RIM like APPL in 1997 or tomorrow's Kodak moment? I bet 10K that Thorsten can bend it like Steve did
January 24, 2012 By Nathan Rudyk
Know what Warren Buffett says about being greedy when others are fearful? I smell a lot of fear, am reading bucket-loads of loathing, yet see a turnaround opportunity at RIM. So today I fired up my online trading account to drop $10,000 on RIM stock priced at $15 and change.
What inspired the bet, and it definitely is a bet at this very early stage of Thorsten Heins' time in the CEO chair, was some investigation into Apple's stock price when it too was priced at "maximum fear". Apple had, said 90s-era critics, hopelessly lost its way after it suffered one of the biggest quarterly losses in Silicon Valley history.
Chris Nerney, a blogger at ITworld, researched Apple's stock price at $5.42 when Steve Jobs took back control of Apple in the fall of 1997. Based on today's price, a $10,000 investment in APPL at that time would now be worth $775,830. Nice bet.
Compared to yesterday's Apple, today's RIM is growing (from 75 million users compared to last year's 50 million), has positive cash-flow, no debt, and competes in a high-growth market. In a credit-crunched, profit-constrained world, that is no small thing. RIM has room to move.
Not that RIM's pile-on populous of critics need more air time, but I'll point out that Nerney rates the content of Heins' first performance as CEO as "absolute nonsense". Others, including the Financial Post's Theresa Tedesco, are just as brutal. In her case, she wrote today that hiring Heins as CEO proves "they are still clueless in Waterloo".
I'm not so sure. Just as Apple's transformation success pivoted on software (Steve's visionary but commercially unsuccessful NeXTStep OS, purchased by Apple for $429 million), RIM's software-based fortunes arguably rest on an extraordinarily solid, proven OS from Ottawa's QNX (purchased by RIM in 2010 for $200 million).
Earlier this month, QNX software, the software foundation of RIM's upcoming, lustworthy BlackBerry 10 "London" smartphone, won a "Best of CES Award" for its QNX CAR™ 2 application platform. Tens of millions of devices run QNX software, from cars to nuclear devices to Internet routers. Not long after the QNX acquisition, RIM acquired Alec Saunders (well respected mega-blogger, ex-Microsoft and QNX) as VP of Developer Relations. Another good move in the right direction.
From the 2010 RIM press release announcing the QNX purchase (one sentence underlined for emPHAsis):
"In addition to our interests in expanding the opportunities for QNX in the automotive sector and other markets, we believe the planned acquisition of QNX will also bring other value to RIM in terms of supporting certain unannounced product plans for intelligent peripherals, adding valuable intellectual property to RIM's portfolio and providing long-term synergies for the companies based on the significant and complementary OS expertise that exists within the RIM and QNX teams today."
Best technology of course, does not win. If that was true I'd be typing this post on a Xerox Alto. RIM's PlayBook launch was a product-disconnected joke, and the company's PR department, as witnessed by this infamous BBC interview with one of RIM's erstwhile co-CEOs (while a hapless PR person yammers off-camera), has widely been known as serially awful and inaccessible to journalists. But, those things can be fixed, RIM's market is no way resembles Kodak's, and RIM's new CEO seems intent on making the necessary fixes.
So, go Thorsten go! Bend it like Steve, or better yet, bend it like Thorsten.
p.s. If you have more time, check out this "Steve, what do we do about the press?" video from Steve Jobs. It was made in 1997, when Apple's stock was priced in a single, lonely digit.
(Nathan Rudyk is President and CEO with market2world communications inc., the public relations and product marketing agency for global innovators. He is also an iPhone user who looks forward to switching to a QNX-powered BlackBerry in the near future.)