The market for Personal Digital Assistants (PDAs) and mobile phones is extremely competitive, especially given the new technologies and increased functions demanded by users. The leader in the PDA market at this time continues to be Research In Motion Limited (NASDAQ/RIMM, TSX/RIM) — the maker of the widely loved “BlackBerry” PDA. I initially spotted this growth stock way back in November 1998, when it was trading at a price adjusted CAD$1.00. The stock traded as high as CAD$150.00 and was up nearly 15,000% before declining back to the CAD$108.00 level.
And, while rivals like Motorola, Inc. (NYSE/MOT) and Palm, Inc. (NASDAQ/PALM) struggle to compete, Research In Motion (RIM) continues to fire on all cylinders and is leading the pack. Despite constant concerns about competition, RIM has continued to impress us with its growth in subscribers and expansion into new infant markets.
In China, RIM began marketing its BlackBerry in late 2007 following a hard-fought battle that took eight years. With close to 500 million cell phone users in China and a strong desire for new technologies, China is ripe for the picking with the growth potential enormous for RIMM. The BlackBerry is already sold in India and Japan. The global expansion makes sense.
There are some concerns with the “iPhone” by Apple, Inc. (NASDAQ/AAPL), but it is still too early to view the iPhone as a serious threat to the BlackBerry. The iPhone has a long way to go, with only a few carriers at this time, compared to 300 carriers and 120 countries for RIM. RIM’s subscriber base continues to accelerate and it’s gaining market share. The BlackBerry saw its market share for smartphones grow to 53.6% of the U.S. market in the second quarter, up from 44.5% in the first quarter, according to IDC. More importantly, Apple and Palm lost market share.
If you are deciding between RIM, Palm or Apple, I would lean towards RIM due to its market advantage and ability to expand into new markets while maintaining a technological advantage.