Research in Motion vs. Shareholders: The Final Showdown

Research in Motion RIMM is expected to discuss its future plans tomorrow during the company's annual shareholders meeting in Waterloo, Ontario.

Assuming there are no delays, of course. Over the past several months, Research in Motion has gained a lot of attention for announcing multiple delays of its long-awaited mobile OS update, BlackBerry 10. Investors and analysts have been equally frustrated with the firm's decisions; over the past 30 days, RIM's shares have plummeted more than 20 percent.

Oppenheimer has been particularly critical of the BlackBerry maker, stating, "With BB10 now delayed to 1Q-CY13, we're concerned the North America subscriber base could be irreparably harmed and that international markets could follow."

RIM's troubles are nothing new. The company has been in turmoil since the day the first iPhone was released. At that time, BlackBerry was still considered to be the premiere smartphone brand among many business professionals. But in the last three years, Apple AAPL and Google GOOG overtook that market. During the same period, RIM shares lost more than 90 percent of their value.

When the company prepared for its shareholders meeting last year, Jim Balsillie (who was co-CEO with Mike Lazaridis at the time) was quoted in InformationWeek as saying, "We are currently approaching the tail end of a significant transition in our business, that, frankly, few companies would have survived."

That "significant transition" has not done much for the company. As The Globe and Mail points out, RIM's stock price was above $27 before last year's shareholders meeting, and the company's share of the American smartphone market was roughly 25 percent.

Today, RIM's market share has dropped to somewhere around 11 percent. Investors responded to the company's declines and product delays by abandoning the stock, which now trades at around $8 a share.

"RIM's prospects appear to be turning from bad to worse," Bank of America wrote in a report last month. "In our view, the risk of total value destruction over the next few years is possible as at this point we cannot see the light at the end of the tunnel."

RIM may not need a few years to fall apart. The embattled BlackBerry maker could face new competition if Amazon AMZN follows through with its plans to produce a top-tier smartphone. But Amazon's rumored entry into the highly competitive smartphone market pales in comparison to the damage that has already been done by RIM's existing competitors. Last fall, more than 37 million people purchased the iPhone 4S. Samsung is projecting that it will sell more than 10 million units of its latest smartphone, the Galaxy S III, by the end of July.

The same cannot be said for the PlayBook, RIM's last major product release. Designed to compete with the iPad, the PlayBook is a seven-inch tablet with technology that may have found its way into the first-generation Kindle Fire. RIM is not expected to release a new PlayBook anytime soon.

However, Amazon is expected to launch an all-out war on the tablet market by releasing three new Kindle Fires. Google is expected to shake up the seven-inch tablet market with its first device, the Nexus 7. And there is already talk of what the next iPad may be like.

The prevailing trend here is that RIM's competitors frequently release new products, while RIM does not.

Wireless Giant, which owns the only BlackBerry store in the United States, was hoping that BlackBerry 10 devices would bring customers back to the retail outlet. Without any new products to excite the masses, however, the store may not be able to survive.

In the end, the company behind the BlackBerry may not either.

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