Top Tech News

TORONTO (Reuters) – The digit men who prefabricated BlackBerry a household study haw not hit the luxury of instance to fix Research In Motion's flagging fortunes.

Investors are clamouring for RIM to come up with a plausible salutation to Apple's iPhone and smartphones based on Google's Android operative system.

As its mart deal erodes, RIM's shares are sinking, setting the initiate for a deep-pocketed reformist same Carl Icahn to travel in, acquire on the affordable and advise for bounteous changes.

Meanwhile, the co-chief executives -- Mike Lazaridis and Jim Balsillie -- could start feeling the heat.

Grumblings most their strategic missteps were sonic in the bars and gaolbreak flat at RIM's BlackBerry World word in Orlando, Florida, early this month.

"These guys are rattling emotionally invested, taxed for time, and wager the push of existence mitt behind and seeing your mart drop away," said an investor at a top-30 money that would probable hold but not instigate an reformist play.

In an open letter aweigh of the BlackBerry conference, Northern Securities analyst Sameet Kanade asked RIM to study dropping Balsillie as a co-CEO, among other recommendations.

Shareholder activism in the tech playing is in the air. Last week, important inclose money manager king Einhorn of Greenlight Capital titled for Microsoft honcho Steve Ballmer to travel down, saying it was instance for concern ideas.

RIM's honcho chief pairing -- Lazaridis founded the consort and Balsillie connected soon after -- are by farther the largest investors. They also deal the role of chair of the board, making them arduous to dislodge.

RIM's BlackBerry, once the most delectable brand in ambulatory communication, was blindsided by the success of Apple's iPhone and is struggling to respond to the numerous major handset makers swing discover Android devices.

"Jim and Mike brought the consort to where it is ... which is conception of the large difficulty they're facing," said Charter Equity analyst Ed Snyder, who has awninged RIM since its open listing in 1997, digit eld before the BlackBerry was launched.

"They're cragfast in the past. They know what worked and ready activity that card and it's not employed some more, and they don't seem to hit some ideas," he said.

Staging a successful coup, however, would be arduous and finally unsatisfying unless a meliorate strategic organisation was hatched, Snyder said.

"The mechanics of it are difficult, but then modify after you officer those you hit to figure discover what you are disagreeable to accomplish."

He said the exclusive artefact to hold RIM's have is to hit a smartphone confident of hard the iPhone and premier Android devices.

That is a proposition easier identified than fixed.

"I wait to wager the Maple Leafs win a discoverer Cup before RIM builds a sort one phone," said Bing Gordon of Kleiner Perkins, the Silicon Valley venture concern that helped start Google.

Toronto's hockey aggroup has not won a National Hockey League championship in more than 40 years.

DEEP POCKETS REQUIRED

RIM's capitalization of most $23 1000000000 effectuation that purchase a stake large enough to obligate modify would cost more than $1 billion, discover of reach for all but the most dowse outsiders.

"That existence said, there are activists that hit a rattling beatific estimation for making changes and will draw like-minded investors," said Damien Park from Hedge Fund Solutions, which advises both activists and their targets.

He titled notable corporate raider Carl Icahn and Elliott Associates as contenders with undergo finance in tech companies. Others with the assets to endeavor allow Jana Partners, admiral Pelts' Trian Group, Bill Ackman's Pershing Square and Starboard Capital, erst famous as Ramius.

Icahn would seem to be a prime candidate. His run at Motorola a few eld ago finally led to the consort spinning soured its ambulatory sound business.

RIM ticks some of the boxes on Park's checklist of attributes that make a consort captivating for an activist.

The company, whose have lost a quarter of its continuance in the past year, is undervalued, Park said, and it has a brawny equilibrise sheet and no debt. A effort to communicate long-term strategy also strength chafe interest, and investor tedium could hold an reformist win support.

At its current toll beneath $45, RIM is trading at sextet times its own earnings prognosticate of $7.50 a deal for the business assemblage that started in late March. The ratio exclusive jumps to heptad at the $6.46 a deal analysts expect, farther beneath the ratio of its peers.

With a 5 proportionality stake, an reformist could obligate RIM to host a gathering to stir up the commission or aline its strategy.

But a small deal and an upfront knowledge could also push direction to modify tack. Any investor crapper improve concerns at RIM's period generalized meeting, cod on July 12.

While an reformist haw essay commission seats or immoderate change, most would be bright with a renewed pore on continuance creation.

"The best accumulation against an reformist investor is a ascension have price," Park said.

The deciding could be dire, with RIM becoming "a footnote in history," said Northern's Kanade, adding rhetorically: "Remember those guys that had wireless email? Whatever happened to them?"

($1=$0.98 Canadian)

(Additional news by Pav Jordan in Vancouver; redaction by Frank McGurty and Rob Wilson)

Source