RIM makes a step in the right direction

The BlackBerry maker taps into one of its remaining strengths.

By Motley Fool Pick of the Day Apr 4, 2012 5:05PM

By Evan Niu

 

It's a rare sight indeed: a good idea from Research In Motion (RIMM). The BlackBerry maker doesn't have very much to brag about these days, as it continues to report disappointing earnings amid an exec exodus.

 

One of the few bright spots to come out of Waterloo recently was its BlackBerry Mobile Fusion mobile device management, or MDM, enterprise service. Mobile Fusion is geared toward corporate IT departments looking to manage a slew of various devices, notably including competing smartphone and tablet offerings from Google (GOOG) Android and Apple (AAPL) iOS.

 

The service allows RIM to tap into one of the few remaining strengths it has left, enterprise security software, and apply it to the rising tide of Android and iOS. Gartner's figures for the fourth quarter showed RIM's market share slide from 14.6% to just 8.8% while Android and iOS combined jumped from 46.3% to a monstrous 74.7%.

 

Mobile Fusion has now officially launched today. It's a strange yet inevitable admission by RIM that it's losing traction in its enterprise and government fortresses that were once unassailable -- especially after RIM took so long swallowing its pride to replace its co-CEOs and co-chairmen when it was abundantly clear to everyone outside the company that the duo needed to go.

 

Software and services have been steadily trending higher as a percentage of revenue. Plunging hardware sales surely contribute, but RIM should recognize where its strengths lie. New CEO Thorsten Heins seems to be aware of this, as he signaled that the company is considering software licensing as part of its potential turnaround strategy, which coincides with those Samsung rumors.

 

Hardware OEMs already have plenty of OS licensing choices without adding RIM to the mix, but RIM needs to do something posthaste if it has hopes for any type of turnaround, which is clearly what David Einhorn is banking on.

 

Focus on software and services, RIM. It's your best bet, and Mobile Fusion is at least a step in the right direction.

 

Fool contributor Evan Niu owns shares of Apple, but no other position in any company mentioned. The Motley Fool owns shares of Google and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Google and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days
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