Here’s How Research in Motion COLLAPSED After Dominating the World

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Research in Motion (NASDAQ:RIMM) has become the butt of many a joke in the tech world, but it was not too long ago that the smartphone maker was on top of the world. It was in June 2011 that the company announced its prediction that, for the first time in nine years, quarterly revenue would drop. The market soon followed, with shares falling to their lowest point since 2006.

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Of course, RIM’s shortcomings were old news by that point. From June 2008 to June 2011, RIM Shareholders lost almost $70 billion, or 82 percent, as the company’s market capitalization dropped from $83 billion to $13.6 billion. The decline forced the company in July 2011 to cut 2,000 jobs, the biggest lay-off in its history, reducing the workforce by around 11 percent.

Apple (NASDAQ:AAPL) was largely to blame for RIM’s misfortunes. The BlackBerry, at once both archetypal and ubiquitous, forfeited its role at the center of a growing industry and in pop culture — widely referred to as a “CrackBerry,” the smartphone was once the subject of as many jokes as Siri, Apple’s voice assistant on the latest iPhone.

Apple posed some serious competition, but its smartphones were expensive, and limited to AT&T (NYSE:T) mobile subscribers until early 2011. But around the same time the iPhone came out, Google (NASDAQ:GOOG) entered the mobile space with its Android operating system, an open-source platform that allowed smartphone makers to develop their phones around it, rather than creating their own, as both Apple and RIM continue to do to this day.

While competition in the smartphone market has been fierce — Microsoft (NASDAQ:MSFT) has been upping its game recently as well — RIM’s share fell for one reason and one reason alone: innovation, or rather, it’s lack thereof.

Apple has been ready with countless iPhone updates, both to its operating system (now up to iOS 5) and its phone (the current iPhone 4S is Apple’s fifth model), often before there’s any demand from the public for something new, making its own devices and software obsolete before the competition gets a chance to do so. Meanwhile, RIM seems to still be stuck in 2007. And its efforts to come into the present have been laughable.

Apple beat everyone to the tablet space, which it continues to dominate by a wide margin, but RIM’s answer to the iPad, launched more than a year later, was widely seen as a pathetic attempt to break into an up-and-coming space without putting in the work. Need it be said, the BlackBerry PlayBook never got off the ground. Meanwhile, Amazon (NASDAQ:AMZN) has posed the worthiest competitor in the tablet arena with its Kindle Fire, launched late in 2011.

RIM may not be able to take comfort in this fact, but at least it’s still at the top of one list, keeping the company visible if nothing else. That list, unfortunately, ranks the biggest market share losers in 2011. Last year, RIM’s share of the U.S. smartphone market dropped to just 3 percent, from 9 percent a year earlier. Meanwhile, Samsung and HTC are booming with Android, Microsoft is slowly growing its own share, especially overseas, and Apple’s iPhone remains the top-selling smartphone.

Investing Insights: A.M. Buzzers: RIM Negativity Hurts Investors, Apple’s Stealth Secrecy.

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