Research in Motion Financial Analysis

1. Background of the company and its industry

Research In Motion (RIM) is a Canadian telecommunication and wireless device company founded by Mihalis Lazaridis in 1984, headquartered in Waterloo, Ontario. It has offices in North America, Asia-Pacific and Europe. RIM is a leading international company in the mobile and wireless communications industry across the globe and it is the designer and manufacturer of the popular Blackberry Smartphone, used by mostly every businessperson on the planet. Also, the company develops software for the Blackberry phone that allows users to access the Internet and media through a wide range of applications. There are over 10000 software and handset vendors offering wireless data services worldwide using the Blackberry Enterprise Server.

The wireless communications industry, in which RIM competes, consists of three market segments, consumer market, prosumer market and enterprise market. The consumer market are those people who buy the devices for personal use, the prosumer market are end-users who buy for business and some personal use, and the enterprise market is characterized by wireless services purchased by IT and business management. The competitive environment for this industry is growing at a fast pace, and it is uncertain to what extent the key rivals of the industry, whether it is enterprise software vendors or key network operators, will seek to provide integrated wireless solutions.

2. Recent history of company performance

Briefly about the recent history of RIM’s performance, it can be said that they have done pretty well for the past three decades. By the late 1980s RIM had over US$1 million in revenue and a dozen of employees. By the late 1990s RIM’s sales grew to US$47.5 million and they completed their initial public offering on the Toronto Stock Exchange in 1998. In 2000 RIM’s Blackberry was named The Product of the Year. The reported revenue for 2001 was US$221.3 million and more than 12000...