The Rise and Fall of RIM

This is Research In Motion’s 10-year daily chart. It tells the chilling story of a company that was innovating its way to the top for years, became complacent, and then, when the market conditions were disrupted by a new player, completely failed to adapt. Investors continued to have some confidence throughout 2009-2010 as the company attempted to downplay its shortcomings in flamboyant statements about the future. It also attempted to obfuscate the leading indicators of its demise by pulling financial tricks to keep its sales charts stable (e.g. by offering discounts near the ends of quarters to increase raw unit numbers).

By early 2011, the company had distracted the industry with the PlayBook, which was apparently meant to take on the iPad. RIM’s core business, BlackBerry phones, continued to stagnate and all attempts to create a touchscreen device had failed; the software was poorly written and the hardware seemed rushed. After several completely redesigned versions, they seem to have given up.

All of these failings have become extremely visible within the past eight months. Millions of users are switching away from BlackBerry every quarter (6 million in Q3 2011 alone), the PlayBook has failed, and the company has not announced anything particularly revolutionary in the product pipeline. RIM’s product lineup looks almost identical to the one it offereed 6 years ago, with only minor updates to keep up with the industry at large. Despite loud statements by RIM’s co-CEOs, they have not delivered.

The end of the chart is clear: for three years, investors had faith; they hoped that RIM would pull out of its downward spiral. It never did. And now there is no hope.