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Is Research In Motion Limited (USA) (RIMM) Back In The Game?

January 30th, 2013

Rimm research and motionDavid Zeiler: The RIM BlackBerry 10 arrives tomorrow (Wednesday) as the smartphone pioneer’s last best hope to reverse its decline, but at this point the most Research In Motion Limited (USA) (NASDAQ:RIMM) can hope for is survival.

The BlackBerry 10 is RIM’s last chance to fight back against Apple Inc.’s (Nasdaq: AAPL) iPhone, as well the wealth of smartphones that run Google Inc.’s (Nasdaq: GOOG) Android operating system.

Research in Motion has steadily lost ground to its rivals since 2008, when it held 20% of the global smartphone market. According to research firm IDC, the BlackBerry was left with just 4.7% in 2012.

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The loss of share is reflected in the company’s earnings, particularly last year. RIM hasn’t reported an operating profit for four consecutive quarters.

The change in fortune has wiped out the stock over the past several years. RIMM plunged from a high of $147.55 in mid-2008 to the $6-$7 range by late summer of last year.

But a preview of the BlackBerry 10 in September brought a little life back to the stock, driving it up over 180% to about $18 last week. RIMM has since slid back to $15.66 by Tuesday afternoon. Get A Free Trend Analysis For Research In Motion Shares Here!

Several analysts have helped restore some faith in RIMM by expressing optimism about the prospects for the BlackBerry 10 to revive RIM’s fortunes.

“While RIM has lost a huge amount of momentum and share, we also believe that the core installed base has been starved for a legitimate upgrade opportunity,” Peter Misek of Jefferies & Co. wrote in a research note last week. He also upgraded RIMM to a buy.

Those who believe the BlackBerry 10 could be RIM’s savior point to the installed base of nearly 80 million users.

“If only about a third of them buy this new phone, it will be a home run,” Eric Jackson of Ironfire Capital said recently on CNBC. He suggested RIMM could double by the end of 2013. “Apple can’t see that kind of return.”

But while RIM could see some success with the BlackBerry 10, it faces steep challenges that will prevent it from doing much more than holding on to what’s left of RIM’s market share.

The Challenge for the RIM BlackBerry 10

While many tech critics believe the BlackBerry 10 will turn out to be at least as good as, and in some ways superior to the iPhone and Android phones, that won’t be enough.

What won the hearts and minds of customers in BlackBerry’s heyday were such features as push email, data synchronization, proprietary instant messaging, and best-in-class security.

Android and the iPhone can do most of those things now, and have robust app stores to boot. RIM still has the lead in security, but Apple has closed the gap there, too.

Unwilling to wait for the BlackBerry 10, a lot of businesses, such as Yahoo! (Nasdaq: YHOO), have ditched the BlackBerry for the iPhone, and they’re probably not coming back.

What’s more, RIM doesn’t have the size – its market cap is less than $8 billion — to keep pace with the vast research and development resources of tech behemoths like Apple and Google.

And while RIM won’t be alone trying to claw back share from those two dominant players. Microsoft Corp. (Nasdaq: MSFT) is also in the middle of a push to reclaim a bigger slice of the smartphone pie with Windows 8 and its partnership with Nokia Corp. (NYSE ADR: NOK).

What the BlackBerry 10 Means for RIMM

Investors need to take hard, cold look at RIMM before they get too excited about where the BlackBerry 10 might take the stock. Get A Free Trend Analysis For Research In Motion Shares Here!

Short-term, a successful BlackBerry 10 could give RIMM a boost – and Ironfire’s Jackson could be right about it doubling by year’s end.

But if anything goes wrong with this product launch, including any technical glitches discovered by the early adopters, RIMM will sink back into the single digits in the blink of an eye.

And whatever success the BlackBerry 10 has will not be enough to propel the stock back to its 2008 highs, or even the $60 range RIMM was trading at just two years ago.

In the long run, the BlackBerry 10 will probably allow RIM to survive as a niche player in the smartphone market. Android and the iPhone are simply too dominant.

“RIM has an excellent shot at saving the firm with the BlackBerry 10,” said Money Morning Technology and Defense Specialist Michael Robinson. “If they focus on the installed customer base, execute against the plan, make sure they have the right senior leaders in place, and pounce on any opening they get, they can save the firm. But it’s not iPhone killer, that’s for sure.”

Money-MorningWritten By David Zeiler From Money Morning

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  1. Dave Hargraves
    January 31st, 2013 at 18:06 | #1

    so the answer to your question “in my opinion only” is no. and further more they changed the wrong name they should have dropped blackberry and kept RIM their new wrong handset should have the name RIM in bossed on it not blackberry. mind you this is only my opinion. RIM the three letters have more of Fortress look to it something like IBM does. i wonder if the new CMO thought of that one, ya know the guy that should had made sure that BB10 should have been ready for software download prior to BB10 launch,but did not. that would have made good marketing sense. but however this is only my opinion. Regards Freelance Eng.(designer of smartphone tech)

  2. Dave Hargraves
    January 31st, 2013 at 17:56 | #2

    here is a example of i know what im talking about. Wattpad is a type of a app that allowes people writing books to post them chapter by chapter while the story is being writen. well the blackberry playbook has this app. The QNX biult OS.that runs blackberry playbook requires you to pull down a tray (swipe down) then click on updates then click update the library,in the event that updates are available. Apples IOS has the same app but as you swipe to the next page of the story it automatically updates if need be. why dont Rim check out how the apps operate? and compare it to how other operating systems handle the same app? put it this way, do you flick a switch on your dashboard so your brake lites will illuminate prior to stepping on the brake?? regards Freelance Eng.(designer of smartphone tech)

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