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RIM in the spotlight The guys that gave the world the smart phone are under attack on several fronts. But don't count them out just yet.
The past few months have not been kind to Research In Motion Ltd. . Its stock has plunged to below $30 from about $60 this year, analysts are increasingly bleak on the BlackBerry maker's fortunes after its gut-wrenching outlook, there were complications with the birth of its PlayBook, and its two chief executive officers are under intense pressure to split the roles of chairman and CEO.
Given its misfortunes in the stock market, it has also been a rumoured takeover target amid the fierce competition with Apple Inc. , the maker of the iPhone, and Google Inc. , whose Android operating system has been grabbing market share.
And now, Bloomberg News reported yesterday, RIM is leaking support among some app developers. (That includes one that develops apps for the Miami Dolphins, which isn't that big a deal given its record of late, and country star Taylor Swift, which is a bigger deal given hers.)
RIM promises better times, more excitement and a lot of apps. But everything put together still begs the question: Has the Waterloo, Ont.,-based company met its Waterloo?
There's no question that Canada's technology great has big challenges ahead. But investors would be wrong to think this company is down and out. So would its rivals, which probably aren't actually thinking that.
In its first quarter, RIM earned $695-million (U.S.), or $1.33 a share, diluted, down from $769-million, or $1.38 a share a year earlier. Revenue climbed to $4.9-billion compared to a year earlier, but fell 12 per cent from the fourth quarter.
When it reported those results earlier this month, RIM also slashed its revenue outlook for the second quarter, saying it expects revenue of only between $4.2-billion and $4.8-billion. It projected earnings per share of between 75 cents and $1.05 for the second quarter, and between $5.25 and $6 for the year.
What do the analysts say? National Bank Financial's Kris Thompson, for one, projects RIM's global market share for handsets will fall below 10 per cent, from about 14 per cent now.
But, as RBC Dominion Securities analyst Mike Abramsky put it earlier this month, the company with the iconic brand and a huge corporate base may be bloodied but not broken just yet.
"Although it's possible RIM fails to turn itself around, that outcome may be premature, given sustained positives like 68 million [subscribers] service growth, enterprise leadership, #1 share in several markets, healthy margins, cash flow," he said.
As Mr. Balsillie put it at the time, "we're currently approaching the tail end of a significant transition in our business, and quite frankly few companies would have been able to survive, but we have."
- Putting RIM back on the winning track
- Split RIM chairman, CEO roles, ISS urges
- Ruling out each of RIM's potential buyers
Greece in turmoil In Greece, the battle lines are drawn.
As the country's Parliament debates new, tough austerity measures tied to Greece's bailout money, protesters are in the streets today as a 48-hour general strike begins and demonstrators clash with police.
Greece must pass the new austerity plan, which includes massive cutbacks, asset sales and tax hikes, to get rescue funds from the EU, the European Central Bank and the International Monetary Fund. Athens is looking for €12-billion more from its original bailout, and a second rescue package that would carry it beyond that.
Getting the austerity measures through Parliament will be no easy task, and a vote is expected tomorrow.
Some observers believe Greece will be forced to default on its debts, despite the developments over the past few days.
And the Bank of England, for example, isn't taking any chances. Governor Mervyn King told a parliamentary committee today he is studying contingency plans, according to Reuters.
"What we're doing is to say there is sufficient concern in the market about the possibility of (a Greek) default for us to think about contingency plans and the consequences of this event," he said.
IMF could choose chief today France's Finance Minister Christine Lagarde could be anointed as the new chief of the International Monetary Fund as early as today.
The U.S. government is backing Ms. Lagarde, and that pretty much seals the victory over Mexican central bank chief Agustin Carstens.
"I am pleased to announce our decision to support Christine Lagarde to head the International Monetary Fund," U.S. Treasury Secretary Timothy Geithner said in a statement Tuesday. "Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy."
Ms. Lagarde has been travelling the world, drumming up support for her bid to succeed Dominique Strauss-Kahn.
Mr. Carstens has won the support of Canada, while Ms. Lagarde has won wide support in Europe, which traditionally holds the position.
The IMF's 24-member executive board meets today to discuss the race.
- Canada backs Carstens as IMF head
- Showboating on Carstens, or something new?
- Is France's Christine Lagarde the one to rescue the global economy?
Canadian beef headed for South Korea South Korea is again allowing Canadian beef inside its borders.
The country has banned Canada's beef exports for eight years because of concerns over mad cow disease. But, The Associated Press reports today, its Agriculture Minister has decided to allow imports of beef from young cattle.
Prior to the ban, South Korea was a large market for Canada, worth about $43-million (U.S.) a year.
In Economy Lab today How does one measure the size of Canada's underground economy - things like undeclared tips, under-the-table construction work or informal child care? Statistics Canada has given it a go, The Globe and Mail's Tavia Grant reports.
In International Business today Executives at the Japanese utility behind the nuclear power plant sent into meltdown by the March quake apologized today to investors who repeatedly interrupted the annual meeting of shareholders with heckles, yells and outraged questions. The Associated Press reports.
From today's Report on Business