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The two chiefs of BlackBerry maker Research In Motion on Thursday slashed their annual pay to a dollar each as the company's stock price sank under the weight of gloomy earnings figures.
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RELATED QUOTES
| Symbol | Price | Change |
|---|---|---|
| RIM.TO | 14.20 | -0.13 |
 | ||
By LuAnn LaSalle, The Canadian Press
MONTREAL - BlackBerry maker Research In Motion will likely have but one goal in 2012: stop the terrible skid that started a year ago before it gets horribly out of control.
RIM (TSX:RIM.TO - News) enters the new year a very different company than the tech darling it was just 12 months earlier: stock price severely beaten down, PlayBook tablet branded a failure, sliding market share, ever hotter competition, a global server outage, continuing troubles with foreign governments.
It's no wonder the Waterloo, Ont.-based company's leaders, Jim Balsillie and Mike Lazaridis, have come under fire.
The road to recovery will begin with the launch of a new line of smartphones. But critics say even they will only help it catch up to the Internet-friendly Apple iPhone and Google-powered Android smartphones.
"I just don't see how these guys can turn the tide around," said analyst Anil Doradla.
"I don't think there's any strategic vision for them in 2012 that will turn the company around, short of them releasing an Apple-like experience or an Apple-like phone," said Doradla, of Chicago-based William Blair & Co.
With RIM losing 70 per cent of its market value year-to-date and announcing in early December that it will take a US$485-million charge before tax on the cost of discounting the price of PlayBooks and $50 million in lost revenues from an October service outage that affected millions of BlackBerry email and text users, "we believe the stakes for RIM have never been higher," says UBS Securities analyst Phillip Huang.
RIM stock hit a high of $140 per share in 2008. By early 2011, it had dropped to slightly under $70 a share, giving it a market capitalization just shy of $37 billion. By December, its stock was trading around $16, and its market value stood at $8.7 billion.
Huang says it's time for the company's board "to make a bold move," perhaps a change in leadership, a shift in strategy or some kind of corporate deal — including possibly the sale of the company.
"We struggle to identify a buyer with compelling strategic rationale, though any number of large-cap tech firms, may contemplate such a move (either in part or whole)," Huang says.
"To a potential buyer, RIM's enterprise footprint and patents on messaging/security may be appealing."
A lot is riding on a new operating system, now called BlackBerry 10, that will power the new RIM smartphones, expected to hit stores early next year.
Doradla views the rollout of new BlackBerry smartphones as primarily a defensive measure to help mitigate the loss of consumer market share.
"RIM always thought they could define the consumer experience just like they defined the enterprise experience."
But that strategy didn't work because of Apple's and Google's ability to take a user's experience to a "different level," he said.
But Brigantine Advisors analyst Kevin Dede is more positive, saying there's an opportunity for RIM to change its perception in the marketplace with a "really neat, new design."
Dede notes that consumers want a big screen on their smartphones to watch video, a fast processor and lots of different software applications.
"I'm hopeful they've learned from some of their mistakes," said Dede, who's in San Francisco.
"The market is still growing hand-over-fist. It's a matter of can they do it right this time around or at least get closer to stabilize their handset sales."
If RIM can stabilize the situation, Dede says the generally sour opinion of the company's prospects could change.
"That can mean a lot of great things if you are somehow able to show consumers some neat, hot app that is really only available in the BlackBerry experience," Dede said, citing the success of the BlackBerry's instant text messaging service.
As RIM lost market share in the important and lucrative American market in 2011, sales in international markets grew.
But Wunderlich Securities analyst Matthew Robison said RIM will face more competition in overseas markets next year with the introduction of new, low-cost smartphones. Robison doesn't believe the new generation of BlackBerry smartphones will make much difference for RIM.
"I don't think their brand circumstances change in North America and I think they decay further overseas," Robison said from San Francisco.
Nor does he see the PlayBook as having any significance in the market.
"Nobody cares about the PlayBook since the quarter before last."
Robison said a recent service outage has done damage to BlackBerry maker in its business markets.
"The outage has expedited efforts to accommodate iPads and iPhones by IT personnel,'' he said.
National Bank financial analyst Kris Thompson says he thinks a turnaround is unlikely, even though many investors are expecting the company's new operating system to "resurrect" RIM next year.
"While we are cheering for this outcome, we have little confidence that any management team could save RIM in its current form," Thompson wrote in a research note.
Thompson says RIM's subscriber base will peak in fiscal 2013 as post-paid BlackBerry smartphone contracts expire and prepaid BlackBerrys become "archaic" compared with competing devices.
Technology analyst Carmi Levy says RIM should probably abandon its PlayBook tablet, on which its new operating system is based, but can't.
"It's about the future of a platform that now spans both tablets and handhelds and RIM is stuck with it for better or worse," says Levy, an independent analyst in London, Ont.
"RIM is essentially in defensive mode through the holiday season and through the beginning of 2012 until it can launch new products that can divert attention away from its current troubles."
With its hardware sales flagging, Huang suggests that RIM's salvation could lie in spending less energy developing hardware and more on its very successful
"On strategy, we believe RIM should consider opening its application suite (push email, calendar, secure browser) to other platforms and operating systems (e.g. Android, iOS), de-emphasizing hardware, and morphing into a software company," Huang says
"With this strategy, RIM will be a smaller firm but could get software-like valuation."
RIM closed out 2011 on a few final items of bad news, though they were more black eyes than body blows.
The company was forced to change the name of its new BBX smartphone operating system to BlackBerry 10 after the company lost a trademark ruling in the United States.
The head of Research In Motion's operations in Indonesia could be hit with charges related to a stampede at a recent BlackBerry promotional event that injured dozens of consumers.
And RIM fired two Canadian executives who were slapped with a big fine after their drunken rowdiness forced an Air Canada flight to Beijing to be diverted to Vancouver.
MONTREAL - BlackBerry maker Research In Motion will likely have but one goal in 2012: stop the terrible skid that started a year ago before it gets horribly out of control.
RIM (TSX:RIM.TO - News) enters the new year a very different company than the tech darling it was just 12 months earlier: stock price severely beaten down, PlayBook tablet branded a failure, sliding market share, ever hotter competition, a global server outage, continuing troubles with foreign governments.
It's no wonder the Waterloo, Ont.-based company's leaders, Jim Balsillie and Mike Lazaridis, have come under fire.
The road to recovery will begin with the launch of a new line of smartphones. But critics say even they will only help it catch up to the Internet-friendly Apple iPhone and Google-powered Android smartphones.
"I just don't see how these guys can turn the tide around," said analyst Anil Doradla.
"I don't think there's any strategic vision for them in 2012 that will turn the company around, short of them releasing an Apple-like experience or an Apple-like phone," said Doradla, of Chicago-based William Blair & Co.
With RIM losing 70 per cent of its market value year-to-date and announcing in early December that it will take a US$485-million charge before tax on the cost of discounting the price of PlayBooks and $50 million in lost revenues from an October service outage that affected millions of BlackBerry email and text users, "we believe the stakes for RIM have never been higher," says UBS Securities analyst Phillip Huang.
RIM stock hit a high of $140 per share in 2008. By early 2011, it had dropped to slightly under $70 a share, giving it a market capitalization just shy of $37 billion. By December, its stock was trading around $16, and its market value stood at $8.7 billion.
Huang says it's time for the company's board "to make a bold move," perhaps a change in leadership, a shift in strategy or some kind of corporate deal — including possibly the sale of the company.
"We struggle to identify a buyer with compelling strategic rationale, though any number of large-cap tech firms, may contemplate such a move (either in part or whole)," Huang says.
"To a potential buyer, RIM's enterprise footprint and patents on messaging/security may be appealing."
A lot is riding on a new operating system, now called BlackBerry 10, that will power the new RIM smartphones, expected to hit stores early next year.
Doradla views the rollout of new BlackBerry smartphones as primarily a defensive measure to help mitigate the loss of consumer market share.
"RIM always thought they could define the consumer experience just like they defined the enterprise experience."
But that strategy didn't work because of Apple's and Google's ability to take a user's experience to a "different level," he said.
But Brigantine Advisors analyst Kevin Dede is more positive, saying there's an opportunity for RIM to change its perception in the marketplace with a "really neat, new design."
Dede notes that consumers want a big screen on their smartphones to watch video, a fast processor and lots of different software applications.
"I'm hopeful they've learned from some of their mistakes," said Dede, who's in San Francisco.
"The market is still growing hand-over-fist. It's a matter of can they do it right this time around or at least get closer to stabilize their handset sales."
If RIM can stabilize the situation, Dede says the generally sour opinion of the company's prospects could change.
"That can mean a lot of great things if you are somehow able to show consumers some neat, hot app that is really only available in the BlackBerry experience," Dede said, citing the success of the BlackBerry's instant text messaging service.
As RIM lost market share in the important and lucrative American market in 2011, sales in international markets grew.
But Wunderlich Securities analyst Matthew Robison said RIM will face more competition in overseas markets next year with the introduction of new, low-cost smartphones. Robison doesn't believe the new generation of BlackBerry smartphones will make much difference for RIM.
"I don't think their brand circumstances change in North America and I think they decay further overseas," Robison said from San Francisco.
Nor does he see the PlayBook as having any significance in the market.
"Nobody cares about the PlayBook since the quarter before last."
Robison said a recent service outage has done damage to BlackBerry maker in its business markets.
"The outage has expedited efforts to accommodate iPads and iPhones by IT personnel,'' he said.
National Bank financial analyst Kris Thompson says he thinks a turnaround is unlikely, even though many investors are expecting the company's new operating system to "resurrect" RIM next year.
"While we are cheering for this outcome, we have little confidence that any management team could save RIM in its current form," Thompson wrote in a research note.
Thompson says RIM's subscriber base will peak in fiscal 2013 as post-paid BlackBerry smartphone contracts expire and prepaid BlackBerrys become "archaic" compared with competing devices.
Technology analyst Carmi Levy says RIM should probably abandon its PlayBook tablet, on which its new operating system is based, but can't.
"It's about the future of a platform that now spans both tablets and handhelds and RIM is stuck with it for better or worse," says Levy, an independent analyst in London, Ont.
"RIM is essentially in defensive mode through the holiday season and through the beginning of 2012 until it can launch new products that can divert attention away from its current troubles."
With its hardware sales flagging, Huang suggests that RIM's salvation could lie in spending less energy developing hardware and more on its very successful
"On strategy, we believe RIM should consider opening its application suite (push email, calendar, secure browser) to other platforms and operating systems (e.g. Android, iOS), de-emphasizing hardware, and morphing into a software company," Huang says
"With this strategy, RIM will be a smaller firm but could get software-like valuation."
RIM closed out 2011 on a few final items of bad news, though they were more black eyes than body blows.
The company was forced to change the name of its new BBX smartphone operating system to BlackBerry 10 after the company lost a trademark ruling in the United States.
The head of Research In Motion's operations in Indonesia could be hit with charges related to a stampede at a recent BlackBerry promotional event that injured dozens of consumers.
And RIM fired two Canadian executives who were slapped with a big fine after their drunken rowdiness forced an Air Canada flight to Beijing to be diverted to Vancouver.
Related Headlines
- The 2011 stock stories that shocked the market - goldengirlfinance.ca
- BlackBerry maker Research In Motion enters 2012 with a lot riding on its name - The Canadian Press
- Most actively traded companies on the TSX, TSX Venture Exchange markets - The Canadian Press
- TSX rallies on energy issues, U.S. data - Reuters
- Toronto stock market turns around earlier losses to close higher - The Canadian Press
NYTimes Co. agrees to sell regional papers for $143 mn
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The New York Times Co. said Tuesday it has agreed to sell 16 regional US newspapers to a Florida-based company for $143 million in cash.
The New York Times Co. said Tuesday it has agreed to sell 16 regional US newspapers to a Florida-based company for $143 million in cash.
The papers being sold to Halifax Media Holdings include five Florida-based papers, three California-based papers, three North Carolina-based papers, two Alabama-based papers, two Louisiana-based papers and one in South Carolina.
"These news organizations have served as trusted institutions in their communities, delivering news and information that matter most to their readers," Times Co. chairman Arthur Sulzberger said in a statement.
"The sale of our Regional Media Group will enable The New York Times Company to continue our transformation to a digitally-focused, multiplatform media company," Sulzberger said.
The statement said the transaction was expected to close "within a few weeks."
Michael Redding, chief executive of Daytona Beach-based Halifax Media, said the acquisition "reflects Halifax Media's belief that a good newspaper is an essential part of any vibrant community.
"The strong local news coverage these papers provide represents not only an important community service, but, in our eyes, a good investment," Redding said.
"When you have the opportunity to purchase solid news products located in great markets, it is very compelling, and we are excited to have the Group join Halifax Media," he added.
US newspapers have been struggling with declining print advertising revenue, falling circulation and the migration of readers to free news online.
The New York Times began charging in March for full access to NYTimes.com and it launched a subscription-only website for another Times Co. paper, The Boston Globe, in October.
Samsung, Sharp in LCD price-fixing settlement
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South Korea's Samsung, Japan's Sharp and five other Asian firms have agreed to a $553 million settlement for illegally fixing liquid crystal display prices, New York state's attorney general said Tuesday.
South Korea's Samsung, Japan's Sharp and five other Asian firms have agreed to a $553 million settlement for illegally fixing liquid crystal display prices, New York state's attorney general said Tuesday.
The settlement stems from antitrust claims brought by the attorneys general of eight US states and private class action suits, New York Attorney General Eric Schneiderman said in a statement.
It was the latest development in an ongoing price-fixing case over LCD screens that has already seen firms from Japan, South Korea and Taiwan agree to pay US fines totaling more than $890 million.
LCD screens are used in computer monitors, television sets and other devices.
According to Schneiderman, the seven companies -- Samsung, Sharp, Chimei Innolux, Chunghwa Picture Tubes, Epson Imaging Devices, HannStar Display and Hitachi Displays -- agreed to pay over $538 million to settle antitrust claims brought on behalf of consumers and government entities.
The settlement calls for Samsung to pay $240 million, Sharp to pay $115.5 million, Chimei to pay $110.3 million, Hitachi to pay $38.9 million, HannStar to pay $25.6 million, Chunghwa to pay $5.3 million and Epson to pay $2.8 million.
Five of the companies agreed to pay an additional $14 million to settle civil fines and penalties, according to the New York state attorney general.
"This price-fixing scheme manipulated the playing field for businesses that abide by the rules, and left consumers to pay artificially higher costs for televisions, computers and other electronics," Schneiderman said.
The settlement calls for the companies to pay up to $37 million in compensation to state governments and other public entities.
Another $501 million would be available to compensate consumers residing in 24 states and the US capital Washington who purchased products containing LCD panels between 1999 and 2006.
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