RIM Must Forget Everything Before It Can Recover

NEW YORK (TheStreet) -- Cognitive dissonance has a way of overtaking reality on Wall Street to the extent that some become highly disillusioned by what is in front to them.

This goes for investors as well as some of the best companies on the market. In Research in Motion's (RIMM) case, I think it's time for the company to separate what it wants from what is really possible.

This means it should forget about the past and focus on where it needs to go. It's not a crazy idea. It worked for International Business Machines (IBM).

There is no other company on Wall Street that has had to deal with as much adversity and disappointment as RIM. Even though Apple (AAPL) and Google (GOOG) might have sent it down the path of slow obsolescence, I tend to consider RIM's plight as the result of self-inflicted wounds, for the most part.

The fact of the matter is, a market leader always has the leverage. RIM, by virtue of its poor execution, gave the game away rather than having lost it. (I'm willing to give it that much credit -- deservedly or not.)

If one takes inventory of what has occurred over the past three years, we would see a stock that once traded in the $140s that recently reached as low at $6. RIM has become synonymous with failure and futility.

But can it be all over for RIM or is there light at the end of the tunnel? I'm starting to think that perhaps it is the latter.

I've recently made the argument that the company should be acquired by Facebook (FB). But this was more about what Facebook needs to do for its own survival. Acquiring RIM's mobile assets would help Facebook address its weaknesses effectively, particularly the monetization of mobile ads.

But absent such an acquisition, for RIM to emerge as a turnaround story I think it must first forget about everything that it knows, including smartphones. That's easier said than done.

The reason is simple: Should RIM stay on its current path, everything has to go right just for it to maintain some modicum of relevance. Also, its fate would be too heavily predicated on the potential slip-ups of its competitors, something that is not likely to happen since these companies have better marketing leverage and better management teams.

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