How Low Can Research In Motion Go?

Shares of Research In Motion (Nasdaq: RIMM  ) hit a 52-week low today. Let's look at how it got here and see whether dark clouds lie ahead.

How it got here
Despite pioneering many aspects of the current smartphone industry, Research In Motion has been the most apparent victim of the runaway successes of Apple's (Nasdaq: AAPL  ) iPhone and Google (Nasdaq: GOOG  ) Android. The once-innovative company fell behind the times as rivals leapfrogged it, leading to consistent market-share losses.

Even the much-needed management shakeup has given investors little hope for a meaningful turnaround, since the company has continued to be plagued by product delays and uninspiring device launches.

RIM kicked off this month by unveiling BlackBerry 10, the next major version of its operating system that literally everything is riding on, leveraging its $200 million QNX acquisition. While the OS was an improvement from the current BlackBerry 7 OS, investors clearly weren't impressed, as shares subsequently dropped 16% within the first three days of May.

BB 10 is expected later this year, but it doesn't look like it has a good shot of turning around RIM's losses in market share, which has now fallen to 5% in the United States.

How it stacks up
Let's see how RIM stacks up with its mobile rivals.

RIMM Chart

RIMM data by YCharts

We'll add some fundamental metrics for a deeper read.

Company

P/E (TTM)

Sales Growth (MRQ)

Net Margin (TTM)

ROE (TTM)

Research In Motion 5.3 (24.6%) 6.3% 12.2%
Apple 13.6 58.9 27.1% 47.1%
Google 18.3 24.1% 27.1% 19.6%
Microsoft (Nasdaq: MSFT  ) 11.2 6% 32% 38.2%
Motorola Mobility (NYSE: MMI  ) NM 1.5% (1.9%) (5.1%)

Source: Reuters. TTM = trailing 12 months. MRQ = most recent quarter. NM = not meaningful.

Apple is RIM's closest competitor, as both companies offer an integrated hardware and software package, while Google and Microsoft are primarily software players. Of course, that's about to change as Google prepares to swallow Motorola whole, giving it a hardware division.

Microsoft's market share in the first quarter was 2%, but I still think it will soon overtake RIM to become the No. 3 smartphone OS.

What's next?
RIM has little to look forward to right now. It continues to lose traction in the enterprise and government sectors and has long lost its place in consumer mindshare. David Einhorn is wrong.

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Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Microsoft, Apple,mand Google. Motley Fool newsletter services have recommended buying shares of Google, Apple, and Microsoft, and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (3) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 15, 2012, at 10:55 PM, tychicum wrote:

    RIM can go on forever. But it's share price will be penny stock shortly ...

  • Report this Comment On May 16, 2012, at 8:24 AM, tonyrenier wrote:

    Considering the fact that RIM is still gaining users worldwide I find these "myopic, ethnocentric" articles ridiculous.

    Anyone needing a secure modile communications system still uses RIM. No one else has the infratstructure that RIM has and no one vetts apps like RIM.

    Do your research!

  • Report this Comment On June 25, 2012, at 7:08 PM, Carrzy wrote:

    People should research before they start typing...both the Canadian and the American Government, which includes Military Branches, use Blackberry and have been using them forever. The worst thing that could happen to RIM is if Microsoft buys them out and uses the patents that RIM holds. RIM has learned that they need to adapt and make more retard proof phones like the iPhone.

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