4 Areas Research In Motion Investors Have to Watch

It goes without saying that Canadian smart device maker Research In Motion  (NASDAQ: BBRY  ) has seen more dark patches and recent bright spots over the last 18 months that many companies see in a lifetime. Left for dead by most tech investors, the company's stock price fell almost 90% from its all-time high in 2008 as a series of humiliating management blunders and the entry of several massive competitors eclipsed the once-king of the smartphone market. However, after purging its upper ranks and installing CEO and President Thorsten Heins a year ago, the company has undergone a transformation that has the potential to serve as a full-fledge resurgence for RIM (albeit an unlikely one).

Regardless, the company's share price has been on an absolute tear lately, doubling over the last six months and instilling a newfound hope in many that had given this company up for dead. With the impending launch of its next-gen BlackBerry 10 mobile OS due Jan. 30, the future seems as murky as ever for Research In Motion. And it was in that spirit that the Fool recently compiled a premium research report on RIM to highlight its long-term outlook. Included in the text below is a brief excerpt of this report. Enjoy!

The four areas you MUST watch

  • BlackBerry 10: Hands down, BB10 is the most important factor right now that will absolutely make or break RIM. Domestic sales of existing BlackBerry 7 handsets are on the decline as consumers wait for the next-generation platform or lose patience and defect to iOS, Android, or Windows Phone. Even additional delays could be fatal, since after numerous holdups already, consumers might lose confidence in RIM's ability to ever deliver BB10. Quite literally everything is riding on BB10, and if it flops with consumers, RIP RIM.
  • Emerging markets: BlackBerry 7 device sales are relatively healthier in emerging markets, where less mature networks rely more heavily on RIM's compression technology. IDC recently said that Android has now overtaken BlackBerry as the top smartphone platform in Indonesia. As previously mentioned, international sales are still on the decline, but less so than domestically. RIM could choose to strategically fall back and regroup by focusing on rebuilding its position in emerging markets.
  • Cash: Last quarter was a sigh of relief for investors, as the sequential increase in RIM's cash position was certainly positive. RIM needs to conserve cash to give it more time for its turnaround, so investors need to keep a close eye on its coffers.
  • Licensing: With weak BlackBerry hardware shipments, licensing out BB10 has been a hot topic of discussion. CEO Thorsten Heins is open to the idea of licensing out the new platform as an alternative that may help RIM regain some market share with the assistance of third-party OEMs. This would be a major strategic shift for the company, but it may also be just what RIM needs right now.

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Read/Post Comments (12) | Recommend This Article (2)

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 January 17, 2013, at 12:24 AM, TimKnows wrote:

    Why was this published?

  • Report this Comment On January 17, 2013, at 2:44 AM, JohnBSAnthony wrote:

    Although there were some very valid points made by InfoThatHelp, there are some very obvious inaccuracies that need to be adjusted. Waterloo is far from a ghost town, and to reference empty streets and buildings is a blatant lie. I live in KW and this is very far from the truth. And it is very hard to consider this area as "rural" either. Waterloo region boasts a population of nearly 1 million. This is first hand knowledge.

    I do, however, agree that the outlook for bb10 is bleak at best. Smartphones are much like viral videos; some take and others don't. Unfortunately for RIM, they have a tarnished reputation and they aren't pioneering technology like they did in the early days. From my perspective, RIM will be a great catalyst to make money until the release of their new product. I can very easily see stocks hitting 20 dollars before January 29th... As for the latter days following release, flip a coin. There is too much riding on how the public takes to the new product. With that being said, I don't think that this product is being marketed effectively nor do I know too many people who have had blackberry phones in the past that would want to "suck up their pride" and relapse back to the BB world to potentially be disappointed.

    Waterloo is the birthplace of the blackberry and when you see vast numbers of people making the switch from BBs to android devices and iPhones, it's hard to be optimistic about the future.

    Until I see new technology that RESEARCH in Motion has developed, (not plagiarized), I will remain a loyal iPhone user.

  • Report this Comment On January 17, 2013, at 2:58 AM, bb10fool wrote:

    When i read the review section of the news about BB10 i always find out who is long and who is short. For better understanding of RIMM i suggest you to check the website called crackberry, i found out that website very useful and not biased. First of all BB is not rimm that we used to know and i ignored any bad comments or news about BB10, nobody knows how functional or non functional it is, so people should stop giving sharp comments for both success and failure. The Android does not offer any secure solution and all over the place, ios does not bringing any revolutions to the market anymore, people are running away from their windows computer so you can not wait them to use win8. Maybe BB10 can change this because it is not the same rimm, now they have qnx on their back and qnx is the highest quality linux so no ubuntu phone can overcome bb10. Android 5.0 will bring many new features and ios 7.0 also but they are not in the market yet and rimm has time to obtain its lost customers. Rimm is not dead or going to consolidate, or the company is going to be sold, they are working really hard to work out and i am sure they are not gilding the stock for a fancy sale or merge. Lets wait Jan. 30 to see what they are gonna offer, and then talk about the future of the company.

  • Report this Comment On January 17, 2013, at 4:28 AM, PaulDEJ wrote:

    Please, InfoThatSucks has never in his life made any valid comments, he can barely string together two words never mind a coherent thought, hence his pathetic and pitiful ramblings on here. He keeps on professing RIM and QNX is dead, yet the company is alive and well, stock keeps going up, superior OS on its way in two weeks. If this is what a supposedly dead company looks like then I think there is many companies out there that wish they could be dead!

    Like I told him before, his BB10 device is reserved for him, he can just go pick it up after the launch and start experiencing a new, fresh and truly innovative OS, you don't have to be stuck with Apple.

  • Report this Comment On January 17, 2013, at 6:59 AM, NoaJava wrote:

    @InfoThatHelp: You may repeat the word Java 12 times and write a long text explaining why you do not like Blackberry, but there is a big mistake in your text.

    As surprising as it may be, BB10 does not rely on Java any more. Your whole argumentation is completly invalid. Just check your facts before spreading wrong asumptions: BB10 is based on Qt and is a C++ platform!

    Now you can try to find other argument or start talking about things you know...

  • Report this Comment On January 17, 2013, at 7:52 AM, digitally404 wrote:

    This may surprise people, but Android is actually Java based.

    And BB10 cannot fail at this point. The question is how big of a success it will become. Will it steal 40% market share? Not likely. Can it steal 10% market share? I think it's very likely, and that market share would make it a tremendous success.

  • Report this Comment On January 17, 2013, at 7:55 AM, magnaman1969 wrote:

    Infothathelps is an ex RIM employee who is very bitter that he was let go. Take anything he says with a grain of salt.

  • Report this Comment On January 17, 2013, at 8:08 AM, magnaman1969 wrote:

    Author/Fool:

    The points you attempted to make are all easily answered:

    BB10- Everyone already knows that everything is riding on BB10 success. Nobody would be investing in RIM if there was no new OS coming to market. Everything from positive carrier reviews, positive analyst reviews, positive Blogger reviews have all been documented. BB10 raises the game in the smartphone area. RIM has been doing a great job of targeting their core users for the early adoption phase...and then it will cascade out to the Consumer.

    It is an awesome business tool....efficiently saving time and bringing all of your data points together with Peek,Flow and Hub....these same features will appeal to the hyper connected youth market as well.

    Emerging markets- BBM is a staple in emerging markets and RIM raises it's game here with BB10 introduction of BBM Video (with share screen capability) and even more so with BBM Money. The ability to transfer money with BBM will be huge in emerging markets/developing nations. Also keep in mind RIM has quietly been partnering with carriers in these areas to develop networks and will be capitalizing on those networks. RIM is alos introducing (6) phones with BB10 that target each price point. They understand their markets well and have a plan to build on it.

    CASH- they have 3 billion in cash as of 2 weeks ago.....this money WAS an important indicator as we needed to be sure they had the money to launch....they do...and they will. Once launch cash will grow with BB10 initial demand. Not sure what your point is there...

    Licensing- Heins has already stated they would consider licensing. Although not as lucrative as vertical integration...it does allow for rapid market share growth (see Android). They have stated that they will first launch the OS before doing a licensing deal....as this gives them better leverage in any deals to be had. I am sure that HTC will be first in line and that we will see Chinese hardware makers in significant numbers looking to make a deal. everyone needs a hedge against Google/Android as they are already vertically integrated with the motorola deal.

    The areas you feel that RIM investors should watch are the same one Apple investors would be wise to watch as well in RIM...BB10 is a monster OS and will allow RIM to solidify the 3rd position and slowly eat away at Droid and Apple market share.

    Go Long

  • Report this Comment On January 17, 2013, at 8:23 AM, TimKnows wrote:

    InfoThatSucks - is our own village idiot, every village has one and we have an ex employee of RIM here.

  • Report this Comment On January 17, 2013, at 12:12 PM, joebuck26 wrote:

    "InfoThatSucks - is our own village idiot, every village has one and we have an ex employee of RIM here."

    Indeed or that he must have went long when it was $148 and sold when it was $6.50. Now he can't man up to blame himself for his own stupidity.

    InfoThatHelp all you do is bash RIMM (see his comments history) and you don't know jack about RIMM. If you don't know anything about technology, don't try to copy and paste from other posts/blogs while trying to sound smart.

    "Rim is built on Java, getting rid of Java equates to getting rid of Rim." - you're truly an idiot and lacking the brain to even Google to DD your own argument.

    Java Developers

    Java Developers may find themselves torn when migrating to BB10. The only supported path to write in Java is by taking advantage of the Android Runtime bundled into BB10. However, this path should only be considered for Java developers with extensive Android experience as it has some big drawkbacks. The biggest one being that the Android Runtime is limited to to apps built on the Android 2.3 SDK. The Android 2.3 SDK was built first and formost for Android phones, and is now almost two years old.

    In my opinion, the best path forward for a Java developer wanting to get started on BB10 is to jump headfirst into Cascades development. As with the others who aren’t as comfortable with C++ there will be a learning curve, but you’ll find a lot to like about Qt (which Cascades is built ontop of) and QML.

  • Report this Comment On January 17, 2013, at 12:14 PM, joebuck26 wrote:

    http://www.newyyz.com/ntgsite/2012/07/3782/

    Java Developers

    Java Developers may find themselves torn when migrating to BB10. The only supported path to write in Java is by taking advantage of the Android Runtime bundled into BB10. However, this path should only be considered for Java developers with extensive Android experience as it has some big drawkbacks. The biggest one being that the Android Runtime is limited to to apps built on the Android 2.3 SDK. The Android 2.3 SDK was built first and formost for Android phones, and is now almost two years old.

    In my opinion, the best path forward for a Java developer wanting to get started on BB10 is to jump headfirst into Cascades development. As with the others who aren’t as comfortable with C++ there will be a learning curve, but you’ll find a lot to like about Qt (which Cascades is built ontop of) and QML.

    C/C++ Developers

    Anyone who’s already familiar with C or C++ should definitely jump into native development on BB10. Those comfortable with low-level C may even want to stick with it by using the NDK, especially for Game Development. Otherwise, Cascades will development will be very easy to get into, and those with Qt experience will have an even easier time. The biggest task for developers familiar with C or C++ will be exploring all the components provided by the Cascades UI library.

  • Report this Comment On January 18, 2013, at 12:46 AM, TurboCrapper wrote:

    InfoThatHelp, let me guess... you stuck a Blackberry up your butt and you can't get it out.

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