How RIM Can Survive After BlackBerry

Research In Motion (NASDAQ: RIMM ) got a pleasant surprise on Tuesday:
Bernstein Research analyst Pierre Ferragu upgraded RIMs rating from underperform
to market perform. Ferragu said in his note to investors that while he thinks
RIM is in a death spiral, theres still some value in the stock. RIM shares in
turn saw a modest boost, climbing from around $16.40 to just below $18, back
above the support level of $16.95 after sinking below it in the past week to a
52-week low of $15.98. The stock has declined 70% in the past year. So, even the
faintest praise from Wall Street is good news for RIM. For a while as smartphone
users both regular consumers and RIMs once-reliable business audience
abandoned the BlackBerry for Apple s (NASDAQ: AAPL ) iPhone and devices powered
by Google s (NASDAQ: GOOG ) Android operating system, Wall Street at least
maintained interest in RIMs stock. Not anymore. Bernstein Research may have
upped its rating for RIM, but the chorus of other analysts downgrades is
deafening. In recent weeks, Deutsche Bank, Citigroup, RBC Capital Markets,
Barclays and JPMorgan Chase have all called investors to either sell RIM or at
least stay neutral. Stern Agees Shaw Wu downgraded it from buy to neutral on
Tuesday , slashing his 2012 and 2013 earnings expectations, just as Bernstein
upped its rating. Canny investors know that when theres smoke, theres fire. The
Tuesday uptick from RIM is likely to be a bitter memory come the companys Dec.
15 earnings call. Considering the catastrophic failure of the PlayBook tablet
and milquetoast sales of the new BlackBerry Bold phones, RIM may tumble to price
levels not seen since 2003. Heres something to consider, though. RIM announced
what may ultimately be its most significant release going forward. It wasnt a
new BlackBerry phone or a new tablet. It announced Mobile Fusion. Coming in the
first quarter of 2012, Mobile Fusion isnt a new device at all but a new security
service and app for RIMs business clients that works on the iPhone, iPad and
Google Android devices. The service would allow corporate IT departments to
monitor and protect phones remotely, and it would keep RIM in the enterprise
network service game without needing to rely on BlackBerry phones, the PlayBook
or the BlackBerry operating system. RIM will announcing pricing and release
information for Mobile Fusion early next year. And theres a roadmap for RIMs
future. Even if it remains a player in smartphones as a manufacturer, the days
of RIMs growth are over. Gartner expects RIMs share of the global smartphone
market to shrink to just 11% by 2015 . Unless theres a miracle consumers latch
onto a new BlackBerry device to an obsessive degree, Apple bows out of the
mobile market RIM is done in the hardware business. Loyalty to the BlackBerry
brand has crumbled. Brand Keys placed BlackBerry at No. 9 among the most trusted
brands in 2010. For 2011, its ranked No. 60 . RIM still holds some cachet among
businesses. If the company downsizes its operation on a massive scale over the
next five years, ceasing device production altogether and focusing purely on
services like Mobile Fusion and others for corporate clients of all sizes, it
could very well survive as a public company. However, investors who were once
enamored with RIM as a cult stock need to finally give up the ghost. Like
BlackBerry once-commanding share of the mobile phone market, the lofty days of
RIM trading around $150 are never coming back. As of this writing, Anthony John
Agnello did not own a position in any of the stocks named here. Follow him on
Twitter at