What defines the smartphone space right now is a race to produce new products that answer questions more than just tech junkies are asking. The whole world–especially Asia and Latin America–wants new mobile features for their handheld devices. Pressure to compete in this race is intense, on the ground and in the popularity contest that is the stock market. Not even clean balance sheets, huge piles of cash and track records of industry-leading innovation satisfy investors, or even company insiders. 

Market research firm IDC forecast global smartphone unit growth of 55 percent in 2011 and for worldwide sales to approach a billion by the end of 2015. Smartphone makers shipped 305 million units in 2010, which should rise to 472 million this year. According to IDC, “The smartphone floodgates are wide open.”

Right now Research in Motion (TSX: RIM, NSDQ: RIMM)–Canada’s most important technology company–seems to be foundering.

It’s now been several months of profit warnings, product delays and a sliding share price for the company that essentially created the smartphone way back in the 20th century. Drama from this huge-money game spilled out onto the Internet this week, as a “high level” executive from RIM leaked an unsigned “open letter” to the tech-centric blog Boy Genius Report that eviscerated the company’s top leadership for failing to keep up with the times. 

RIM’s stock price dropped to below USD29 in June 2011, a far cry from the peak it reached in June 2008 near USD145. Shareholder value has been cut in half in 2011. In mid-June management announced a second-quarter revenue forecast of USD4.2 billion to USD4.8 billion, with earnings per share of USD0.75 to USD1.05 excluding one-time charges; both estimates are below Wall Street expectations. 

Much of the criticism leveled at RIM focuses on its leadership. The company is run by the guy who founded the company and now serves as one of its co-CEOs, Mike Lazaridis, and the guy he hired to help him run the business, Jim Balsillie. Mr. Lazaridis and Mr. Balsillie also co-chair RIM’s board of directors.

The Toronto Globe & Mail recently reported that, finally caving to outside pressures, the co-CEOs/co-chairmen have surrendered somewhat, agreeing to the creation of an independent committee of the board that will study the bipolar arrangement.

RIM introduced its first BlackBerry in 1999, turning founder Mike Lazaridis’ desire to send and receive e-mail on a cell phone into a communications revolution. Apple (NSDQ: AAPL) has since made a mockery of RIM’s mockery of its desire to put a computer on a phone. And, in turn, Google (NSDQ: GOOG), the search firm that’s redefined computing, is now causing headaches for its competitors while casting a monster shadow over a vulnerable Apple with its Android “software stack” for mobile devices. 

RIM’s setup provides an easy, unfavorable comparison to its recent better, Apple, and its seeming one-man show, Steve Jobs. Mr. Jobs’ health is a perpetual concern, however, and he has recently been on a leave of absence to receive medical treatment. It’s worth noting, too, that the biggest threat to Apple’s new era, Google, once struggled with the question of dual leadership, which resulted in Eric Schmidt’s successful run as CEO.

As Jim Fink astutely points out in his Investing Daily article, What’s Wrong with Research in Motion? The Answer is Not Apple’s iPhone, RIM’s descent from dominance to desperation in a matter of months is as much about vicissitudes of consumer demand and investor sentiment as it is about management. 

Yes, accepting the anonymous dispatch to BGR.com at face value Mr. Lazaridis and Mr. Balsillie have fallen out of step with end-users, and the challenge to recapture their imagination is undeniably difficult. But this is far from a question of competence–imagination, perhaps.

A business with no debt, billions in cash and a still-formidable market position–including dominance of the corporate market, where its secure, proprietary e-mail platform is a major plus–is a solid one. It may not be spectacular anymore, but that’s not what we’re focused on at Canadian Edge. We’re about building wealth over the long term. That’s about locking in high, sustainable yields at solid valuations.

RIM is likely a long way off from declaring its first dividend, but at these levels there’s a compelling value story, even potential for considerable upside should it become the target of a takeover attempt or its still-respectable development team hit the mark with its next smartphone or tablet. 

RIM, as management argued in its response to the anonymous letter posted at BGR.com, has CADD3 billion in cash, generated net income of CAD695 million and grew considerably in international markets in the first quarter–67 percent year over year. It shipped 100 smartphones per minute, 24 hours per day, during the first 12 weeks of 2011, a total of 13.2 million BlackBerrys.

It may not be as fast-growing in North America as it once was, but RIM and its BlackBerry still form a ubiquitous bramble. 

For complete, up-to-date coverage on Research In Motion as well as recommendations on over 150 Canadian high-yielding trusts and corporations, sign up for a risk-free trial subscription to Canadian Edge.

David Dittman is the editor of Canadian Edge and is a regular contributor on www.investingdaily.com.