RIM (RIMM) Needs to Do These Two Things or It Will Die

December 19, 2011 1:00 PM EST
Research In Motion Limited (Nasdaq: RIMM) is a dead man walking.

Shares tapped a new multi-year low of $12.95 early Monday and are now sitting down 3.1 percent to $13.02.

The downside action follows last week's disappointing third-quarter results and lowered fourth-quarter outlook. RIM sees quarterly revs of $4.6 billion to $4.9 billion and earnings of 80 to 95 cents per share. The Street is looking for sales of $5.12 billion and EPS of $1.18. The company will also be delaying its new QNX operating system until later next year.

This was just the latest in a series of profit warnings from the BlackBerry maker.

RIM, once the crown-jewel in the smartphone space, has been completely dominated by Apple's (Nasdaq: AAPL) iPhone and Google's (Nasdaq: GOOG) Android. The company is now an afterthought in the space it founded.

With 75 million worldwide subscribers, however, all is not lost. Here are two things the company needs to do now to save itself:
  1. Co-CEOs Jim Balsillie and Mike Lazaridis need to step down. While the company is currently reviewing the roles of the two, it is too little too late. The two have sat idly by as the company melted down. They have destroyed billions in shareholder wealth. If this news was announced, shares would immediately jump by 10-20 percent.

  2. RIM needs to drop QNX and other operating systems and immediately adopt Google's Android operating system. RIM has missed the app-craze and is still holding onto a sub-par system. While the BlackBerry names still mean something, they need to hook-up with Android. A BlackBerry-Android would be a powerful brand combination that would go a long way to take back market share in the fragmented Android smartphone market. With the same price and features, would you rather buy an HTC-Android smartphone or a BlackBerry-Android smartphone? If this news was announced shares would immediately jump by 5-15 percent.

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