Analyst: BlackBerry 10 Won't Save Research In Motion
Research In Motion (NASDAQ: RIMM) is only days away from revealing the full release details for BlackBerry 10, the company's long-awaited mobile operating system.
The firm has been somewhat of a golden child on Wall Street, rising nearly 50 percent in January 2013 alone. Over the last six months, shares of Research In Motion have climbed more than 137 percent.
Some of those gains are being diminished Monday as the stock plummets more than six percent. Even so, Research In Motion is still largely considered to be one of the most important stocks in technology.
Nonetheless, not all analysts are convinced that BlackBerry 10 will be a huge success. Jan Dawson, Chief Telecoms Analyst at Ovum, fears the worst.
"RIM continues to face the twin demons of consumer-driven buying power and a chronic inability to appeal to mature market consumers," Dawson said in an e-mail Monday morning.
"There is nothing in what we've seen so far of BB10 that suggests it will conquer the second of these demons, and the first is utterly out of RIM's control. We don't expect a speedy exit from the market; with no debt, 80 million subscribers and profitability in the black in at least some recent quarters, the company can continue in this vein for years. But its glory days are past, and it is only a matter of time before it reaches a natural end."
Dawson's comments originated from a December blog post on Ovum's website. He said that Research In Motion's strategy is more focused on building the best BlackBerry device for BlackBerry users "rather than something that will necessarily win converts from other platforms."
"The points of differentiation RIM has focused on in teasers for the new platform confirm this – better multitasking, productivity, email, contacts and calendar applications and so on, rather than a better gaming, content consumption or social networking experience," Dawson added.
The mainstream media has been quick to praise Research In Motion's latest effort while dismissing everything Apple (NASDAQ: AAPL) releases. Apple, which was the golden child of Wall Street and the mainstream media in 2011 and the early parts of 2012, is no longer revered.
In a bit of irony, Apple's stock is up more than two percent Monday. These gains come after more than four months of losses that exceeded 35 percent.
Some might say that the two stocks have an inverse relationship; as Research In Motion rises, Apple falls. The opposite also appears to be true.
This could be due to the limited potential that smartphone manufacturers have in the marketplace. Unlike Samsung, which produces a multitude of electronics that could carry the business if its smartphone division dies off, Apple's future is heavily dependent on the iPhone.
Outside of a failed tablet, Research In Motion does not make anything but smartphones, so BlackBerry 10 must be successful in order for the firm to survive.
When things were not looking good for Apple, investors seemed all too eager to buy into Research In Motion. Now that BlackBerry 10 is about to be released, some investors are getting cold feet.
Of course, the company could rebound tomorrow. It could soar all week if the final BlackBerry 10 devices prove to be popular in the media.
The real test, however, will not come until the devices are finally released. Even then investors will not be able to judge their success until they have been available for a few months. If BlackBerry 10 performs well after the launch rush, investors can rest easy knowing that Research In Motion might have a secure future.
If that fails, don't fret -- Apple will be happy to take any and all investors that want to come crawling back.
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Latest Ratings for RIMM
|Jan 2013||Credit Suisse||Downgrades||Neutral||Underperform|
|Jan 2013||Evercore Partners||Downgrades||Equal-weight||Underweight|
|Jan 2013||Standpoint Research||Downgrades||Buy||Hold|
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