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David Callaway
Aug. 5, 2010, 12:01 a.m. EDT · Recommend (3) · Post:
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Sentiment conditions moderately favorable
By David Callaway, MarketWatch
SAN FRANCISCO (MarketWatch) -- As if having Steve Jobs breathing down your neck isn't bad enough, BlackBerry maker Research in Motion Ltd. added the hostile governments of two Middle East countries and India to its list of enemies this week.
Rather than enjoying the launch of its first touch-screen smart phone, the Torch, the Ontario, Canada-based company's executives found themselves on the Google end of a nasty international spat with authoritarian governments in Saudi Arabia and the United Arab Emirates, and then India. Now investors, already nervous about the future of their BlackBerrys in an iPhone world, need to decide what to do with shares of the company /quotes/comstock/15*!rimm/quotes/nls/rimm (RIMM 52.38, -1.01, -1.89%) .
RIM shares are trading at about a third of where they were two years ago, but still 30% off the lows they saw during the financial crisis in the fourth quarter of 2008, when bankers and all their wealth-making tools were considered headed for extinction.
Whether the Torch, which debuted to lukewarm reviews on Tuesday, can help the company reinvent itself for Wall Street will take some time. A key development will be the launch of a BlackBerry tablet device, reportedly later this year.
But even if it does prove a one-hit wonder, at least Research in Motion will go down fighting, sort of. Its refusal to provide the encryption codes for customers to Saudi Arabia and the U.A.E. was laudable, until it said that even if it wanted to it couldn't provide them, because it doesn't have them.
No reason to doubt it, but let's hope it doesn't buckle to pressure and propose a compromise that would make it look like Yahoo in China, or Google for that matter.
Research In Motion, the maker of BlackBerry devices, said while it will try to work with governments over security concerns, it will not provide access to encryption data. Video courtesy of Reuters.
The globalization of world economies and industries did not stop when Lehman Brothers collapsed. Rather, it became even more apparent to investors from Delaware to Dubai how connected we all are by money flows and interlocking deals. Why should U.S. mutual-fund holders care about whether Greece is insolvent? Because their money funds have been loading up on European bank debt since the financial crisis and European banks have a lot to lose if a new one hits, that's why. See MarketWatch story on money funds and their exposure to Europe.
Attempts by authoritarian governments to control communications -- from Saudi Arabia to China -- are ultimately a losing cause. Let BlackBerry users in Abu Dhabi switch to locally issued devices that the government can monitor. But please don't market Abu Dhabi as a friendly place to do business anymore.
Eventually money flows will begin to move away from unfriendly and unprofitable countries and the impact will be glaring. North Korean debt anybody? Until then, companies like Yahoo, Google, RIM and all the other innovators whose products are changing the world for the better should take the short-term hit and stand up whenever they can to anti-business practices that prevent free speech and communication.
It's hard to give up market share, especially with such hot competition and a product that's likely seen its heyday. But don't count RIM out yet. Even though its new Torch might not be the game-changer it had promised with a touch screen and social media organizer, all BlackBerrys still possess the best keyboards on the planet for sending emails. With Wall Street hiring again and financial jobs in general starting to bounce back, there is still opportunity to grow.
Too often the tech press writes the obituary of a pioneer well before that story is over. We've seen it with Google. We've seen it with Microsoft. And we've seen it with Apple. As long as bankers -- and journalists -- need fast and accurate email devices, RIM is in this game, even though its current share price suggests otherwise.
David Callaway is editor-in-chief of MarketWatch.
David Callaway is editor-in-chief of MarketWatch, responsible for the global news coverage of 100 journalists in 12 bureaus in the U.S., Europe and Asia. A financial journalist for more than 20 years, Callaway has worked for Bloomberg News, the Boston Herald, and assorted television and cable stations as a reporter, columnist and commentator.
The stock market's sentiment foundation continues to be robust enough to support at least moderately higher prices.
12:49 p.m. Today12:49 p.m. Aug. 5, 2010 | Comments: 10
- dafada3 | 4:12 a.m. Today4:12 a.m. Aug. 5, 2010
"BlackBerry enemies piling up for RIM: As if having Steve Jobs breathing down your neck isn't bad enough, Blac... http://on.mktw.net/96Lamq" 1:46 a.m. EDT, Aug. 5, 2010 from dcallaway
"Playboy and KKR in battle of the old-time brands: Hugh Hefner and Henry Kravis, two of the great success stor... http://on.mktw.net/doa5IE" 11:27 p.m. EDT, July 14, 2010 from dcallaway
"As Cup ends, Europe's real stress begins: David Callaway conducts his own stress tests, in the bars of Europ... http://tinyurl.com/3yh4gst" 9:28 a.m. EDT, July 14, 2010 from dcallaway
"As World Cup nears end, Europe's stress tests loom: David Callaway conducts his own stress tests, in the bars... http://on.mktw.net/b4IlDb" 6:31 a.m. EDT, July 7, 2010 from dcallaway
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