RIM’s BlackBerry is finished, is Google’s Android next?

15 years ago

“Friday was a terrible day for Research in Motion’s (RIMM) shareholders and employees,” Michael K. Dawson writes for Seeking Alpha. “The stock’s 21% pummeling was the culmination of a series of bad management decisions that date back to first time the word iPhone was uttered in January of 2007. RIMM’s management snickered at the [iPhone] announcement. After all, RIMM was king of the mobile hill. It had a legion of fanatical customers. Its market share was growing like weeds. All was good.”

“Four years later, management still believes it’s 6 months away from a viable response. In the mean time, I carved out a few bucks on the short side,” Dawson writes. “Not nearly as much as I should have, but I am ready to move on to the next casualty in the smartphone wars.”

“Google’s secret sauce is under attack. Android manufacturers love it, because it’s a much better OS than they could design and the price is right – $0. Google gives Android away hoping to make money from ads,” Dawson writes. “Well – free is not free anymore. HTC pays Microsoft a $5 fee for every Adroid device it sells as part of a patent settlement between the two companies. Microsoft has also filed a lawsuit against Motorola claiming their devices infringe on nine patents. Microsoft is also pursuing patent deals with other Android manufacturers including Acer and ASUS.”

Dawson writes, “Oracle (ORCL) is also getting into the mix. A filing from Google hinted that Oracle wants more in damages than Android has earned in its entire existence… Worse yet it’s entire mobile revenue/expense structure is upside down. Although Android is growing like wildfire, Google’s share of profits is not growing proportionally. It has effectively become the software R&D department for Android manufacturers in exchange for a hope that an end user will click on an ad… IMO, the amount of money that it has/will spend is not commensurate with its return.”