It's about 7 months since I last wrote about Nokia. Since then I've been transfixed by the total slamming that Research in Motion (aka RIMM aka the maker of Blackberries) has had. The graph below compares Nokia and RIMM over the last 5 years. Whilst RIMM largely outperformed NOK, the last year has been brutal for them.
Zooming in and Looking at year to date, NOK has outperformed RIMM (not that you'd have wanted money in either of them). RIMM is down around 70% this year. What a stunning fall from grace. The latest fall was triggered by a write-off of their planned iPad competitor, the Playbook. The write-off amount is staggering, at $485m, suggesting that RIMM had pre-bought many hundreds of thousands of units (it's probable that it was more than that, and that there are actually millions of the things sitting, gathering dust, in a warehouse or two), expecting them to sell by the truck load - that would seem to go against the long since in vogue "Just In Time" manufacturing process. It's also possible, I suppose, that this isn't a write-off of just inventory but actually a write-off of the entire product. RIMM's results are out soon and we'll perhaps find out then.
Nokia has new product with its Windows Phone-based Lumia range; new blackberries are on the horizon and RIMM, like Nokia, has also to execute an operating system shift (moving to QNX). Such moves are fraught with risk, especially in a world where your corporate customers have already been hit by email outages. Making QNX work - keeping old apps working, making the UI consistent enough (but allowing new capabilities to feature highly), zeroing in on the bugs and getting the security accreditation right (for the many government customers) will all be hugely challenging. And remember, the Playbook is powered by QNX. Uhoh.
My guess is that RIMM won't pull it off and further falls are on the way (although they will be interrupted by rallies as the market hopes that the tide has turned). So where does that leave RIMM? An acquisition target? It's hard to see an industry player stepping up, but private equity houses have plenty of money now. Bankrupt? That seems unlikely too - they are still selling millions of devices, and it's a long way to zero. A CEO change? That seems likely before either of the above - new CEO cleans house, reverses some wrongs and tries to get it all back together.
Rumour has it that RIMM will name their new operating system "X". It might mark the spot. But I think the spot is quite a lot lower than it is today.