MicroStockProfit » rimm

Research In Motion roll-out; BlackBerry 7 Smartphones to Hit the Mobile Market

Editor — Wed, 03 Aug 2011 20:52:59 +0000

Research In Motion Limited (NASDAQ: RIMM) today announced its plans to launch 5 new BlackBerry smartphones, which will be based on the BlackBerry 7 Operating System.

The plans to launch new BlackBerry smartphones follow the company’s recent struggle to keep pace with competitors and mobile devices, including iPhone and Android-based smartphones. The company recently announced it will cut jobs to reduce its costs.

RIM will roll-out two new BlackBerry Bold and three new BlackBerry Torch models, all of which will run on the BlackBerry 7 operating system, representing the company’s largest global launch ever. More than 225 carriers and distribution partners have already started or completed more than 500 certifications programs for the new smartphones.

Mike Lazardis, president and Co-CEO of RIM, said that the BlackBerry solution provides best-in-class mobile communications experience that customers love and the company thinks they will be thrilled by the faster performance, enhanced browsing and richer multimedia delivered by the new smartphones.

RIM’s failure to maintain its smatrtphone market share has mainly been blamed on the delays in product launches. Therefore it is no surprise that today’s announcement lifted RIM shares. At last check, RIM shares were trading 5.29% higher at $25.43.

Although the reaction from investors to the launch of new smartphones has been positive, most analysts don’t share the same excitement. Analysts at brokerage MKM Partners said that the launch of new phones will not have any major long-term implication, and that the new Bolds and Torches will not really turn the ship around at RIM. Caris analysts also echoed MKM’s views, saying they do not expect more than a couple quarters of upgrade before new phone execution matter again.

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Research In Motion sinks after Management Recognized Weaknesses

Admin — Mon, 20 Jun 2011 13:11:45 +0000

Research In Motion Limited’s (NASDAQ: RIMM) shares plummeted 22% last Friday to $27.75, the company’s lowest price since 2006. The plunge came after RIMM reported disappointing results for its Q1 fiscal year 2012 and cut down its full-year guidance.

Net income decreased to $695 million or $1.33 a share for Q1 fiscal year 2012, compared to net income of $769 million, or $1.38 per share, for the same period the previous year. Revenue grew by 16% to $4.9 billion from $4.2 billion in Q1 fiscal year 2011. During the quarter, RIMM delivered 13.2 million Blackberry smartphones and 0.5 million Playbook tablets. Analysts polled by Thompson Reuters had been expecting earnings of $1.32 per share on revenue of $5.15 billion for the period. The sales of Blackberry smartphones were bellow the low-end of analyst outlook, while the sales of Playbook were ahead of analyst’s average estimate of 400,000.

Moreover, the company confirmed the continued weakness in its line of BlackBerry handheld devices, and revised downward the outlook for fiscal year 2012. RIMM now expects earnings to come in the range of $5.25 -$6.00 per share, compared to consensus estimates of $6.31. The company had previously maintained a full-year EPS forecast of $7.50.

Last April, the company has warned of weaker results for Q1 fiscal year 2012, however, reiterated a strong guidance for full year. However, following a number of industry reports, which confirmed that Blackberry smartphones are rapidly losing market share, analysts covering the company applied significant downward corrections to their earnings expectations expressing concerns about the reliability of management’s guidance. Accordingly, the recent news has confirmed the company’s weakness and shrinking customer base.

As a result, the stock had already lost more than 55% this year, losing the speed to Apple’s (NASDAQ: AAPL) iPhone and Google’s (NASDAQ: GOOG) Android platforms. RIMM, which invented the smartphone and leaded the market for about a decade is currently trying a comeback and playing catch up with its bigger rivals.

A report from Nielsen is indicating that Android users now make up 43% of those who bought a phone in the past six months in the United States. BlackBerry buyers have had their share almost cut in half from 38% in fall 2009 to 20% last year. The iPhone’s share has remained unchanged at 26% in the first quarter of 2011.

Globally, Gartner reported that Android’s market share increased from 10% in Q1 2010 to 36% in Q1 2011. Simbyan’s market share dropped from 44.2% to 27.4% for the same period. The iPhone share has nearly doubled from 2.3% in Q1 2010 to 4.0% in Q1 2011. While Blackbery’s share stagnated at 3%.

As a result, RIMM announced significant downsizing plans by reducing the workforce and optimizing expenses. The company has also said that it would delay the release of the next Blackberry with QNX software for 2012. It is probably the company’s last chance to convince investors that the new handheld device would be competitive and stop the sales decline in the United States. The current portfolio of BlackBerry smartphones has been in the market for nearly a year and delivering new products has proven very challenging to RIMM.

With a market capitalization of less than $15 billion, RIMM has become an interesting takeover target being traded at nearly 4.5 times the last twelve months EPS. This is very cheap comparing to the valuation of Apple and Google, which are traded at 15 and 18 times their trailing twelve months EPS, respectively. Despite cheap valuation, RIMM’s business is still generating steady profitability, double-digits growth, as well as stellar growth in the international markets. In addition, the company’s Blackberry smartphones maintain leading email and messaging functionality and succeeded to integrate a valuable base of 60 million subscribers that generate a significant stream (20%) of recurring revenue from services.

In addition, there are significant rumors that position RIMM as an interesting takeover Target given the discounted valuation. While, further market share losses could take a toll on RIMM’s valuation, the company’s recovery chances are highly related with its capacity to “cook” the next Balckberry device, which in turn should, at least, equal the functionality of the iPhone and Android rivals.

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ZAGG keeps going – spurred by Patent Award and Investor Sentiment

Jay Geller — Mon, 13 Jun 2011 13:32:14 +0000

ZAGG Inc. (NASDAQ: ZAGG) had two extremely strong days to wrap up last week’s trading after the company that it was granted a new patent directed to protective covers for electronic devices such as full body invisibleSHIELD products. The stock soared 13% over the period, setting a new all time record of $11.98 during the intraday trading on June 10, before closing the session at $11.63. Shares continued to climb this morning, surging more than 6% at market open.

The recent patent award allows ZAGG to better defend its approach to protect electronic devices and could be a useful tool in competing against the developments of other payers. Going forward, the patent protection could facilitate the establishment of long term partnerships between ZAGG and manufacturers of smartphones, computer tablets or other electronic devices to tie the sale of invisibleSHIELD products with the sale of these gadgets. If the company succeeds to partner with a major player like Apple (NASDAQ: AAPL), Samsung or Research in Motion (Nadaq: RIMM), its stock price could skyrocket.

The company’s shares gained more than 50% since the beginning of 2011 on solid results for 2010 and Q1 2011 that smashed analyst estimates. Besides, the introduction of a new line of ZAGGskins protective accessories designed to match Apple’s new iPad 2 device as well as the master license and distribution agreement with Logitech (NASDAQ: LOGI) for its tablet accessory, the ZAGGmate case with keyboard, have also contributed to recent appreciation.

ZAGG is a leader in providing clear and scratch-proof covers for smartphones, computer tablets, and iPod touch media players. The company’s products are distributed worldwide with popular brands like the invisibleSHIELD, ZAGGskins, ZAGG LEATHERskins, etc. As the demand for smartphones and tablets has grown, ZAGG has benefited from increasing need for its products, especially the shields it makes to protect devices from scratches.

Revenue for the first quarter increased 207% to $27.0 million, from $8.8 million in the first quarter of 2010. Net income reached $3.3 million, or $0.13 per share, as compared to net income of $0.8 million, or $0.03 per share, in the first quarter of 2010. ZAGG benefited from new product launches, the introduction of popular new devices such as the iPad 2 from Apple (NASDAQ: AAPL) and other new mobile device introductions as well as continued strength in internet channels.

Going forward, ZAGG revisited upward the outlook for 2011 due to better sales of its products on expanding product distribution and reach. The company now expects revenue for 2011 to range between $100 million to $105 million from a previous estimate of $95 million to $100 million. In addition, ZAGG expects gross margin for this year to be in the mid-to-upper 40s, and raises the range for operating margins to 21%-23%, from the previously given range of 19%-22%.

The market trends are also favorable to ZAGG. Consulting firm Deloitte predicted that sales of computer tablets and smartphones could outnumber traditional plug in PCs already in 2011. It reported worldwide sales of smartphones and tablet computers would come to 425 million, well above sales of 390 million PCs. Research firm Gartner has further claimed that the global tablet market could almost quadruple in 2011 to 70 million units from 15 million in 2010, and expand to nearly 300 million by 2015.

Despite the favorable trends, ZAGG continues to be heavily shorted. Moreover, the short interest reached a record of 8.8 million shares as of end of May, representing 50% of the float. The eventual short-buying back rally caused by positive news about the company, could cause a short squeeze and send the company’s shares in the skies.

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Stock Alert for China TechFaith Wireless (CNTF)

Jay Geller — Tue, 07 Jun 2011 09:47:58 +0000

China TechFaith Wireless Comm. Tech. Ltd. (CNTF) is a China-based company with global operations focused on opportunities in mobile phones and the fast growing PC and online gaming markets. It maintains three primary businesses. Under the TechFaith umbrella, the Company is a global mobile solutions provider for global mobile handsets market. Under its TecFace brand, the Company engages in the development of specialized mobile phones for differentiated market segments, including the rapidly growing smartphone market targeting users and operators through its QIGI brand; outdoor and sports enthusiasts through its Jungle brand; and the teen market through licensed brands. Under the Company’s 17Vee brand, CNTF has built a leading, intellectual property-based motion gaming business ranging from Bluetooth enabled motion gaming controllers and software to a recently launched proprietary set-top motion game box.CNTF was incorporated in 2004.

Share Statistics (6-June-11)			FY 2009	FY 2010	% Chg	Q4 2009	Q4 2010	% Chg
Symbol	CNTF	Revenue, $Mn	211.08	271.88	28.8%	59.76	76.88	28.6%
Current price	$4.41	Gross marg.	18.1%	24.7%	36.5%	16.1%	27.9%	73.3%
52wk Range:	$2.34-$6.96	Oper. margin	–	13.3%	–	–	15.7%	–
Avg Vol (3m):	383,738	Net margin	3.00	10.0%	233.3%	5.2%	11.5%	121.2%
Market Cap.	233.43M
Shares Outstanding	52.93M	EPS, $	0.01	0.03	200.0%	0.00	0.01	0.0%

Source: Reuters.com, SEC Filings.

Investment Highlights

Shares of CNTF dropped over 16% to close Monday’s session at $4.41. The stock reached an intraday high of $5.24 before settling down. Over 3.35 million shares have traded hands during the session, versus the 10-day average volume of 667.70K. Over the last 52 weeks, CNTF has seen a low of $2.34 and a high of $6.96. It is currently trading below its 50-day moving average of $5.14 and in line with its 200-day moving average. Market capitalization currently stands at $233.43 million and it has 52.93 million outstanding shares.

CNTF yesterday reaffirmed its revenue guidance of $82 million to $84 million for the second quarter of 2011, with gross margin levels similar to the previous quarter.

The Company also yesterday announced it will launch a 3D massive motion PC console game, “Legend of the 7 Swordsmen,” through its 17Vee Motion Game platform. According to Tony Kong, CEO of CNTF’s 798 Entertainment gaming business, the Company views this as a potential ‘Game Changing’ event for the broader market with considerable upside for gamers in the form of even richer, more intense, action packed game content. CEO Kong said that by combining their portfolio of intellectual property in motion gaming with the popular elements gamers want, the Company has the real opportunity to create and lead an entirely new gaming segment.

According to CEO, 17Vee, to date, has developed 15 motion sports and casual games in-house and has the licensing rights to distribute approximately 52 games from third parties. Also, 17Vee motion devices, through convertible software, are able to support approximately 50 PC Online games and 300 standalone console games.

“We expect to further expand our game catalog as we move forward in order to provide compelling content to gamers for use on our game controllers and motion mobile phone users. We plan to expand our in-house motion sports and casual games titles to 50 and our in-house massive motion PC Game titles to four in the next two years. Additionally, we would also like to expand available titles from the third parties to approximately 100 over the next two years,” he said.

Visit CNTF at www.techfaithwireless.com

Financial Summary

CNTF reported net revenue of $78.7 million for the first quarter of 2011, a 29% increase compared to $60.9 million in the first quarter of 2010, and a 2% increase compared to $76.9 million in the fourth quarter of 2010. Gross margin for the first quarter of 2011 improved to 32% compared to 22% in the same quarter last year and 28% in the previous quarter.

Income from operations for the first quarter of 2011 was $15.8 million, a 151% increase compared to $6.3 million in the same quarter last year, and a 31% increase compared to $12.1 million in the previous quarter. Net income attributed to CNTF for the first quarter of 2011 was $13.8 million, or $0.26 per basic and diluted weighted average outstanding ADS, compared to $7.1 million, or US$0.15 per basic weighted average outstanding ADS and $0.07 per diluted weighted average outstanding ADS in the first quarter of 2010, compared to $8.9 million, or $0.17 per basic and diluted weighted average outstanding ADS in the fourth quarter of 2010.

The Company has restated the 2009 financial statements as a result of its application of a more appropriate accounting treatment in relation to its 8% senior secured convertible promissory notes issued to affiliates of IDGVC Partners in 2009. The Company will explain the background and details of the accounting treatment in the Company’s annual report on Form 20-F for 2010 to be filed with the Commission. As a result of the restatement, the financial results for the first three quarters of 2010 were adjusted: the interest expense in relation to the Notes was adjusted from $265,000 to $56.0 and the net income for the three months period ended March 31, 2010, was adjusted from $6.9 million to $7.1 million. The Notes were subsequently converted into ordinary shares in the Company and one its subsidiaries in September 2010, pursuant to the original conversion terms. The Company does not expect the restatement and adjustment will have any impact to the Company’s future financial results and positions.

Source: www.techfaithwireless.com

Financial Strength (6-June-2011)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	6.89	1.71	2.27	0.71
Current Ratio (MRQ)	7.41	2.04	2.70	1.04
LT Debt to Equity (MRQ)	0.11	17.83	14.17	137.91
Total Debt to Equity (MRQ)	0.11	27.89	24.66	184.20
Interest Coverage (TTM)	–	1.31	0.84	18.01

Source: Reuters.com, SEC Filings.

Analyst Consensus

No analyst recommendations and revisions data available.

Technical Analysis

Source: http://stockcharts.com

CNTF is trading below its lower Bollinger Band. Relative to recent price action, the stock is currently overextended to the downside and for either a pause or retracement.

CNTF’s MACD is indicating a weak bearish signal. Although the indicator is above the critical level of 0, which implies that the underlying moving averages are bullish, the MACD has crossed below its 9-day moving average or signal line. This suggests that positive momentum has begun to slow.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Jan-06-2011	symbol	Share, $	$ Mn	2011	2012	2011	2012
Orsus Xelent Technologies Inc.	ORS	3.08	7.76M	n/a	n/a	n/a	n/a
Motorola Mobility Holdings Inc.	MMI	24.35	7.18B	30.44	14.67	0.54	0.48
Nokia Corp. (ADR)	NOK	6.60	24.49B	17.84	13.47	0.43	0.42
Research In Motion Ltd. (USA)	RIMM	38.91	20.28B	6.03	5.65	0.85	0.77
Qiao Xing Mobile Communication Co. Ltd.	QXM	2.79	147.91M	n/a	n/a	n/a	n/a
Diversified Communication Services Median				18.73	n/a	0.97	n/a
China Techfaith Wireless Comm. Tech. Ltd.	CNTF	4.41	233.43M	n/a	n/a	n/a	n/a

Source: Thomson Financial

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Apple Shares wiggle ahead of Worldwide Developers Conference

Admin — Mon, 06 Jun 2011 14:32:45 +0000

In recent days’ trading, Apple Inc.’s (NASDAQ: AAPL) shares have wavered in advance of its worldwide developers conference planned for today on buzz the company most likely will not unveil the new iPhone, which AAPL has done in the past, making analysts to lower their forecasts for the sales of the iPhone in 2011 and 2012.

Instead, AAPL disclosed that Steve Jobs is returning to give the keynote presentation and highlight the next versions of Mac OSX Lion and iOS 5. The company has also scheduled the introduction of the iCloud, an Internet-based service that allows consumers to stream music they bought to any Apple device. Accordingly, the iCloud is aiming to strengthen the potential of the iTunes and make it tougher to compete for rivals like Google Inc. (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN), which require users to upload their library of songs to play music.

AAPL’s shares followed a bouncing ride this year amid impressive revenue and profitability growth, successful launch of the iPad 2, as well as concerns about Steve Job’s health and competitive pressure from devices powered by Android platform. The stock gained 4.2% since the beginning of 2011, compared to a gain of 56% in 2010.

The Q2 FY 2011 results, which smashed again consensus estimates, gave a significant boost to AAPL’s valuation. The company posted a net profit of $5.99 billion, or $6.40 a share, while revenue surged 83% to $24.67 billion. According to Thompson Reuters, analysts were expecting AAPL to earn $5.37 a share on revenue of $23.4 billion.

The company sold 3.76 million Macs during the last quarter, a 28% unit increase over the year-ago quarter. AAPL sold 18.65 million iPhones in Q2 FY 2011, representing 113% unit growth over the year-ago quarter. The company sold 9.02 million iPods during the quarter, representing a 17% unit decline from the year-ago quarter. The company has also sold 4.69 million iPads during the quarter. Altogether, AAPL sold nearly 20 million iPads in the first year it has been available.

According to IDC, Apple was ranked the second-largest smartphone vendor globally in terms of units sold in Q1 2011. The company earned a respectable 18.7% market share, compared to 24.2% share for Nokia. With a growth rate of 113% in the last quarter versus the year-ago quarter, AAPL has topped Nokia in smartphone revenue and is chasing the Finish phone maker for the title of world’s number one smartphone maker ranking by units shipments.

Meanwhile in the U.S., AAPL is claiming 28% of the smartphone market for the last quarter of 2010, while Android and Research in Motion’s (NASDAQ: RIMM) Blackberry tied with 27% each, according to a report from Nielsen. However, new phone purchases suggest a positive trend for Android and negative for BlackBerry. Apple’s share of new buyers has been virtually unchanged for the past year at 26%, but Android users now make up 43% those who bought a phone in the past six months.

Another trend that benefits AAPL is the forecast that sales of computer tablets and smartphones could outnumber traditional plug in PCs already in 2011. Consulting firm Deloitte reported that worldwide sales of smartphones and tablet computers would come to 425 million, well above sales of 390 million PCs. The trend was also backed by the analysis from Gartner, which forecast 2011 PC growth at 10.5% down from 15.9% previously. Worldwide PC shipments could hit 440.6 million units in 2012, a 13.6% increase from 2011, down from Gartner’s previous outlook of 14.8% growth, the market watcher added. Gartner has further claimed that the global tablet market could almost quadruple in 2011 to 70 million units from 15 million in 2010, and eat into the slowing PC market over the next four years. AAPL’s iPad could control about 69% of the 2011 tablet market, dropping to 47% by 2015; when nearly 300 million units would be probably sold. This means that AAPL could sell nearly 140 million iPads in 2015, which could result in remarkable revenue of $80 billion from this product alone.

From the business fundamentals perspective, AAPL is well positioned to further appreciate with another record quarter in terms of earnings and revenue. The company is reaching new customers internationally and among businesses that have not typically used its products, thus maintaining exponential growth prospects intact.

Should you buy or sell AAPL? Visit http://applestock.org to do your own research and decide.

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Stock Alert for Orsus Xelent Technologies Inc. (ORS)

Admin — Tue, 24 May 2011 09:11:22 +0000

Orsus Xelent Technologies Inc. (ORS) is an emerging designer and manufacturer of award-winning mobile phones for the Asian market, primarily the People’s Republic of China (PRC). The Company’s business encompasses the design of mobile phones, related digital circuits, and software development, and is a recognized pioneer in mobile phone integration technology. It introduced the region’s first wristwatch-style cellular phone, and continues to break new ground with state-of-the-art phones that include advanced features such as fingerprint recognition and touch-screen displays. The Company is also focused on developing and marketing, under its Proxlink trademark, special application mobile phones for specialized users in a wide variety of professions in business and government. Since the Company’s launch in 2004, it has established “Orsus” as a popular brand and achieved a significant share of the world’s largest mobile phone market. It maintains more than 179 service call centers across the PRC, with additional offices in Shanghai, Hong Kong, Shenzhen and Tianjin.

ORS was incorporated in Delaware and is headquartered in Beijing, China.

Share Statistics (23-May-11)			FY2009	FY2010	% Chg	Q42009	Q42010	% Chg
Symbol	ORS	Revenue, $Mn	77.39	24.41	-68.5%	15.21	4.44	-70.8%
Current price	$2.42	Gross marg.	12.2%	7.5%	-38.5%	7.7%	7.2%	6.5%
52wk Range:	$0.60-$4.68	Oper. margin	–	-133.1%	–	–	-764.5%	–
Avg Vol (3m):	43,171	Net margin	-8.3%	-194.1%	2238.6%	-80.1%	-1054.3%	1216.3%
Market Cap.	6.10M
Shares Outstanding	2.52M	EPS, $	0.05	-1.57	-3240.0%	-0.15	-1.50	900.0%

Source: Reuters.com, SEC Filings.

Investment Highlights

ORS shares skyrocketed over 120% in yesterday’s trading after the China-based cellular phones maker announced its first-quarter financial results. Shares reached an intraday high of $2.48 before closing at $2.42. Approximately 1.63 million shares have traded hands during the session, versus the 10-day average volume of 60.87K.

ORS reported sales of $3.91 million for the quarter ended March 31, 2011, almost 50% less than the year-ago period’s sales of $7.6 million. First-quarter income from operations came in at $342,000.

However, mainly due to a non-cash reversal of allowance for bad debt generating other income of $32.02 million in the quarter, the Company posted net income of $32.03 million, or $12.73 per share, a swing from last year’s loss of $446,000, or a loss of $0.18 a share. The per share figures in each period are based on 2.52 million and 2.48 million weighted average shares outstanding respectively, which are a reflection of the 1:12 reverse share split effected by ORS last month.

The Company’s report stated that the reversal of the allowance for bad debt is a consequence of the fact that following a year-end write down of those doubtful accounts (accounts receivable) in 2010 which were not covered by an expired third party guarantee agreement, on March 30, 2011, ORS signed a Credit Guarantee Contract with Beijing Xingwang Shidai Tech and Trading Co. Ltd. (Xingwang) and Zhong Hui Guarantee Corp. (Zhonghui), by which Zhonghui renewed its guarantee for any sales to Xingwang. Under this new agreement, coverage was increased from RMB 300 million ($44.2 million) to not more than RMB 500 million ($73.6 million) up to the period ending December 31, 2011.ORS pointed out that the reversal in the quarter of the previously expensed bad debt did not generate cash, and that its most urgent concerns are cash flow and related going concern issues.

“We are pressing ahead with our previously described plans for a strategic merger and/or a capital raise and/or a loan to resolve our cash flow problem. We believe we have made progress in this regard, but have not yet succeeded and cannot predict the final outcome of our various discussions,” ORS CEO Guoji Liu stated in the press release. “It is only with success in securing additional cash that we will be able to move forward with plans to strengthen operations. These plans include a focus on product sales in developing regions such as Africa and the introduction of new products that conform to consumer demand and the needs of China’s telecom operators.”

Over the last 52 weeks, ORS has seen a low of $0.60 and a high of $4.68. It is currently trading above its 50-day moving average of $1.48 and above its 200-day moving average of $1.87. Market capitalization currently stands at $6.10 million and it has 2.52 million outstanding shares.

Visit ORS at www.orsus-xelent.com

Financial Strength (23-May-2011)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	–	1.70	2.25	0.70
Current Ratio (MRQ)	1.00	2.04	2.66	1.02
LT Debt to Equity (MRQ)	–	17.89	13.69	149.66
Total Debt to Equity (MRQ)	–	27.53	24.27	195.98
Interest Coverage (TTM)	-6.28	1.38	0.87	17.87

Source: Reuters.com, SEC Filings.

Analyst Consensus

No consensus recommendations data available.

Technical Analysis

Source: http://stockcharts.com

On Friday last week, ORS closed above its 20-day moving average. This is generally considered to be an indication of a bullish trend.

ORS’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility.

ORS’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
May-23-2011	symbol	Share, $	$ Mn	2011	2012	2011	2012
Motorola Mobility Holdings Inc.	MMI	23.65	6.98B	29.20	14.08	0.52	0.46
Nokia Corp.	NOK	8.13	30.16B	12.90	10.84	0.51	0.50
Research In Motion Ltd (USA)	RIMM	43.60	22.72B	6.73	6.26	0.95	0.85
China Techfaith Wireless Comm. Tech. Ltd	CNTF	5.74	303.84M	n/a	n/a	n/a	n/a
Qiao Xing Mobile Communication Co. Ltd.	QXM	2.66	141.02M	n/a	n/a	n/a	n/a
Communication Equipment Median				17.33	n/a	1.13	n/a
Orsus Xelent Technologies Inc.	ORS	2.42	6.10M	n/a	n/a	n/a	n/a

Source: Thomson Financial

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

Stock Review; what’s the Deal with RIMM?

Admin — Thu, 19 May 2011 15:08:04 +0000

Shares of Research In Motion Limited (NASDAQ:RIMM) slipped this morning after a brief rally yesterday on news that China Unicom, the second largest mobile carrier in China, started to offer services with Blackberry phones in an attempt to add more 3G subscribers to its network. RIMM has also benefited from analyst upgrade, which argued that the company have reached the bottom and things are not poised to worsen any more, at least over the medium term.

The stock has performed poorly, losing 27% since the beginning of 2011. The company is losing market share in the U.S. smartphone market to rivals Apple Inc.’s (NASDAQ: AAPL) iPhone and Google Inc.’s (NASDAQ: GOOG) Android platforms. According to a recent report from Nielsen, Apple is claiming 28% of the U.S. smartphone market for the last quarter of 2010, while Android and Blackberry tied with 27% each. However, new phone purchases suggest a positive trend for Android and negative for BlackBerry. Apple’s share of new buyers has been virtually unchanged for the past year at 26%, but Android users now make up 43% those who bought a phone in the past six months. BlackBerry buyers have had their share almost cut in half from 38% in fall 2009 to 20% last year.

The company has also taken a beating after it got mediocre reviews on its tablet computer PlayBook. Reviewers consented that the tablet offers some advantages mainly to business customers, however it would fail to impress the mainstream clients and needs additional functionality to successfully compete against the iPad 2 or Android based tablets. Following the launch, RIMM had to recall 1,000 Playbook tablets because of defective operating software. The latest data indicate that RIMM has sold 250,000 Playbooks since launching in April. While these numbers are not representing a challenge to the iPad 2, which sales neared 1 million units during the first weekend, the Playbook early sales outperformed Motorola’s (NYSE:MMI) Android powered Xoom tablet.

The smartphone market share losses and lower initial sales of Playbook have made the company to lower its first-quarter profit outlook. RIMM now sees earnings of $1.30 to $1.37 a share for the three months ending in May, down from a prior projection for earnings of $1.47 to $1.55 a share. RIMM has also expects to earn $7.50 a share for fiscal 2012. The current consensus estimates are for a profit of $1.33 a share on revenue of $5.16 billion for Q1 FY 2012 and $6.96 a share on revenue of $23.18 billion for entire FY 2012.

At current valuation levels and consensus estimates, RIMM looks very cheap. The stock is trading at 6.0 times management guidance for fiscal 2012 EPS, significantly below the similar metric for the rivals Apple and Google. Despite discounted valuation, the company’s business is generating steady profitability, double-digits growth, as well as expansion in the International market. Moreover, RIMM has scheduled the launch of new product that could contest the leadership of Apple’s and Android powered touch-screen phones. The company has also planned to bring the QNX operating system that powers PlayBook tablets to BlackBerry smartphones. However, it has yet to give a time frame for that.

Considering the huge base of Blackberry fans, scheduled smartphone launch to enhance its touch-screen offering, several undisputed advantages of the Playbook like the speed, security, Flash implementation as well as imminent product upgrades following client’s reviews, we regard RIMM with decent chances stop losing market share in the smartphone market and carve a meaningful niche in the tablet market.

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Microsoft Plans another Attempt to Revitalize its Online Business

Admin — Tue, 10 May 2011 15:40:30 +0000

Microsoft Corporation’s (NASDAQ: MSFT) shares lost more than 1% this morning following a Wall Street Journal report that the software giant is nearing a deal to buy the popular Internet telephone service Skype. The report indicated that the deal would be valued at $8.5 billion, including assumed debt. As a result, the acquisition may be the largest for MSFT, topping the purchase of online ad service AQuantive for about $6 billion in 2007.The move, if confirmed, represents another attempt by MSFT to boost its Internet business. The company has heavily invested in its online unit, which runs the Bing search engine and MSN Web portal, but is not able to gain a significant edge in competition with Google (NASDAQ: GOOG) and Facebook. Accordingly, the addition of 663 million registered users of Skype would certainly make an immediate impact, but the market still doubts MSFT’s capacity to make money over the Internet.

The purchase of Skype could help MSFT to attract additional Web users and boost the traffic to its Web sites, thus getting Google’s lead in Internet advertising thinner. Besides, Skype could facilitate MSFT in becoming a bigger force in the burgeoning smartphone market. The combination of Skype and Windows Phone could give the company a chance in competing against Apple (NASDAQ: AAPL), Google and Research in Motion (NASDAQ: RIMM).

However, most analysts are questioning the transaction’s value, which at $8.5 billion looks pretty inflated for a company that lost $7 million on revenue of $860 million in 2010. Moreover, there are only 8.8 million customers per month (1.3% of total registered users) who pay to use Skype services.

MSFT’s online services unit reported revenue of $648 million for Q3 FY2011, up 14% from Q3 FY2010, but it still made a loss of $726 million in the quarter as the company enhanced the efforts to challenge Google in Internet search. The unit has now accumulated a loss of $7 billion over the last four years, making investors grim about MSFT’s Internet chances. The eventual addition of another loss making unit can further cut on MSFT’s prospects.

Microsoft’s shares have lost 7.5% this year after the latest results have evidenced that the company’s flagship Windows division is losing customers. The company saw the Windows division revenue, which stands for almost a quarter of its sales and nearly half of all operating income, down 4% for the fiscal third quarter. The negative trend is believed to be caused by the momentum of computer tablets, which are expected to steal market share from plug in personal computers.

According to a report from consulting firm Deloitte, sales of computer tablets and smartphones could outnumber traditional plug in PCs already in 2011. It reported worldwide sales of smartphones and tablet computers would come to 425 million, well above sales of 390 million PCs. The trend is challenging Windows division sales, as the world is moving away from standardized PC-like devices containing standardized software, to a far more heterogeneous environment of tablets and smarphones, where MSFT is still an outlier.

MSFT overall sales for the fiscal third quarter rose 13% to $16.4 billion, beating the $16.2 billion expected by analysts, helped by sales of Office and its Xbox game system. The Company reported a 31% increase in net profit, posting $5.2 billion, or $0.61 per share, compared with $4 billion, or $0.45 per share, in the year-ago quarter. Excluding the onetime tax benefit, net income met the $0.56 expected by analysts, according to Thomson Reuters.

With a market capitalization of $220 billion and a cash balance in excess of $50 billion, the company is traded at a modest 9.36 times expected earnings for the next 12 months, below the average for direct competitors. The company is still generating significant growth, has Windows and Office divisions as veritable cash cows and earned a record of $8.7 billion in cash from operations over the last quarter, despite the losses from the online business.

The acquisition of Skype has the potential to invigorate the company’s online business, but, ultimately, it is up to management’s vision and execution on how to integrate it with existing units and monetize the huge and expanding base of 663 million registered users.

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Top Tech Stock; Research In Motion rolls through Mixed Playbook Reviews

Admin — Fri, 15 Apr 2011 18:59:10 +0000

Shares of Research In Motion Limited (NASDAQ:RIMM) shares today recovered the slight losses yesterday after the company got mediocre reviews on its tablet computer PlayBook, ahead of the scheduled launch on April 19. Reviewers consented that the tablet offers some advantages mainly to business customers, however it would fail to impress the mainstream clients and needs additional functionality to successfully compete against the iPad 2 or Android based tablets.

Following mixed reviews, a number of analysts expressed concerns that the Playbook could experience a modest start, until the company would add the full functionality of Blackberry smartphones: that are a native e-mail, calendar, contact lists, etc. to the Playbook. Analysts now expect that their concerns would be alleviated with the launch of the second generation of Playbook, some time in Q3 or Q4 of calendar 2011.

The stock took another beating on March 24, after the company’s outlook for fiscal 2012 missed the analyst consensus. The lower-than-expected-results for upcoming quarters were seen by the market as an indicator that RIMM is not expecting stellar performance from upcoming release of the PlayBook. The above mentioned concerns combined with the recent pessimism of reviewers sent RIMM’ shares down to $53.92 on April 14, the lowest level since October 25, 2010.

The recent decline in RIMM’s valuation has wearied away this year appreciation caused by an upgrade of the company’s rating following aggressive estimates of PlayBook sales. The recent reviews deny the opportunity for the Playbook to gain adoption beyond the current population of Blackberry users. Moreover, the successful launch of Apple Inc. (NASDAQ: AAPL)’s iPad 2, as well as the growth of Samsung Electronics Co.‘s Galaxy Tab sales is challenging significantly the market potential of PlayBook even among the Blackberry fans .

Research In Motion 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 end of February, the company has shipped approximately 145 million smartphones and has a subscriber base of more than 60 million.

The company’s supremacy in the smartphone market was questioned initially by Apple’s iPhone and later by Google Inc.’s (NASDAQ: GOOG) Android platform. Both the iPhone and Android became increasingly popular and gained the market share form Blackberry. According to a recent report from Nielsen, Android is claiming 29% of the U.S. smartphone market for the last quarter of 2010, while Apple and Blackberry tied with 27% each. In addition, RIMM failed to introduce any smart phone over the last year that can gain the market share from iPhone or Android.

While RIMM headed the smartphone market, it missed the tablet computer opportunity and now is trying to catch up. Competition in the mobile tablet category is poised to heat up even more, as Dell Inc. (NASDAQ: DELL) and Motorola Mobility Holdings Inc. (NYSE: MMI) have also launched tablets running Android. In addition, Hewlett-Packard Co. (NYSE: HPQ) is also planning a similar device.

Research company IDC said that the overall tablet sales more than doubled to 10.1 million in the fourth quarter of 2010, from 4.5 million in the third quarter. The iPad’s share of those global sales dropped from 93% in the third quarter to 73% in the last quarter of 2010. The Samsung Galaxy Tab had about 17% of the market in the quarter.

Even with the crowding tablets market, there is enough room for every player to find a niche. The research company Gartner predicted that sales of tablets could grow from 20 million in 2010 to 208 million in 2014. Moreover, over the long run the tablet computers could challenge and ultimately harm the personal computer market. As a result, the launch of the Playbook is aimed not only to immediately scale up revenue and earnings, but also to establish a footprint in a huge and skyrocketing market, further develop and innovate to earn a bigger “slice of this pie”.

Considering the huge base of Blackberry fans, several undisputed advantages of the Playbook like the speed, security, Flash implementation as well as imminent product upgrades following client’s reviews, we regard RIMM with decent chances to gain a meaningful market in the tablet market. The upcoming weeks would be indicative of the scale of product adoption and upgrades to improve the competitiveness against the iPad and Android tablets.

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Research In Motion plunges on Disappointing Q1 FY 2012 Outlook

Admin — Fri, 25 Mar 2011 13:59:07 +0000

Research In Motion Limited (NASDAQ: RIMM) plunged nearly 10% this morning shortly after the company’s outlook for fiscal 2012 fell short of analyst expectations. The lower-than-expected-results for upcoming quarters were seen by the market as an indicator that RIMM is not expecting stellar performance from the approaching release of PlayBook computer tablet.

The decline in RIMM stock price has annihilated this year appreciation caused by an upgrade of the company’s rating based on aggressive estimates of PlayBook sales. However, the successful launch of Apple Inc.’s (NASDAQ: AAPL) iPad 2, as well as the growth of Samsung Electronics Co.‘s Galaxy Tab sales have significantly questioned the market potential of PlayBook. With a 52 week range of $42.53-$76.78, the March 24 trade is in the middle of that range.

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 February, the company has shipped approximately 145 million smartphones and has a subscriber base of more than 60 million. For fiscal 2011, revenue hit $19.9 billion, up 33% from $15 billion last year. Net income for fiscal 2011 was $3.4 billion or $6.34 per share diluted, up 47% over fiscal 2010.

For Q4 FY 2010, net earnings at RIMM surged 32% to $934 million, or $1.78 a share, from 710 million or 1.27 a shares one year ago. Revenue rose 36% to $5.56 billion, on strong sales of the company’s BlackBerry line of smartphones. Analysts polled by Thompson Reuters, expected earnings of $1.75 a share on revenue of $5.65 billion.

RIMM has also announced that for Q1 FY 2012, revenue is expected to be in the range of $5.2-$5.6 billion. Gross margin percentage for the first quarter is expected to be approximately 41.5%. Earnings per share for the first quarter are expected to be in the range of $1.47 -$1.55 per share diluted. For the full year fiscal 2012, the company expects earnings per share to be in excess of $7.50 fully diluted.

The company’s outlook runs below the average estimate of analysts polled by Thompson Reuters, who expected RIMM to earn $1.65 a share on revenues of $5.67 billion in Q1 FY 2012. The lower-than-expected earnings were due to the company’s plans to increase the research and development expenses in fiscal 2012, as well as spend heavily on the launch of Playbook.

RIMM has scheduled the launch of Playbook for April 19, a move that should boost the revenue and earnings over the next quarters. The tablet is expected to be cheaper and faster than iPad, with a potential to outperform in the emerging markets. However, the lack of applications that run under the tablet’s platform, as well as the smartphone market share shrinkage in the U.S., raises significant concerns towards the tablet adoption rate.

However, RIMM has recently reported plans to allow Android applications to run on its tablet computer. The move will greatly expand the number of apps available on the PlayBook. Google Inc.’s (NASDAQ: GOOG) Android platform is becoming increasingly popular in the U.S. According to a recent report from Nielsen, Android is claiming 29% of the U.S. smartphone market for the last quarter of 2010, while Apple and Blackberry tied with 27% each.

Meanwhile, Strategy Analytics said that tablet sales overall more than doubled to 9.7 million in the fourth quarter of 2010, from 4.4 million in the third quarter. The iPad’s share of those global sales dropped from 96% in the third quarter to 75% in the last quarter. Tablets running on Android, meanwhile, rose from 2.3% to 22%, due to the growth of Galaxy Tab sales.

Competition in the mobile tablet category is poised to heat up even more, as Dell Inc. (NASDAQ: DELL) and Motorola Mobility Holdings Inc. (NYSE: MMI) have also launched tablets running Android. In addition, Hewlett-Packard Co. (NYSE: HPQ) is also planning a similar device.

Even with the crowding tablets market, there is enough room for every player to find a niche. The research company Gartner predicted that sales of tablets could grow from 19.5 million in 2010 year to 208 million in 2014. As a result, RIMM has the potential to significantly scale up its revenue with the successful launch of Playbook.

Despite the solid results and decent outlook, RIMM trades at a trailing twelve months (ttm) P/E multiple of 9.04x, compared to AAPL’s ttm P/E of 19.25x and Google Inc. (NASDAQ: GOOG) ttm P/E of 26.31x. The discount trading is due to increased competition from Apple and Android based phones that are eating away the market share from RIMM. However the rapidly growing smarphone and tablets market offer RIMM decent chances to build a solid niche and appreciate on solid growth.

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