Research In Motion, the now infamous manufacturer of the once popular Blackberry devices is looking optimistic about the future and claims that it is not in a “death spiral”; but it appears that smartphone users are switching to other devices and even investors are gearing up for bad news. In fact, corporations who have been loyal to the Blackberry device are looking towards other devices for their employees and some have already began using Android phones. Despite the mounting bad news, analysts who are familiar with the Canadian company are of the strong opinion that it will not be out of business anytime soon.
Two years ago, the Blackberry amounted for a whopping 42% of the market share in the American market but that figure is now down to a mere 11%. A lot of companies are even looking towards the more expensive iPhone for their employees now. The recent bad news, about the loss in market share and the company’s first quarter loss of a whopping $518mln appears to have pushed more corporations to change sides amid fears about the company shutting down. RIM is the perfect example of how a company that fails to stay in tune with the trends and innovate can lose its advantage so quickly. One of the main reasons the Blackberry is no longer popular is because of the content rich Apple’s App Store and Google Play Store that offer a multitude of applications and other content.
It was said that the next generation of Blackberry devices, running the Blackberry 10 OS are likely to be the saviors of the company but RIM has announced a further delay in launching them and even said that about a third of its employees are going to be laid off as part of its cost saving plan with a target of $1bln. The CEO of the company had made recent statements that there is nothing wrong with the company and his confidence was probably fueled by the $2bln cash reserve and the fact that there is no debt. However, analysts believe that if the company continues to run, the cash balance will be depleted soon. Moreover, investors and critics alike are not happy with the delay in the release of Blackberry 10 devices. The only saving grace is that, though Blackberry has lost retail customers, it still accounts for 90% of corporate phones in the Fortune 500 list and has a strong back end infrastructure.
