RIM join Palm and many others in the smart phone cemetery.