Archive for October, 2010

Last month, when Research In Motion unveiled PlayBook at the BlackBerry Developers Conference in San Francisco, there was no demo. The co-CEOs, Mike Lazaridis and Jim Balsillie, had done this sort of tapdance before. In the pre-BlackBerry days, when the then current model was called Bullfrog because it was so big, RIM came up with Leapfrog. It was much smaller, about the size of a deck of cards.

In 1997 Mike and Jim flew to Atlanta to show Leapfrog to executives at BellSouth. But all they had were two wooden models, each with a plastic screen and a pasted-on paper keyboard. You could turn the sidemounted trackwheel, but nothing happened. It didn’t matter. The grown men around the boardroom table took turns reverently holding the devices just as if they worked. BellSouth placed a $70 million order and RIM was well and truly launched.

The September audience in San Francisco  was not so easily amused. Then, yesterday, at the Adobe Developers Conference, Mike showed a real working PlayBook tablet complete with video from YouTube and other demos. “We believe the PlayBook is by far the most leading-edge BlackBerry device ever designed and the device could be a catalyst for the stock,” wrote Barry Richards, an analyst with Paradigm Capital, in a note to clients today. “With 50 million users, the device has a $20 billion potential market, even in just the BlackBerry installed base.” Richards, who has been following RIM since the days of Leapfrog, has a buy on the stock and a 12-month target price of US$105.

Mike’s demo sent RIM share price up more than 5 per cent yesterday and it’s heading higher again this morning. All of which proves in today’s world of reality TV, audiences want to see working models. The wooden ships of yore are not good enough for today’s highflyers.

Has Steve Jobs totally lost it? The cool guy in the black turtleneck who knows better than most how to market hardware seems to have gone a bit bonkers.

On the release of excellent numbers today which showed Apple’s profit up 70 per cent on iPhone sales of 14.1 million in the quarter (compared with 12.1 million BlackBerrys) Apple’s CEO decided it wasn’t enough just to crow, he had to castigate.

But first, the condescending warm-up lecture. “They must move beyond their area of strength and comfort into the unfamiliar territory of trying to become a software platform company,” said Jobs of Research In Motion. “I think it’s going to be a challenge for them.” As for the future, RIM is finished. Anyone who buys RIM’s PlayBook will need sand paper to sharpen their fingers so they’ll fit the 7-inch screen. “The 10-inch screen size is the minimum required to have great tablet apps,” he oozed. “We haven’t pushed [the iPad] real hard … and it’s being grabbed out of our hands.”

Let’s give Jobs his 10-inch moment. But the Greeks had a word for it … hubris. Pride goeth before a fall.

Everything you watch on TV these days seems to be sponsored by BlackBerry. Whether it’s Major League Baseball or Glee, Torch and BlackBerry Messenger are well and widely touted. The run-up to Christmas is, of course, a major time for retail sales, BlackBerry included, so promotional activity peaks.

All this activity is just as well. BlackBerry is losing its ranking as top dog in North American smartphone sales. Although BlackBerry remains number one in sales by an individual brand, recent market share figures show it has been eclipsed by Android when you take into account all of Android’s iterations.

To top it all off, The Globe and Mail this morning ran a story saying that Research In Motion is ripe for the picking. With a market cap of “only” $24.2 billion the company is increasingly affordable as a takeover target by Apple, Google, or Microsoft, according to the article.

With all the brouhaha over Potash Corp. falling into foreign hands, surely Canadians and their governments would not allow any such grab for RIM to go through. Selling off our natural resources (potash, nickel or petroleum) is bad enough, but worse would be to permit the takeover of that far more important natural resource, people, in particular the 8,000 employed by RIM in Waterloo out of a global workforce of more than 12,000. If such a takeover is launched and not stopped, Canadian entrepreneurs and workers will rightfully feel abandoned.

I like the redesigned Globe and Mail. Somewhere there’s a black-and-white photo of me, aged about six, crouched on the kitchen floor reading the Globe, spread out before me, so I’ve seen a few designs come and go.

This was not one of the usual rejigs, where sans serif type was switched to serif and a few column rules were dropped in where they didn’t exist before. No, this was the biggest upheaval I can recall.

Even so, there were those who dismissed last Friday’s launch as being derivative of The Guardian. All those naysayers were blown out of their snooty baths by the Saturday front that looked like an electrified pinball machine.

But will there be enough to read? Clearly, there is less than before. I’m glad to see features like Greg Keenan’s tad-too-long Saturday piece on Bombardier and Andy Hoffman’s excellent investigation today about how Investment Canada changes takeover rules to suit the foreign buyer.

However, I’m not a fan of foolish full-page graphs like yesterday’s ROB explanation of bank market share. The feature could have been done with a much smaller bar chart, leaving plenty of room for another well-written story.

But I’m afraid good writing no longer matters as it once did. Rick Salutin’s Friday op-ed column was axed because, he was told, “You don’t fit the redesign.” In the 1980s, when I was at Maclean’s, Editor Peter C. Newman ran Barbara Amiel’s column arguing that she needed to be heard as a rare right-wing voice.

Thirty years later, with the pendulum swung in favor of conservatives, Salutin was one of the last left-wing columnists in Canada. That alone should have been sufficient reason for him to continue.

But, as Jason McBride says in Toronto Life, the Globe used to be a writer’s paper, then it became an editor’s paper, and now it is a designer’s paper. And, I might add, an advertiser’s paper. On many pages of the new Globe, the most compelling presentation is the ad, just like the publisher would prefer. In such a format, the Globe cares less and less about the avid reader, kitchen floor or otherwise.

Mike Lazaridis and Jim Balsillie this week announced they will both be donating some Research In Motion shares to their respective foundations and selling additional shares. For Balsillie, about 800,000 shares are involved with half going to a charitable foundation. At $50 a share, that’s about $40 million.

The gift by Lazaridis is larger. He will be divesting 1,050,000 shares. Of that, 350,000 shares will go to the foundation with the remaining 700,000 shares sold over an 18-month period plus additional shares until the value reaches $200 million.

Some of the shares to be divested by the co-CEOs come from options that expire in January 2011. The rest are from current holdings, which remain sizeable. Balsillie owns 27.5 million shares, Lazaridis 29.2 million.

Add this activity to the $400 million they’ve already donated during the last decade to various new institutions and the two men are well on their way to meeting the recent urgings of Warren Buffet that billionaires give away half their wealth. At current prices, Balsillie is worth $1.4 billion, Lazaridis $1.5 billion.