Rim Research Paper

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Research In Motion|
Group Research Presentation
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GBA608/9 – Managerial Accounting for Decision Making – Fall 2011 - Dr. Salimi|

Nahin Choudhury, Roxanne Gutierrez, Jimmy Ho, John Miller, Laura Ornelas 11/27/2011
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EXECUTIVE SUMMARY

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Table of Contents
INTRODUCTION 4
HISTORY 5
PRODUCTS AND SERVICES 7
FINANCIAL PERFORMANCE 9
INDUSTRY ANALYSIS9
HANDHELDS9
GROWTH STRATEGY9
RECENT DEVELOPMENTS IN THE MOBILE PHONE INDUSTRY9
TABLETS9
COST ANALYSIS 9
COST ACCOUNTING METHODS 9
GENERAL 10
ELECTRONICS HARDWARE 10
SOFTWARE 11
SERVICE 13
OTHER 13
USE OF ACTIVITY-BASED COSTING AND ACTIVITY-BASED MANAGEMENT 15 ABC AND ABM OVERVIEW 9
ADVANTAGES OF ABC COSTING FOR RIM 10
MAJOR COMPONENTS OF OPERATIONS 23
EXPECTATIONS FOR THE FUTURE 31
CONCLUSION 33
REFERENCES 46
INTRODUCTION
Research In Motion (RIM) is a telecommunication company based out of Waterloo, Ontario, Canada. RIM manufactures innovative wireless solutions for business and personal consumers worldwide. RIM provides both a platform and solutions for seamless access to time-sensitive information which includes: e-mail, web, and SMS messaging (“Research In Motion,” 2003). RIM became a household name as market leader in the manufacturing pagers. However, the company gained notoriety as a global icon when it first released the BlackBerry and provided integration of corporate email to a device. RIM won many prestigious awards and honors for the Blackberry product line. RIM’s goal is reflected in its corporate statement of manufacturing innovative wireless solutions in both, the Smartphone and Tablet world. The purpose of this case study is to provide information on the history, products, financial performance, analysis, and expectations of future performance. HISTORY

Research in Motion was founded in 1984 by Mike Lazardis, who currently serves as one-of-two CEOs and two friends. Lazaridis dropped out of Waterloo in 1984, just one month shy of graduation, to start Research in Motion as a computer science consulting business with his childhood friend Doug Fregin who was a behind-the-scenes guy serving as VP of Operations until he retired in 2007. The two biked daily to their first office, a 500-square-foot space above a bagel store in a strip mall. One early application they created enabled businesses to conduct credit card transactions. In the late 1980s they helped develop technology that made for faster direct-to-video movies (Hempel, 2009). At that point, the trio started working on long-term contract with Rogers Cantel, Inc. which was a mobile and pager communications company. This contract required RIM to investigate potential newer wireless digital network systems being developed by Sweden's LM Ericsson (“Research In Motion,” 2003). Then they had the insight that would eventually make them billions. Watching Waterloo students eagerly embrace e-mail, they realized it would be the communication medium of the future and would eventually move to devices much like phones. A company that could provide those products would have an enormous opportunity (Hempel, 2009). In 1990, RIM developed a modem that was used by OEMs in products ranging from computers to vending machines. By 1991, RIM developed software to support a complete wireless e-mail system. RIM had a three-way partnership with Ericsson Ge Mobile Data Inc., and Anterior Technology that develop the system (“Research In Motion,” 2003). "We knew e-mail was going to be the foundation of business, that it'd replace fax," said Lazaridis. "We basically had to wait around and get ready." Unfortunately, they had nearly run out of money (Hempel, 2009). So in 1992, Lazaridis and Fregin turned to Jim Balsillie, a management consultant they had previously worked with on a failed project. Balsillie invested $125,000 for a one-third stake in the business. He took the co-CEO title and worked on fundraising (Hempel, 2009). It was not until 1996 that RIM began...
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