RIM shares hit 8 year low, drop 15% after release of Alpha Developer's handset

Since Monday, when BlackBerry World Conference opened in Orlando, the shares of RIM have dropped 15% to an 8 year low. On Thursday, shares of the Canadian manufacturer dropped as low as $11.92. To put that in perspective, back in the middle of June 2008, RIM's stock fetched nearly $145. That was one month after the introduction of the BlackBerry Bold 9000 and two months before the phone launched. Once the device hit the market, RIM's stock dropped 67% from a short term peak at $120 straight down to $40. The Apple iPhone 3G launch was not to blame for the decline as RIM's equity actually rose once Apple released its first 3G enabled smartphone. The implication is that RIM has shot itself in the foot over the years and has no one else to blame for its current position. In other words, the U.S. financial markets were more than willing to give RIM the opportunity to compete with other manufacturers, but finally gave up as investors fled the stock.

What is behind the 15% drop in the stock that has occurred in just the last three days? This decline started on Tuesday when RIM handed out thousands of free Alpha Developer's phones loaded with the new BlackBerry 10 OS. The idea was to give developer's the OS to help them write new apps for RIM's first BlackBerry 10 smartphonecoming to the market later this year. At the same time, RIM revealed some of the new features of BlackBerry 10 including a new "cascades" notifications system that allows the user to open up emails and BBM messages while remaining connected to a current task. The camera's new "time travel" feature allows users to use images kept by the software before a picture is taken. This way, if a subject of the photo is sneezing or has his eyes closed, a simple gesture on the phone's screen lets you replace part of the photo with a better replacement that is selected from the images kept before the picture was actually snapped.

Perhaps some of the decline in RIM's stock had to do with some disappointment in BlackBerry 10, and yesterday the introduction of the Samsung Galaxy S III showed off some new features such as the Pop Up Play, S Beam and S Voice which could have led some RIM holders to sell. But a big chunk of the sell off has to do with the mistaken idea that the Alpha Developer's phone is the actual device that RIM is launching as the first BB 10 smartphone. Mainstream media had reviewed the phone earlier this week as though the rubberized slab was heading to consumers. The concept of a developer's phone was apparently lost on them. Even more than a month before everyone gathered in Mickeyland for the conference, RIM had made it known that in no way, shape or form was the phone being handed out by the thousands on Tuesday, the actual handset being launched later this year. Heck, the dev phone doesn't even run the final version of BlackBerry 10.

Some of the reason for the decline in the stock is the unknown. Wall Street hates the unknown and while RIM did show off some new features for BlackBerry 10, we think that this is not what investors and BlackBerry fans want to see. What they want is to be assured that another BlackBerry Storm is not coming. You might recall that prior to the launch of the Storm, the handset's SurePress system was touted as making typing on glass feel like pressing a button on a real computer keyboard. The device was released with software that was not done baking and the whole thing became a mess for the company. What will save RIM and its stock is to offer features that any Android or iOS user can access right now. For example, the current flagship BlackBerry Bold 9900/9930 has some really nice additions thanks to BlackBerry 7 OS. Functions like pinch-to-zoom, a real usable browser and smooth as silk scrolling are things that BlackBerry users have long longed for (see what we did there?). But missing are things found on Android models like a front-facing camera, dedicated YouTube client (pressing the YouTube icon merely redirects you to the mobile version of the site), Adobe Flash and more customization.

RIM squandered a big lead it once had in the smartphone market by sitting back and thinking that its email technology and BBM would be enough. The company was dismissive of the Apple iPhone believing that touchscreen models were a fad and that no one wanted to type on glass. And now that company sees that it is wrong, it is trying to out do both Android and iOS and that is a major part of the problem. BlackBerry fans don't necessarily need the new BlackBerry 10 devices to have features that the others don't. No. BlackBerry users and investors could be ecstatic if the new handsets can merely match the competition feature for feature and let the email and BBM functionality take them over the top. The sooner that new CEO Thurston Heins realizes this, the faster RIM's stock will rebound.

source: BlackBerryOS, YahooFinance