RIMM didn't do their homework when the chose QNX as the platform for their latest product. I've been doing embedded software development for 23 years and I can say, without fear of contradiction, that QNX is the absolute worse POS product I've ever had the misfortune of being forced to work with. We finally chucked it and went with Nucleus. Piece of cake.
RIMM has poured a ton of R&D into using QNX with the final blow being the acquisition of QNX as a last resort to get support.
There were plenty of other open source operating systems they could have used with a lot more people to pull into the project because they have the experience. But not with QNX. Nobody uses QNX because they rape you with their price and annual renewal fees just to continue to use it in your product and they don't provide you any insight into the OS to keep you hooked like a junkie. You're hooked for good once you use the product unless you're willing to chuck it and start over with something else.
QNX will be the final death blow to RIMM.
DISCLAIMER: I have no position in RIMM. I just can't believe they went all in with QNX.
WTF? Since bb10 will never be released on time, it can not be considered a flop.
The rimm Pump & Drill Team will call it a "quality control premium release designed to maximize the customer's experience in coordination with state-of-the-art global design developments."
Or some other form of BS.
<I am not in love with RIM the company, I am in love with RIMM, the stock, that will most likely go up, because of the current valuation, the incredible upside and the minimal downside.>
This is a serious flaw in your investing logic.
Fundamentals trump technicals. Always.
RIM is a company that has poor fundamentals and its reflected in the stock. Look at the other "handset only" makers: Palm, Nokia, Motorola Mobile. They are either dying or dead.
This is because handset makers are a placeholder category. They were fine for their time, but now the computer people own the space. Microsoft and Apple will dominate the next decade. Again. Google's Android will be dismantled as the OEM's and Google won't afford the legal and licensing fees that are mounting everyday. Not to mention Google is not making as much on it as they had hoped.
<Bottom line: very little downside (-10% loss) with very large upside (40%-70%).>
What happens after BB10 flops? Your projected 10% loss will look like a huge gain.
And a good, intelligent way to phrase the "bull case."
I'd "quibble" by saying that you'd do well to assign probabilities to those 2 outcomes, and while we obviously differ, I'd rate the 40% gains (let's say by year end 2012) as 1 in 10 ... and the 10% decline at 50% plus.
My gut tells me that those numbers would suggest that being/going "all in" on this thing is not exactly well-calculated - i.e., smart.
We shall see, of course.
The last year has seen several showings of - "HEY, nobody's expecting a fun conference call" ... but "how come the stock's down 6% within 1-24 hours?!
And what's different this time? - NOT amazing growth in subscribers, eroding margins like last year.... THIS TIME, we'll see and hear RED on the call, ... and while it should be Thorsten's blood, it's probably just gonna be negative numbers. (But that strikes me as likely to translate into another bloodbath in terms of trading.
Remember, people like you who ask, "How much worse can it get? ... FROM HERE?!" ... still make a lot about "it's profitable!" "Look at their book value!" Take away point #1, and start to see (esp. with writedowns) #2 called into question, and you have an emperor's new clothes situation, imho.
"...YES, building a good product (as you saw, with hdw & software, principally) is probably less critical than good positioning, marketing, etc."
Sorry, but I couldn't disagree more. It doesn't matter how well marketing does or how well your previous products are positioned. As Apple well knows, it's all about "What have you done for me lately?"
Marketing doesn't mean squat if all you can deliver is delays or a subpar product. You'll get a few buyers up front but word of a poor quality product spreads like wildfire and then you have a big build up of inventory and dwindling sales. That's where I see RIM today.
I haven't followed RIM in a while and just checked in because they've been in the news lately. Admittedly, I was shocked to see the drop in price.
My investments acumen is just fine. I got out of the market within two weeks of it's top a few years ago. I'm conservative with my cash and have done just as well as an insider on IPO's and as an S-Corp principle.
I paid off my house in 2004, I paid cash for my SuperCrew, Harley, and Infiniti G37 (one sweet ride). I don't owe a dime to anyone except the tax man, insurance, utilities and grub.
This is just play time for me.
"Regardless, having the founder and other high profile people leave the company now is a major red flag"
And this has exactly what to do with the technical aspects of QNX? You're all over the place.
I notice that yet again, Mr. Unbiased, that you refuse to enumerate the technical deficiencies of QNX. You continue flauting your technical experience, yet you don't list a single fact. All opinion. Very unscientific of you, especially for an engineer.
"I just hate QNX because it's a POS IDE"
Who speaks like this? Certainly not a mature adult, let alone a professional. You're really in the tech field with such poor logic? Sad. "I hate this because it's terrible". lol. Yeah, ok Einstein.
Bottom line: QNX might have been a bad choice, but now that they've put all the time, effort, energy, and money into it...they aren't going to abandon it and it isn't the problem with RIM. Execution and poor management have been their main problems.
Even if I were to agree with your devoid-of-facts assessment of QNX, it is irrelevant at this point to the stock and the company. And if the implementation on the Playbook is any indication, they have an o/s that is just fine.
I stand corrected. Too bad - and not just in retrospect - that you didn't "monetize" your very negative feelings about QNX.
But it's obvious you're more an engineer than a well-informed investor.
Some of the people who've left RIM are (a) people who were pushed rather than people who jumped; and (b) "rightly so!" - Heck, what's the point of making a major change at the top if he doesn't have a free hand with other key hires and slots?!
And without being too "insider-y" - YES, building a good product (as you saw, with hdw & software, principally) is probably less critical than good positioning, marketing, etc.
Of course, if you fail on both counts, you have RIMM and it's crackerjack stock performance, but just as a surgeon often recommends cutting, because it's what s/he knows best, ... a person like you may think - "If only they had done it in Linux" to your enormous discredit.
That might have helped, but the likelihood that it would have "changed everything" is microscopic. Your headline is provocative - but I'm still going to guess wildly exaggerated.
"Of oourse, your post smacks of some kind of deceipt, since you all but identify yourself as a RIM employee and then say you own no stock.
That's a little hard to figure, but without getting into your motives or "bitterness," I'm going to assume that the core of your post is at least substantially true."
There's nothing to figure. I've never worked for RIM or QNX or owned the stock regardless of my jaded opinion of QNX. I just hate QNX because it's a POS IDE, OS and overall tool set. QNX is by far the worst product I've ever used in my 23 years as an embedded S/W engineer. It's that simple.
Integrating custom H/W with any embedded S/W application is much like black magic. You absolutely have to understand how the H/W works and write the S/W accordingly. Who knows, maybe the H/W is the problem.
You have to ask what changed? The H/W or the S/W. Going with a completely new OS is risky especially when it's QNX. QNX is my first guess based on 23 years of experience with it compared with other S/W tools out there.
Regardless, having the founder and other high profile people leave the company now is a major red flag. It shows a real lack of confidence in both the H/W and S/W groups and the overall design.
No hidden agenda or conspiracy. Just my opinion based on observation and experience.
Fair, objective article...
In summary, RIMM sucked the last few years (relected in share price), they will suffer for at least another quarter, they are now making drastic changes, some analyst say buy, where others say sell.
Other than the news about upcoming house-cleaning, it's just a recap of the obvious.
I am not in love with RIM the company, I am in love with RIMM, the stock, that will most likely go up, because of the current valuation, the incredible upside and the minimal downside.
The possible, yet unlikely, outcome is RIM regaining steam by themselves. FaceBook, Amazon or Oracle will purchase for strategical, growth. Apple or Google will purchase for spoiler, i.e., defensive strategy (obtain patents for bonus).
Bottom line: very little downside (-10% loss) with very large upside (40%-70%).
I'm all in!
hey! i like this post...well, i honestly think folks must be insane to short rimm at this price. they have some talented ppl, the company grows so fast so quick that some folks turn trash along the journey...im glad to see some cleaning up.
samsung came out with g s2 and it was a hit...lets face it...none of the phone the market right now can be completely holding the most productive and most creative phone as yet...hence, it is still too early in the game. i love the fact rimm is integrating car to tv to work into one making it superb: live, work and play! all in one!
apple put huge emphasis on their procurement and apps. these are rimm's opportunities to improve....at the end of the day, i believe mike is a very passionate entrepreneur...having heins's determination for change will take rimm to the next level...strangely enough, hes almost like a european steve jobs
-apple has lots of apps but they are identical or repetitive and junkie
-android apps' weaknesses maybe that people expect things to be free
-rimm's next app market has gotta utilize ads marketing or banking fees paid by vendors to attract programmers and earn extra dollars
hopefully, there wont be a crazy hostile bid to take out rimm, otherwise, without steve job apple and the samsung with younger leadership will definitely have a very strong competitor at core - rimm. the game has only just begun!
There are no more powerful letters in the alphabet than QNX!
QNX does not deserve the besmirching of this message board. It will revolutionalize life as we know it and will usher in a new wave of computing! Multitasking on a hand device will never be the same.