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After Today, Will Research In Motion's Rally Vanish?

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Longtime observers of the smartphone space have been scratching their heads over the past few weeks, a period that saw the stock of some of the most dominant companies in this blossoming space, most notably Apple (Nasdaq: AAPL  ) , slump dramatically, and the runts of the litter -- fallen giants such as Research In Motion (Nasdaq: RIMM  ) and Nokia (NYSE: NOK  ) -- stage improbable rallies. 

The stock market is an unforgiving place, but it seems investors are willing to give both RIMM and Nokia second chances, as positive news regarding their new and upcoming products have reminded investors these companies aren't entirely dead yet. Indeed, Research In Motion's shares have spiked more than 40% over the past month, while Nokia finds its shares also up an enviable 24%. However, some news emerged today that might give pause to believers in the RIMM comeback story.

Not so fast
RIMM's shares crumbled today, falling a startling 10.5% on news that its share of the U.S. smartphone market has crumbled over the past 12 months. The report from Kantar Media revealed that the Canadian handset maker's share had fallen from 8.5% to a meager 1.6%, which naturally spooked investors. 

That wasn't the only bad news for Research In Motion that the report contained. Perhaps more alarming than the American market figures alone, RIMM lost ground in nearly every market reported in the survey, with Germany being the lone winner, where it increased its market share 0.9%. Equally ugly, Symbian OS, the software that powers Nokia's feature phones, also saw its market share erode in every market contained in the survey. However, Symbian is decreasing in its importance within Nokia's overall strategy. The company has partnered with Microsoft (Nasdaq: MSFT  ) to help the world's dominant PC software company make a dent in the smartphone market, where its current presence is negligible. These figures fit with the broad trends we've seen in the global smartphone market over the past several years.

The report did contain another major surprise, though, revealing that Apple's iOS had unseated Google's (Nasdaq: GOOG  ) Android smartphone OS from its top spot in the U.S. market. However, Android easily maintained its lead in every other market in the survey, according to Kantar, and that's been the broad trend, with Google's free operating system proving an attractive option for a myriad of handset makers.

What it all means
Today's report goes a long way toward reiterating the current balance of power in the smartphone market. Although the recent bullishness surrounding Research In Motion and Nokia speaks to their potential rebounds we'll see play out in the coming months, they'll still have a long way to go before they become legitimate challengers to the duopoly in the space. Both Nokia and Research In Motion have seen their shares fall precipitously over the past 12 months, making at least some kind of rally seem understandable. However, investors interested in the space should be wary of these stocks, especially at the more elevated levels they sell for today.

There is absolutely no argument that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and, more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Read/Post Comments (4) | Recommend This Article (1)

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 November 27, 2012, at 10:40 PM, CZZZZZZ wrote:

    iOS becomes the oldest OS on the market in February when BB10 comes out. Smartphone OS's don't get better with age, its been evident for the last year with no real innovations coming out for the iPhone...NFC in fall 2013, thats embarrassing.

    Once the tech savy get their hands on BB10 the differences will be strikingly obvious in comparision, much like comparing an iPhone 5 to BB5 today.

    Suggesting the oldest OS will remain competitive is a stretch in this rapidly evolving tech space, 5 year old OS are ancient, the bulls have it right in this case with RIMM

  • Report this Comment On November 27, 2012, at 11:19 PM, chastenruin wrote:

    NFC isn't really deployed on the consumer side. Why build in a capability and increase device cost when there is absolutely no demand for it by the end user?

    Linux is at the core of Android, a 20+ year old OS. What's your point here? If anything, iOS is more mature and has wider platform support. That means its more stable and predictable especially since it is optimized for each phone Apple makes.

    Your argument makes absolutely no sense. To expect RIMM to do better when BB10 comes out after their corporate customers are abandoning them, the device market share is plummeting, and all their hopes are pinned on a new OS competing against iOS and Android having 95% market share, is, frankly, a stupid bet.

    RIMM is done being a major player. Very few software developers will want to add yet another platform to support, especially one with 0% market share that is struggling financially.

  • Report this Comment On November 28, 2012, at 12:42 AM, RandomMeaning wrote:

    czzz, you do know BB10 is just a variation of QNX right? Which is hardly "new". And who gives a rip about "old"? People care about "does what I want well". Which is why "old" iOS is selling even more iPhones and iPads (in the tens of millions) with an even higher satisfaction rate than before (industry leading by a huge margin).

    As for BB10, first they have to deliver it. But wait, they already did. It was called the Playbook. I wonder how much market share that captured? Funny how it doesn't even show up in statistics anymore. Well not really funny. It just doesn't have enough sales to be noticeable.

  • Report this Comment On November 28, 2012, at 4:20 AM, PaulDEJ wrote:

    RIP, Rim, Really? Haha InfoThatSucks! If only RIM can get rid of those pesky 80 million subscribers and that wonderful new BB10 that everyone loves, then maybe RIP.

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