Investors were more or less stunned on Thursday, when RIM's quarterly results were released. Today, more hope emerged for the struggling company as share prices increased 8%, buying the company more wiggle space for the sales of BlackBerry 10 next year.
RIM has been ridden this entire year, and for some time before it, by pessimistic analysts and prophets of doom. Chief executive Thorsten Heins has kept his smile going the entire time, with what seemed inappropriate optimism. But now, perhaps, he will be taken a bit more seriously.
The quarterly results on Thursday was the first hint of hope for the company, but that glimmer turned into a ray of light when RIM's share prices rose more than 8 percent on Friday. This shows the kind of confidence increase that the quarterly results inspired in investors. It isn’t hard to imagine that this chain of favorable results could domino into even better circumstances for RIM.
Thorsten Heins, at BlackBerry Jam Americas, San Jose, CA
Of course, the company is hardly out of danger yet. "I have to admit they did a very good job making the best out of a really tough situation. You've got to give management some credit for that," said Sterne Agee analyst Shaw Wu, "but they still need to nurse the company back to health."
RIM can be seen now as a ship in the storm, with a breeze that has suddenly shifted in its favor. While the bright possibility of salvation has become more tangible, there are still obstacles to overcome, and a market to persuade. The medium for doing that is BlackBerry 10, something that tech readers will not be unfamiliar with.
As a hope for restoration, RIM stored up its cash reserves in order to market BlackBerry 10, and increase host phones' production. This is more or less the future and fate for RIM at this point. What remains to be done is to put BlackBerry 10 on the market, and make sure it sells. "If the gross margin profile stays where it is, then it is going to be very tough to be profitable, even if they sell a lot of BlackBerry 10 phones," notes Wu. In a market saturated with green robots and silver apples, RIM will have to send a clear message to the world, making them aware of the new phones, and why BlackBerry is different than anything else.
One thing is for sure though: with this newer "stability" (which is, in this situation, a valid but relative term), RIM has bought for itself some headroom it didn't have before, which should make its task of marketing BlackBerry 10 next year a rather more effective and simpler ordeal.