Research In Motion was late in responding to what competitors were doing. They stopped taking the lead in introducing new products or entering new market segments.
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New York, NY (PRWEB) February 02, 2012
A recent Profit Confidential article reports that the co-CEOs of Research In Motion Limited (RIM) stepped down amid a falling stock price, poor investor sentiment, falling corporate earnings growth, and increased shareholder pressure to find a way to compete with Apple Inc. and Google Inc. Michael Lombardi, lead contributor to popular financial newsletter Profit Confidential, was not surprised to hear the news. He thinks that RIM can learn a lot from International Business Machines Corporation (IBM).
“I was not surprised to hear that IBM not only beat fourth-quarter 2011 estimates with its corporate earnings, but also painted a strong picture for 2012,” says Lombardi.
According to the Profit Confidential article, in 2004, IBM sold its personal computer business to Lenovo Group Ltd. “Some people were very surprised. IBM’s management team understood that the personal computer business had become a commodity business. Future corporate earnings growth would have to come from focusing on the services side of the business,” says Lombardi.
Lombardi contrasts IBM’s decision to RIM’s. IBM’s management team was proactive and responded to the changing dynamics of its industry. Lombardi points out, “Research In Motion was late in responding to what competitors were doing. They stopped taking the lead in introducing new products or entering new market segments.”
According to Profit Confidential, RIM is now in a reactive mode to what the market is already doing. “The stock is a very risky proposition here, in my opinion, because the next stage is going to be a critical one,” cautions Lombardi.
Lombardi stresses how important leadership and ingenuity are for a company’s success. He believes that most investors fail to look at these criteria when buying the stocks of public companies.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.