"Punk rock tried to destroy the metal
But metal was much too strong
Techno tried to defile the metal
But techno was proven wrong"
--From "The Metal" by Tenacious D
I'm starting to think that I've overestimated the threat posed to Research In Motion (Nasdaq: RIMM ) by the Apple (Nasdaq: AAPL ) iPhone, HPC Touch, and other recent smartphones. Having comparable or better products and services might not be enough to tear business customers away from their BlackBerries -- brand loyalty seems to outweigh those concerns at the moment.
RIM just reported a surprisingly strong fourth quarter. Sales more than doubled over last year, to $1.88 billion, followed by a 118% improvement in net income, to $0.72 per share. RIM added more than 2 million net new users, bringing the total to an impressive 14 million subscribers. The much-ballyhooed slowdown in consumer spending, and the possibility of pullbacks in corporate infrastructure budget, failed to dent RIM's momentum. The aforementioned competitors didn't hurt it much, either.
My longtime thesis on RIM has been that the BlackBerry ultimately must fall to commodity status, start competing mostly on price instead of charging a premium for upmarket products, and thus fade into bit-player irrelevance. But these recent results, in the face of a weak economy, a maturing iPhone, and a plethora of business-minded rival products from the likes of Nokia (NYSE: NOK ) and Samsung, are starting to make me doubt my assumptions.
Like techno and punk in the National Poetry Month tribute above, these waves of determined challengers have been crashing the BlackBerry party as hard as they can, but RIM has remained too strong to fall.
The company can't exactly rest on its laurels, of course. Motorola (NYSE: MOT ) may have essentially given up on business users, and Palm (Nasdaq: PALM ) might be heading for exactly the kind of fate I envisioned for RIM. But mighty Google (Nasdaq: GOOG ) has yet to join the fracas with its Android platform, and any of the would-be usurpers could come back with a miracle product or super service at any time.
But for the first time, RIM's two-star CAPS rating is starting to look stingy. Pull off another quarter or two of this, and this Fool might finally have to give RIM a reluctant thumbs-up.