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RIM Replacing Apple as the Stock Market’s Tech Darling?

Tuesday, March 26th, 2013
By for Profit Confidential

RIM Replacing AppleIt has been a few months since the launch of the highly anticipated “BlackBerry 10” (BB10) operating system and products by Research In Motion Limited (NASDAQ/BBRY). I have tried the new “BlackBerry Z10” smartphone, and my early thoughts are that it looks good and is faster than the company’s previous phones. But based on the early sales returns, I don’t think Research In Motion (RIM) will be the one to take down Apple Inc. (NASDAQ/AAPL), and it definitely won’t take a run at Google Inc. (NASDAQ/GOOG) and its “Android” operating system, which is the most-used mobile device operating system worldwide. And Korean-based Samsung, with its “Galaxy” line, has become the major reason why Android is doing so well.

For RIM, the race is not to number one, but to try to grab third place and then move upward from there toward Apple, whose “iOS” system is number two, based on my stock analysis. Given the massive size and potential of the global smartphone and tablet market, there is a lot of business to be won, according to my stock analysis. Being in third place wouldn’t be that bad for RIM. Of course, Microsoft Corporation (NASDAQ/MSFT), with its “Windows 8,” also wants a piece of the mobile action.

The market continues to hype up BB10. The shares of RIM surged 185% to a 52-week high of $18.32 on January 24 following the launch of BB10; but the shares have traded lower since on concerns regarding sales of the BlackBerry Z10 phone. With AT&T Inc. (NYSE/T) beginning to sell the Z10 last Friday, it will be interesting to see the response in the key U.S. market, which is still dominated by Android and Apple.

RIM’s stock chart below shows the upward move in the stock and the current stalling. But notice the relative comparison to the downward price performance of Apple indicated by the purple line in the chart below.

BBRY BlackBerry Nasdaq GS stock Chart

Chart courtesy of www.StockCharts.com

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According to my stock analysis, the success of BB10 will likely be the final opportunity for RIM to try to regain market share. The company has spent tons on making sure BB10 is a great product; in my view, this is RIM’s chance to win back or maintain its clients, especially in the corporate market. I also like RIM in Asia, China (read “China: This is Your Time!”), and the emerging markets, based on my stock analysis.

Eric Jackson, the founder of Ironfire Capital, is positive on RIM’s installed base of around 80 million subscribers worldwide and sees a price target of $45.00. (Source: Nesto, M., “Blackberry 10: It’s Make or Break for RIM, Says Jackson,”Breakout, January 28, 2013, last accessed March 25, 2013.) Based on my stock analysis, I’m not that optimistic; I want to see how things unfold, but RIM will need to deliver a great product, otherwise it could be lights out.

The smartphone and tablet markets continue to be extremely competitive, and I expect this will heat up further, based on my stock analysis.

The question is: can RIM ever regain its former luster? My stock analysis suggests that the company has a long and tough road ahead of it. While it’s unlikely RIM will catch Apple, the best case scenario would be for RIM to take some market share away from Apple and the other market sector players.

All hope lies with the acceptance of its BB10, based on my stock analysis.

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  • Mark Alexander

    One would think, in this time of 'global economies', that our journalists would open their eyes past the US markets. Blackberry doesn't NEED the US market to be successful, it is just icing on the cake for them. They have a VERY solid footing in every other country out there right now, with the BB10 being the hottest selling smartphone in many of them. Yes, even beating out Apple and Adroid.

    Maybe it's time for someone who is smarter than the smartphone they carry to look at the big picture, and not just look at which phone THEY prefer. The US market is not the only place to make money in this world.

  • Kevin Yeakley

    blackberry is my work phone thats all it will ever be…thats their pie…they have a great foot hold, but they are slipping, bb10 will keep then in there for now..

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George Leong - Financial Planner, ConsultantGeorge Leong, B. Comm. is a Senior Editor at Lombardi Financial, and has been involved in analyzing the stock markets for two decades where he employs both fundamental and technical analysis. His overall market timing and trading knowledge is extensive in the areas of small-cap research and option trading. George is the editor of several of Lombardi’s popular financial newsletters, including The China Letter, Special Situations, and Obscene Profits, among others. He has written technical and fundamental columns for numerous stock market news web sites, and he is the author of Quick Wealth Options Strategy and Mastering 7 Proven Options Strategies. Prior to starting with Lombardi Financial, George was employed as a financial analyst with Globe Information Services. Add George Leong to your Google+ circles