Top Tech Stock; Research In Motion rolls through Mixed Playbook Reviews
  • Research In Motion roll-out; BlackBerry 7 Smartphones to Hit the Mobile Market
  • Research In Motion plunges on Disappointing Q1 FY 2012 Outlook
  • " />

    Top Tech Stock – Research In Motion hopes PlayBook will Boost Market Position

    Research In Motion Limited (NASDAQ: RIMM) reversed the downward trend that the company experienced in 2010 and increased 37% during this fall. The company is currently traded at $58.66, which is below the price of $65.93 reported at the beginning of 2010. The upcoming introduction of the professional-grade BlackBerry PlayBook tablet to compete with Apple Inc.’s (NASDAQ: AAPL) iPad is backing the price recovery.

    RIMM revolutionized the mobile industry with the introduction of the BlackBerry solution in 1999. Today, BlackBerry products and services are used by millions of customers around the world to stay connected to the people and content that matter most throughout their day. As of the end of August, the company has shipped approximately 115 million smartphones and has a subscriber base of more than 50 million.

    The company’s operating results were impressive. Revenue for Q2 FY 2011, ended August 28, 2010, grew 31% to $4.6 billion compared to Q2 FY 2010. RIMM’s net income for Q2 FY 2011 stood at $797 million, or $1.46 per share diluted, compared to $476 million or $0.83 per share diluted in Q2 FY 2010. During Q2 FY 2011, the company’s smartphone shipments neared 12.1 million, and approximately 4.5 million Blackberry subscriber accounts were added.

    RIMM has also announced that for Q3 FY 2011 it expects revenue to be in the range of $5.30-$5.55 billion and diluted EPS to be in the range of $1.62-$1.70. According to Reuters Estimates, analysts on average were expecting the company to report revenue of $4.85 billion and EPS of $1.39 for Q3 FY 2011.

    Despite the solid results and outlook, RIMM is currently traded at a trailing 12 months (ttm) P/E multiple of 11.29x, compared to AAPL’s ttm P/E of 20.24x and Google Inc. (NASDAQ: GOOG) ttm P/E of 24.00x. It is all about the company’s declining share in the growing smartphone market. The competition from both AAPL and GOOG Android based phones are eating away the market share from RIMM.

    According to Nielsen’s latest Mobile Report, AAPL has nearly caught up to RIMM in the U.S. smartphone market, with 28% and 30% of installed base, respectively. While, GOOG with Android is gaining fast and has 19% of installed base. The data for Q3 of calendar 2010 indicate that out of 21 million smartphone shipments in the U.S., GOOG’s Android shipped 43.6%, AAPL was second with 26.2% and RIMM came third with 24.2%.

    The major reason of loosing market share is the vast disparity between RIMM’s BlackBerry ecosystem, which tops out at about 10,000 applications and Apple’s iOS ecosystem, which boasts over 300,000 apps. As a result, RIMM’s strategy to develop a platform that would not require applications for the Web is not paying off, with users preferring mobile platforms with a wealth of applications.

    RIMM’s announcement to introduce its PlayBook, a tablet computer that mirror’s the design and feel of Apple’s iPad, has contributed to a slight recovery in the company’s stock price. The device would be priced at less than $500 when it hits the U.S. shelves in the first few months of 2011. The company has posted a comparison video between its upcoming tablet, the PlayBook, and Apple’s iPad (running iOS 3.2.2) and commented that the PlayBook is technically superior. However, PlayBook most likely will compete against the iPad 2, which is expected to be upgraded and could wear away the apparent advantage of PlayBook.

    The research company Gartner predicted that sales of tablets could grow from 19.5 million in 2010 to 208 million in 2014. This represents a huge market to service and could provide significant upside potential for RIMM. The huge base of Blackberry users could facilitate a rapid introduction and adoption of PlayBook, thus enhancing the company’s growth potential.

    About is committed to producing the highest-quality insight and analysis of small cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily on the underserved OTC stocks market, or penny stock market, which has traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them. Disclaimer

    This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. is a wholly owned subsidiary of BlueWave Advisors.

    While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

    Leave a Reply

    Your email address will not be published. Required fields are marked *