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Market Overview

Research in Motion, Sales of Company on Hold


Apple (NASDAQ: AAPL) reported earnings on Tuesday and absolutely crushed the estimates sending its shares sharply higher in after hours trading.

Both the iPhone and iPad sales had spectacular sales over the holidays, and revenue soared to $46 billion in the last quarter.

As much as Apple signifies the extreme success of its mobile platform, Research in Motion (NASDAQ: RIMM), the maker of the Blackberry, along with Nokia (NYSE: NOK), have seen their market share eroding away quickly.

While Nokia has partnered with Microsoft (NASDAQ: MSFT) to develop their next generation of smartphones, Research in Motion has been trying to stick to its own R&D.   However, it has been falling behind in its own development schedule, and its widespread service blackout in 2011 certainly did not inspire confidence.

There is no doubt that management was at fault at RIMM, and its co-CEO's, Mike Lazaridis and Jim Balsillie, finally stepped down in January. Thorsten Heins, RIMM's Chief Operating Officer, was promoted to the CEO job.

For a moment, the market greeted the news, believing that RIMM might be more willing to put the company up for sales.  However, that hope was soon squashed when Samsung denied any interest in buying RIMM, and Heins mentioned that he would not break up the company and there would be no seismic changes.

As a result, RIMM is now trading back to $15/share from its brief spike to ~$18/share.

As we wrote before, RIMM will certainly become an acquisition target, most likely by IBM (NYSE: IBM), once its stock price falls enough - but probably not until it reports a loss.  

If RIMM cannot stop the loss of market share (which it likely won't), that moment could come sooner than the company likes.


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