Kiss hopes for any Rim deal bye-bye - article
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Kiss hopes for any RIM deal bye-bye - Therese Poletti's Tech Tales - MarketWatch
Kiss hopes for any RIM deal bye-bye
By Therese Poletti, MarketWatch
SAN FRANCISCO (MarketWatch) � Investors who have been holding onto their stock in Research In Motion Ltd. with the hopes that the company is a potential takeover target should be discarding any such notions.
After three days of service outages, initially caused by a core switch at a data center in Europe, RIM*has infuriated many once-loyal customers, just as Apple Inc. is about to start selling the new iPhone 4S and lowering prices on older models. It is also the first time carriers are offering free iPhones (albeit older 3GS models) to new customers.
�The outage is the largest disruption to RIM�s service since December 2009,� Mike Abramsky, an analyst with RBC Capital Markets, wrote in a note. �The anger generated by these outages could drive some consumers to evaluate alternative smartphones from Android or Apple.� Read more about how the outage could threaten RIM's remaining assets.
Some analysts are also a bit jittery that the service outage could be related to the company�s upcoming upgrade to its new QNX operating-system software, which could turn off any potential buyers, if indeed there are any.
�The success of this upgrade is extremely critical,� according to Jeffrey Fidacaro, an analyst with Susquehanna Financial Group, who said it would demonstrate that RIM can move its key features to the new software. �We do not see a potential acquirer considering RIM until it can prove it can engineer the cut-over to the QNX platform internally, as this would pose a huge technology-integration hurdle,� he wrote in his note.
A RIM executive in a brief conference call on Wednesday said the root cause of the outage was a core network switch, and that the company was working to restore service globally. One thing that might cause further investor concern is that redundant systems also failed. It�s not clear whether QNX issues have any involvement, but RIM has endeared Wall Street over the years with its stellar and consistent service.
Karl Volkman, chief technology officer of SRV Network Inc. in Chicago, said it was possible that the company�s QNX transition is playing a role in the outage.
�They could have been running tests on their network and overloaded something,� he commented. �It just seems very strange that a single network switch on Monday is still affecting it.�
Volkman added that the timing could not have been worse. �For years, they were the epitome of business and mobile communications, and obviously other smartphones and smartpads have eroded their leadership.�
One shareholder in particular has been pushing hard for management changes and/or a sale. Jaguar Financial Corp. wrote the company a letter in early September, requesting that RIM�s board look at its options to maximize value, including selling the business.
�The status quo is not acceptable, the company cannot sit still. It is time for transformational change,� wrote Vic Alboini, chairman and chief executive of Jaguar, based in Toronto. �The directors need to seize the reins � before more market value is lost.�
RIM shares have lost 66% of their value this year, closing at $23.88 on Wednesday, compared with a 52-week high of around $70.
Some hopefuls have theorized that Microsoft Corp. MSFT -0.45% *could swoop in if RIM�s stock price got low enough. But the software giant has its hands full with its Nokia Corp. *deal, and doesn�t need yet another operating system to try to integrate � unless it was to completely abandon Windows Phone, an unlikely proposition.
At the very least, no buyer will be interested until RIM has proved to investors that its QNX software is going to carry the company forward as the future operating system for the BlackBerry, not just as the software in its tablets, which have been poorly received so far.
The company�s service outage also comes a week before its BlackBerry Developer Conference, which begins next Tuesday in San Francisco. RIM managers may end up spending a lot of their time trying to convince developers of the merits of QNX and why they should not flee the platform.
In the meantime, RIM investors hoping for some sort of deal could be sitting in limbo.
Therese Poletti is a senior columnist for MarketWatch in San Francisco.Chrisy likes this.10-13-11 07:47 AMLike 1 -
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most of these "journalists" are amongst the least educated people i know!
and are not qualified to speak on most matters...but think they are!
...like politicians....10-13-11 08:05 AMLike 0 -
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Just saying, businesses on BES weren't affected by this outage, only BIS.
Posted from my CrackBerry at wapforums.crackberry.com10-13-11 08:08 AMLike 0 -
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The Canadian government views RIM as very strategic and a significant player in Canada ... they will not allow a foreign takeover of RIM unless there is a significant NET Benefit to Canada ...
RIM has turned the corner .. good things ahead ... I love the Bold 9900! .. best professional smartphone out there! ....
Playbook will be significantly enhanced by software upgrades OTA very shortly! .. other significant news will emerge ....
now is not the time to panic ... or listen to the trolls or short sellers out there spreading false rumours ....mustangv8 likes this.10-13-11 09:04 AMLike 1 -
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Cloud-based computing really changes the landscape adding levels of complexity and exponentially increased demand. RIM had an outage, dealt with it, resolved the issue, and publicly apologized for it.
As far as Apple is concerned, they must be thrilled by this outage since it is diverting attention away from their ability to deliver iOS 5 to their users. Apparently, Apple wasn't prepared for the volume of requests and are leaving users frustrated with the Error 3200 message they receive when trying to download the OTA update.10-13-11 11:32 AMLike 0 -
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Karl Volkman is full of it. CTOs don't manage and deploy networks, they manage budgets and sign paperwork. Everyone under him is what makes his company run.
And I've personally seen a bad switch wreak havoc on small\medium sized networks. So yes, a bad switch can affect millions of users.10-13-11 04:30 PMLike 0 -
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Yeah yeah, as if gene simmons actually cares about RIM. :rollseyes:
Posted from my CrackBerry at wapforums.crackberry.comoldtimeBBaddict likes this.10-13-11 08:37 PMLike 1 -
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Canadian govt would block any American company trying to take over a failed Canadian company. Also, why would the management that ran the company into the ground want to lose their golden paycheck? Obviously, all the management would be dumped if a takeover took place.10-13-11 09:05 PMLike 0 -
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How much more room for gains could the shorts possibly have with RIMM trading in the single digit P/E? Oh, they were saying that at 30 as wellThe Canadian government views RIM as very strategic and a significant player in Canada ... they will not allow a foreign takeover of RIM unless there is a significant NET Benefit to Canada ...
RIM has turned the corner .. good things ahead ... I love the Bold 9900! .. best professional smartphone out there! ....
Playbook will be significantly enhanced by software upgrades OTA very shortly! .. other significant news will emerge ....
now is not the time to panic ... or listen to the trolls or short sellers out there spreading false rumours ....
Very correct about the govt position. I learned that aspect when they blocked the acquisition of potash by monsanto. Lets be honest though, look at how much profit the shorts or put owners have made in rimm while longs likely have one of the biggest losses of anything on their books.10-13-11 09:08 PMLike 0 -
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Kiss hopes for any Rim deal bye-bye - article
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