The future of RIM not so dim

The knives are out at home, but analysts point to the company's global growth.

Opinion differs on whether Research In Motion, based in Waterloo, Ont., can buffer its bottom line by establishing a significant beachhead in the increasingly lucrative tablet market to go along with its ever-growing smartphone sales, or whether it should close up shop and get out of the game while it still can.

In January, ComScore ranked Android the top U.S. smartphone platform, while Apple further established its tablet dominance with the March 2 launch of the iPad 2. Kik Interactive, the Canadian startup boasting a cross-platform messaging app with many of the desired features of RIM’s BlackBerry Messenger (BBM), received significant venture-capital funding. All this has caused many to posit the BlackBerry maker has fallen and can’t catch up. To compound matters, on March 7, mere weeks ahead of the reported early-April launch of its much-anticipated PlayBook tablet, RIM chief marketing officer Keith Pardy announced his resignation just over a year after joining the company.

But a few deep breaths and a closer look at the numbers behind much of the hype reveal a different, more optimistic picture. Those same ComScore numbers still ranked RIM second among American smartphone consumers with 30.4% of the market (compared to Android’s 31.2% and Apple’s 24.7%) and, perhaps more important, RIM reported a 40% increase in sales for the third quarter of 2010, to 14.2 million BlackBerrys. With somewhere in the neighbourhood of 35 million daily users, as well as rumours the company will be rolling out an Android and iPhone OS version, BlackBerry Messenger isn’t going anywhere. Plus, never mind the stock has gone up 24% since the PlayBook was unveiled in late September.

“There are areas of weakness, specifically in the United States,” said Gus Papageorgiou, managing director of technology research at Scotia Capital. “But the whole negative perception is more in the media than in the minds of the public. Things like BBM and the corporate aspect of the BlackBerry solution are still very much helping the brand, and on a global basis the brand is gaining momentum.”

Pardy’s rather abrupt departure certainly raised eyebrows. Amitabh Passi of UBS Investment Research wrote a note to clients saying the resignation will likely “dampen sentiment and perhaps reinforce RIM’s struggles transforming itself from an enterprise-centric company to one much more focused on selling consumer products.”

A bold statement, considering RIM’s new ad agencies, BBDO Worldwide and MDC-owned creative agency 72andSunny, have yet to launch campaigns for the PlayBook and other BlackBerry products. Papageorgiou says marketing plans have been in place for a while, and Pardy’s parting will hardly do much to cripple the company’s image.

RIM has also been working to improve its relationship with developers, those who create the highly sought-after apps. Tyler Lessard, the company’s head of developer relations, recently met with blogger Jamie Murai after the latter’s blog post complaining about the PlayBook development process went viral. There have been positive reaction and excitement around well-placed rumours that the PlayBook will support Android apps, and the company’s QNX operating system in the PlayBook and new BlackBerry products has also burnished its rep.

The gushing reviews surrounding the release of the iPad 2 reignited speculation that Apple has essentially established what Deutsche Bank analyst Chris Whitmore described to investors as an “insurmountable lead” in the tablet market. But others caution against jumping to quick conclusions.

Amar Varma, founder of Toronto-based venture capital firm Extreme Venture Partners, says it’s simply foolish to count RIM out this early in the game. “Sales of tablet computers and smartphones will eclipse that of PCs, so the market is huge, and there’s going to be a number of people who will win,” said Varma. “We have to look at PlayBook as RIM getting ante in the game. Google just got their tablet [platform] out this quarter, and it was released with 16 apps. My suspicion is we’ll see RIM launch with a much deeper set of applications and a renewed interest in the platform.”