Research in Motion (RIMM)

xertpo

http://www.google.com/finance?q=NASDAQ:RIMM

Research In Motion Limited (RIM) is a designer, manufacturer and marketer of wireless solutions for the worldwide mobile communications market. Through the development of integrated hardware, software and services that support multiple wireless network standards, RIM provides platforms and solutions for seamless access to time-sensitive information, including e-mail, phone, short message service (SMS), Internet and intranet-based applications. RIM’s portfolio of products, services and embedded technologies are used by organizations worldwide and include the BlackBerry wireless solution, the RIM Wireless Handheld product line, software development tools and other software and hardware. Its subsidiaries include Research In Motion Corporation, Research In Motion UK Limited and RIM Finance, LLC. On June 2, 2010, Harman International sold its software operating systems unit, QNX Software Systems, to the Company. In June 2011, the Company acquired Scoreloop.

Some specifics:

http://seekingalpha.com/article/276105-what-to-eye-when-scouting-an-undervalued-play

The company has been profitable for each of the last eight years.
For the last five years, the company has averaged Returns on Capital Employed of 36.1%.
For the last five years, the company has averaged Returns on Invested Capital of 46.4%.
For the last five years, the company has averaged Returns on Equity of 37%. A Dupont analysis shows that this has been driven largely by improving operating leverage (Revenues / Average Assets), rather than increasing leverage.
The company has generated free cash flows in excess of net income for seven out of the last eight years.

Their newest handset will be launched later this year. http://us.blackberry.com/smartphones/blackberrybold/touchbold.jsp

It has received a thumbs up from Engadget.

http://www.engadget.com/2011/06/24/blackberry-bold-9900-preview-video/

On the downside is the lack of apps compared to the iphone and Android. This is compounded by the recent announcement that one of RIMMs app developers is ceasing to produce Blackberry Apps.

Thoughts?

martyoo

Hi Xertpo,

I just bought RIMM last week. Its up nearly 10% already.

They still have a good market but Apple / Google are miles ahead. Yes the apps are a big issue but so are the products.

The fundamentals are still strong and IMO they did not deserve to lose nearly 60% in the past year.

I doubt I will be holding this company too long. As each quarter passess RIMM will lose more and more market share.

I think at its current price it could even be a takeover target.

Cool Mo D

I would be extremely pessimistic over RIMs long term survival.

RIMs bread and butter is making a phone that appeals to corporations, by making email easy and secure. This market is being eaten away by Apple, Google, and Microsoft, all of whom have their own smartphones on the market.

How is RIM possibly going to keep up with the new phones being developed by their competitors? There competitors are much bigger then they are, as well as far more experienced in software development and OS development. The RIM appstore is tiny, and why would a developer write an innovative app for it when they can reach more people with another platform?

RIM has been caught napping by it's competitors, who are some of the largest companies in the world, with almost unlimited resources. RIM will maintain a niche market for their superior corporate email services, including being able to remote wipe devices, which have not yet been superseded.

If RIM want to maintain relevant long term, they need to come up with a compelling reason for businesses and consumers to buy their phones. So far, all they have done is release a tablet, to mediocre reviews. Without a pipeline of innovative new products, I expect to see marketshare slowly decline, and RIM probably end up like Palm, Inc.

Grecco

I don't really know enough about RIMM to comment on there future prospects but what I can say is Microsoft is dead in the water as regards to the mobile phone market. Apple are in second place to Android which has the largest market share and will go on to totally dominate within 2 years.
If RIMM were to embrace Android then who knows, maybe they are smart enough to

coylemj

Grecco wrote: »

If RIMM were to embrace Android then....

They would sink without trace. HTC and Samgsung pretty much own that space and would bury them alive if they tried to enter the Android market.

The Blackberry handset has a loyal following, the last thing that RIMM wants to do is give any kind of signal that they are considering hopping to a new platform, they would lose millions of Blackberry footprints to the iPhone. Look what has happened the Nokia share price since they announced they were going to switch from Symbian to Microsoft.

xertpo

coylemj wrote: »

They would sink without trace. HTC and Samgsung pretty much own that space and would bury them alive if they tried to enter the Android market.

The Blackberry handset has a loyal following, the last thing that RIMM wants to do is give any kind of signal that they are considering hopping to a new platform, they would lose millions of Blackberry footprints to the iPhone. Look what has happened the Nokia share price since they announced they were going to switch from Symbian to Microsoft.

RIMM's new line of phones with their new operating system are slated to be released early next year. They were supposed to be out this year but there has been delays.

I don't think a few Android phones targeting the younger market would be a bad thing for RIMM.

willietherock

I read this blog alot and it has thoughts on RIMM. The stock is dirt cheap.

http://www.barelkarsan.com/2011/06/rim-analysts-were-right.html

martyoo

I read this blog alot and it has thoughts on RIMM.

Forgot about that blog! Smart lad.

coylemj

xertpo wrote: »

I don't think a few Android phones targeting the younger market would be a bad thing for RIMM.

I disagree, RIMM have really no option but to religiously stick to the Blackberry OS and emphatically state again and again that they will not embrace any other technology, otherwise their customers will jump ship and the Blackberry will join the Psion Organizer in the graveyard of innovative technology that never made it.

Grecco

coylemj wrote: »

I disagree, RIMM have really no option but to religiously stick to the Blackberry OS and emphatically state again and again that they will not embrace any other technology, otherwise their customers will jump ship and the Blackberry will join the Psion Organizer in the graveyard of innovative technology that never made it.

Either way this stock is set to head further south.
The correct argument to have is how soon Apple are gonna come under pressure, I reckon within the next 12 months

xertpo

After my initial positivity for the future of this stock, I cam across this at the weekend:-

http://www.businessinsider.com/rim-exec-open-letter-2011-6

Not good.

xertpo

Excellent article on RIM

http://seekingalpha.com/article/310921-the-other-half-of-the-research-in-motion-story-canada-u-k-and-emerging-markets

I bought a few calls for May today.