Does RIM get it?

The march of bad news for one-time investor darling Research in Motion (RIM-T) continued Friday. The company announced it would miss its financial targets after taking a writedown on its slow-selling tablet, the PlayBook. Many analysts now say the problems at the company may be too big to reverse.

Adnaan Ahmad, analyst at Berenberg Bank, said in a recent note to clients, that RIM's handset business is in the midst of what he calls "a handset 'death spiral'."

"The issue we have with RIM is that we do not see the BBX/QNX platform, which is supposed to be available in the second half of 2012, having any real impact in changing RIM's structural dilemma."

RIM announced on Friday that steep markdowns on its tablet will see it post a $360 million after-tax inventory writedown. It now no longer expects to hit its forecast for full-year adjusted earnings of $5.25 to $6.00. Revenue is also expected to miss previous forecasts of $5.3 billion to $5.6 billion.

"It's a disaster," Peter Misek Managing Director at Jefferies & Co, tells BNN. "In May and August [of 2012] -- when they don't have any new smartphones -- we think their smartphone sales could collapse…we just cut our earnings estimate for next year to $2."

Even with the writedown and lack of sales, RIM does not plan, at least publicly, to pare back its tablet ambitions.

"RIM is committed to the BlackBerry PlayBook," Co-Chief Executive Mike Lazaridis said in a statement. "Early results from recent PlayBook promotions indicate a significant increase in demand across most channels."

TIME FOR NEW LEADERSHIP?

Some analysts say the problems start at the top. Sameet Kanade, tech analyst at Northern Securities, tells BNN that the company needs to reevaluate its co-CEO structure in the wake of the many missteps by the company in the last two years.

"There needs to be leadership change," he says. Kanade believes a leadership could come as early as January when he expects a special shareholders meeting will push for a motion to break up the co-CEO structure.

Kanade maintains his recent upgrade on the company to a speculative 'buy' due to the company's profitable enterprise push-email business.

"Our upgrade was based on the services business, which is significantly undervalued," he says. "The speculative buy comes from our view that it may take the market a bit more time than we would like to start looking at RIM as a services company and not a handset maker." Kanade says he estimates RIM's enterprise business is worth more than $20 a share, compared to $3 per share for its handset business.

"Management mistakes aside, this is a company that does have strong earnings," he says.

Kanade warns investors should stay away from shorting the stock, saying simply "it is too cheap to short."