Let's start with some annoying facts:
- Research In Motion is still profitable.
- BlackBerry is still gaining customers.
The reason they still make money and companies are still buying their devices are actually pretty reasonable:
- BlackBerry works as well as the competition for the things a business buys them for: Phone calls, email, calendar and contacts. They even have devices without cameras which for many businesses is a requirement.
- Basic BlackBerry devices (Bold, Tour, etc) tend to be more durable. Our experience has been that they can last 4 years of heavy use, or about double what an iPhone or Android will normally last.
- Corporate environments would prefer that their employees not install a bunch of stuff on their phone since that data charge gets a lot higher when they are watching Netflix.
- BES (BlackBerry Enterprise Server) allows fine grained control of everything on the device at a level the competition does not offer.
- BlackBerry security is second to none with every packet of information being encrypted on their personal network.
- BlackBerry devices can also securely access applications on the trusted network of the company.
So while consumers have long left the BlackBerry world it makes sense that many businesses are sticking with them. That is a huge prize of large customers loyal to a set of devices that are years behind the competition. Add to this a nice mess of patents and that BES software that businesses love and you can see the value.
Even more exciting is that RIM is profitable with a ridiculously low PE ratio that is almost unheard of in the tech industry. This number shows the total value of the stock in multiples over earnings, so the lower the number the better. Apple has a relatively low ratio of 14, Google is 21 and Amazon is clearly an over priced stock at 94. Research In Motion is trading at 3. Despite earning a profit the investors have already priced the company to fail.
There are countless organizations that I can see being quite successful taking over RIM - from software vendors like Microsoft to hardware vendors like Samsung and every company in between. It really does not matter who buys them as long as they are willing to either clean house to enjoy the profits of existing customers or develop a new product offering within their own corporate gifts. Either way, the BlackBerry looks like a very tasty purchase.