This seems to be going a bit off track from finance to technology sector but I guess its alright since they do overlap several times:). I am planning to talk about Apple's and Research in Motion's shares and earnings as well so there you go! Yesterday, I was reading a finance news page and saw an interesting article on the comparison between Apple and Blackberry smartphones. Research in Motion, which I'm sure many of you know, is the maker of Blackberry smartphones. The third quarter results for RIM is out and utterly disappointing with a whooping 71% fall in earnings to $265 million which is way, way lower than last year's $911 million. However, much of that drop was due to a $485 million pretax charge on the large number of unsold Playbook tablets. This has forced RIM to offer huge discounts on the tablets, which are not as loved as Apple's ipad.
The severity of RIM's situation is reflected in its share price which was a low of $13.12 on Friday(12.17.2011) after trading as high as $144 in 2008 and $70 as recently as Feb this year. At peak, the company that was worth $80 billion is now valued at just $7 billion. Just a few years ago, Blackberry was considered a status symbol and owned by 'very important and busy' people such as Wall Streeters, corporate lawyers and Capitol Hill staffers. Once a premier smartphone, it is now greatly overshadowed by Apple's iphone and Google's Android devices. The reason for this: RIM had unidimensional focus on user experience and the mobile market whereas Apple and Google focused on the consumer market. They went ahead to create dynamic, as well as consumer-friendly devices to send emails and browse the web. Another key point for their dramatic success: creating a platform on top of which developers could create applications. There are thousands of applications available for iPhone and Android devices.
Let's now look at the statistics of Apple's and Google's market share and share price. Today, Apple and Google jointly account for 71% of the U.S. Smartphone market and 83% among users who have downloaded 'apps' over the last 30 days. The average share price range for Apple in 2011 is $310.50-$426.7 and Google's is $473.02-$642.96. Given the tragic, sudden fall of RIM, there is a call for a new 'transformational leader' to replace CEOs Mike Lazaridis and Jim Balsillie. If there is a change in management, hopefully, the new leader uses strategic focus to help steer RIM in the right direction.
The severity of RIM's situation is reflected in its share price which was a low of $13.12 on Friday(12.17.2011) after trading as high as $144 in 2008 and $70 as recently as Feb this year. At peak, the company that was worth $80 billion is now valued at just $7 billion. Just a few years ago, Blackberry was considered a status symbol and owned by 'very important and busy' people such as Wall Streeters, corporate lawyers and Capitol Hill staffers. Once a premier smartphone, it is now greatly overshadowed by Apple's iphone and Google's Android devices. The reason for this: RIM had unidimensional focus on user experience and the mobile market whereas Apple and Google focused on the consumer market. They went ahead to create dynamic, as well as consumer-friendly devices to send emails and browse the web. Another key point for their dramatic success: creating a platform on top of which developers could create applications. There are thousands of applications available for iPhone and Android devices.
Let's now look at the statistics of Apple's and Google's market share and share price. Today, Apple and Google jointly account for 71% of the U.S. Smartphone market and 83% among users who have downloaded 'apps' over the last 30 days. The average share price range for Apple in 2011 is $310.50-$426.7 and Google's is $473.02-$642.96. Given the tragic, sudden fall of RIM, there is a call for a new 'transformational leader' to replace CEOs Mike Lazaridis and Jim Balsillie. If there is a change in management, hopefully, the new leader uses strategic focus to help steer RIM in the right direction.
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