Research In Motion(RIMM-commentary-Trade Now) got walloped last Thursday. After the company lowered its full-year earnings guidance, the stock dropped more than 20%. The stock has seen over half its value eviscerated in the last three months. In late December, I interviewed RIMM bull George Papageorgiou of Scotia Capital in adiscussionthat appeared here inRealMoney. At the time, George still had a $130 price target and told me that the bears (like me) were missing RIMM's tremendous growth potential from international markets.
He said that other market observers were overly fixated on RIMM's problems in the U.S. I countered that I believed the market was correctly anticipating that the U.S. was foreshadowing RIMM's future in other markets, rather than being an exceptional case.
Few people remember that last October,Apple's(AAPL-commentary-Trade Now) Steve Jobs made an unexpected appearance on that company's earnings call, staying for the entire call, including the Q&A, which is somethingGoogle's(GOOG-commentary-Trade Now) Larry Page could learn from.
The Apple call was notable for some comments Jobs made about Research In Motion. He basically pronounced RIMM dead on arrival as a company. He said that Apple had now passed RIMM in terms of number of quarterly units shipped. He said that Apple was a software company while RIMM was a hardware company. He surmised that RIMM would never be able to regain its momentum, now that Apple had passed it.
You might not remember all the specifics of the call, but you probably remember that RIMM co-CEO Jim Balsillie went apoplectic and maligned Jobs for trying to perpetuate the "Apple distortion field."
Well, here we are eight months later, and basically everything -- and I mean everything -- that Jobs said about RIMM has come to pass. RIMM resembles a passenger from the Titanic flaying wildly in the cold Atlantic Ocean. It has some plans that it hopes will rescue it by late 2012, but by then it will likely be way too late.
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