Sunday, 29 January 2012

Quick Stock Analysis - RIM

Research in Motion has had a wild ride.

From introducing a smartphone so popular it was nicknamed the "Crackberry" to being taken over by the iPhone in market share and seeing their founders Mike Lazaridis and Jim Balsillie being forced out of their own company.

What went wrong? No, RIM's products are not inferior. In fact, their platform has been recognized by the US government and a few others for its communication security. Adding to this is their easy to use patented keyboard which I personally find preferable over the touch screen keyboards, popular BBM messenger (which has been replicated - iMessage, KiK etc..) and strong battery life.

However, the reason the product has seen a collapse in American market share is the marketing campaign by Apple, and the openness of Google in the promotion of Android. The iPhone is neither a revolutionary product nor an amazing platform. It's appearance is - simply because the UI is so easy to use that my 8 year old brother is a magician on the iPad. When Steve Job's was leading the development of the iPod, he said it was essential that user's only had to click three buttons to play music. Anything more than that was simply too much. This principle has carried forward with Apple to this day, as their platform is an amazing user experience with easy to use features that often blow non technical minds away. It's the reason why the Mac and iPhone are the tools of choice for Starbuck's guppies and hipsters across the nation each feeling that their Mac makes them part of an elite crowd. The black silhouette dancing with the white signature iPod headphones was not only an amazing marketing campaign, but also a symbol that began the creation of the Apple cult.

 Samsung perfectly captured this in their video with the comment " 'I could never get a Samsung - I'm creative' - 'Dude, you're a Barista' ".  Frankly, iPhones are not an engineering marvel, but more of a design marvel that exemplifies the power of marketing and a clean user interphase to generate sales. However, if this video portrays the new iPhone 5 correctly, I will be first in line to get one.

Apple and Android both did something that RIM did not. They included developers. It is a widely known fact that Google and Apple both have far more applications ready for download than Blackberry. The reason is because both companies realized it was essential to keep developers in the loop to maintain innovation and also popularity. It's like Angry Birds - most likely would have never been dreamt up by Apple app creators, but created by Rovio Mobile. This one game has led to the attraction of the iPhone/iPod/iPad - and it occurred because Apple and Android both realized the necessity of involving outside talent in their product lines. Google has also done this with Android creating a community of developers. RIM, on the other hand, just recently has tried to appeal to developers - but like it is very difficult to steal a girl from a boyfriend who took her to Paris for her birthday - it's very difficult to bring a devoted developer over to another platform.

The last problem with RIM is it's organizational culture, which is an add on of their problem courting developers. Expressed by a RIM executive in an open letter calling for culture change, the corporate culture of suits, ties and bureaucracy is simply not a culture that creates successful Technology companies. RIM has need a culture change for a while now, a change that is attractive to the programming talent available.

So can RIM turn it around?

Financially they are not at rock bottom, book value for the company is around 14.5 a share, so they are definitely a buy around there. Internationally, the Blackberry is arguably one of the most popular phones in the world outside of North America. Also, their secure platform makes them popular for corporations and governments. The only place where they have been hit is by the North American consumer, which is a rather large hit as their decline suggests. Frankly, I think their new CEO will be able to to turn the company around and I am very happy with this statement he made:

"When Blackberry got positioned the way you experienced it, it was on a set of values: battery life, network efficiency, security and best typing experience," Mr. Heins said. "In the U.S. specifically, what we missed is a shift in those paradigms" to more consumer orientated features like Web-browsing and apps, Mr. Heins said. 

Thorsten Heins comes from Siemens, a very technology successful company and I believe he has the vision to turn RIM and the Blackberry brand around. The stock price looks very attractive right now with an EPS of around 4.2, so I recommend this stock as a buy. Try to pick it up around 16, but don't be greedy. Already expectations are low by analysts, if RIM even moderately succeeds the stock price could shoot up dramatically.


Anonymous said...

Excellent summary, Alex. You sure, though, that the book value is at 14.5 per share? Yahoo says it's at $19.77.

Alex said...

A friend of mine calculated it a month ago or so, I was taking the value from him. Maybe he used a more conservative method.

Discount stock broker said...

Great site and a great topic as well i really get amazed to read this.I be taught one thing tougher on different blogs every day.

Gege Dai said...

ralph lauren femme
toms shoes sale
michael kors outlet
tory burch outlet online
nike blazer high
prada shoes
nike air max uk
replica watches for sale
toms shoes for women
soccer outlet
gucci borse
longchamp outlet online
cheap air max
coach outlet
sac louis vuitton
longchamp sale
michael kors handbags
burberry handbags
chanel online shop
cheap jordans uk
burberry outlet
polo outlet
abercrombie and fitch
ray bans
kate spade
coach factory outlet
burberry outlet online
louis vuitton sito ufficiale
michael kors bags
ed hardy clothing outlet
coach factory outlet
nike blazer pas cher
sac louis vuitton pas cher
cheap snabacks
kate spade bags
coach outlet store online
cheap soccer jerseys

John said...

louis vuitton purses
ugg boots
replica watches
ray ban sunglasses outlet
toms outlet
cheap jerseys
kobe 8
swarovski crystal
tods outlet store
oakley vault
tod's shoes
ray ban sunglasses uk
ralph lauren
michael kors outlet
nike huarache shoes
lebron 12
mulberry uk
michael kors outlet online
chanel handbags
prada handbags
kobe 9
ray ban sunglasses outlet
jordan concords
hollister clearance
official coach factory outlet
louis vuitton outlet
coach outlet store online clearance
coach outlet online
christian louboutin shoes
louis vuitton outlet
kobe 11
tiffany and co
louboutin femme
polo outlet
ralph lauren outlet
oakley sunglasses
ray ban sunglasses
ray ban outlet

方松腾 said...

oakley sunglasses
cheap ray ban sunglasses
oakley sunglasses wholesale
bottega veneta outlet online
ray ban sunglasses
ferragamo shoes sale
tory burch outlet
oakley sunglasses wholesale
true religion jeans
chaussure louboutin
babyliss pro
coach factory outlet
cheap oakley sunglasses
burberry outlet
fitflops clearance
tiffany and co jewelry
ghd uk
true religion jeans
birkenstock sandals
ralph lauren outlet
lululemon pants
louis vuitton pas cher
fitflops shoes
ralph lauren uk
polo ralph lauren
lululemon outlet
fitflops shoes
ferragamo outlet
lacoste pas cher
michael kors uk

chenlina said...

rolex submariner
cheap nfl jerseys
louis vuitton handbags
polo ralph lauren
juicy couture
adidas originals store
oakley sunglasses
adidas shoes
oakley sunglasses
nba jerseys
michael kors handbags
christian louboutin outlet
ugg outlet
oakley sunglasses
pandora outlet
hollister uk
beats by dr dre
michael kors outlet
michael kors outlet
nike air max 90
michael kors handbags
nike huarache
coach outlet
cheap jordan shoes
hollister clothing
true religion
ray ban wayfarer
michael kors purses
replica watches
nike air jordan
michael kors outlet
tods outlet online
louis vuitton outlet stores
michael kors handbags
louis vuitton outlet online
kate spade
oakley sunglasses
lebron 13
kate spade handbags

استثمار عقارى said...

الشرق الاوسط من اهم شركات نقل العفش بالدمام متحصصه فى نقل عفش واثاث بالدمام ونقل العفش بالخبر كما انها توفر شركة نقل عفش بالجبيل والخبر وشركة نقل عفش بالقطيف والاحساء وجميع خدمات نقل العفش والاثاث بالمنطقة الشرقية بارخص اسعار نقل عفش بالدمام وتقدم ايضا شركة تخزين عفش بالدمام والخبر
نقل عفش بالدمام
شركة نقل اثاث بالدمام
شركة نقل اثاث بالخبر
شركة نقل اثاث بالجبيل
شركة نقل عفش بالخبر
شركة نقل عفش بالقطيف
شركة نقل اثاث بالاحساء

استثمار عقارى said...

كما انها متخصصه فى النظافة وتنظيف المنازل ونظافة بالدمام والشقق والبيوت والفلل والكنب بالدمام
شركة غسيل كنب بالدمام
شركة تنظيف كنب بالدمام
شركة نظافة بالدمام
شركة تنظيف موكيت بالدمام
شركة تنظيف سجاد بالدمام
شركة غسيل مكيفات بالدمام
شركة غسيل خزانات بالدمام
شركة مكافحة حشرات بالدمام
شركة نظافه عامه بالدمام
شركة تنظيف منازل بالدمام
شركة تسليك مجارى بالدمام
شركة غسيل فلل بالدمام
غسيل عمائر بالدمام

استثمار عقارى said...

شركة نقل اثاث بالدمام التفاؤل شركة نقل اثاث بالخبر كما انها افضل شركة نقل اثاث بالجبيل نقل عفش واثاث بالجبيل والخبر والقطيف والدمام
شركة نقل اثاث بالدمام
شركة نقل اثاث بالجبيل
شركة نقل اثاث بالقطيف

استثمار عقارى said...

اهم شركات نقل العفش والاثاث بالدمام والخبر والجبيل اولقطيف والاحساء والرياض وجدة ومكة المدينة المنورة والخرج والطائف وخميس مشيط وبجدة افضل شركة نقل عفش بجدة نعرضها مجموعة الفا لنقل العفش بمكة والخرج والقصيم والطائف وتبوك وخميس مشيط ونجران وجيزان وبريدة والمدينة المنورة وينبع افضل شركات نقل الاثاث بالجبيل والطائف وخميس مشيط وبريدة وعنيزو وابها ونجران المدينة وينبع تبوك والقصيم الخرج حفر الباطن والظهران
شركة نقل عفش بجدة
شركة تنظيف خزانات بجدة
شركة نقل عفش بالرياض
شركة نقل عفش بالطائف
شركة نقل عفش بالدمام
شركة نقل عفش بمكة
شركة نقل عفش بالمدينة المنورة
شركة نقل عفش بينبع

Post a Comment