BlackBerry maker Research In Motion (Nasdaq: RIMM) is on a roll. The stock took a 5% leap yesterday on news of an analyst upgrade, and now trades 48% above the 52-week lows it set at the end of August.
So what did Jefferies analyst Peter Misek say that would lift RIM to such heights? Well, it's probably not what you'd think. Rather than heaping praise on the BlackBerry platform, Misek explained that the QNX software the company bought from Harman International Industries (NYSE: HAR) earlier this year should replace BlackBerry sooner than expected.
That's a backhanded compliment if I ever heard one. RIM has poured untold millions into developing the BlackBerry platform, maybe even billions. To replace that legacy with a quick $200 million acquisition seems ludicrous. It's an outright insult to the BlackBerry development team, and a tacit admission that the source of RIM's golden eggs so far is running out of glitter.
Then again, that much has been obvious for quite some time. Apple (Nasdaq: AAPL) stole much of RIM's thunder when it introduced the first iPhone, and Google (Nasdaq: GOOG) piled on with the Android platform to deflate RIM even further. If QNX can turn that tide and persuade leading network partners Verizon (NYSE: VZ) and AT&T (NYSE: T) to provide marketing muscle for a rejuvenated platform, it doesn't really matter whether it's called BlackBerry or QNX -- or perhaps QNXBerry. All is fair in war and business.
So Misek upped his price target on RIM's stock from $55 a stub to $80, which is a pretty major upgrade on the strength of a potential software update. For what it's worth, I agree that RIM needs to turn a few new stones to find a new source of growth or else risk getting buried under a mountain of apples and androids.
Is QNX the magic bullet RIM so desperately needs? I'm not so sure. Let's hold off on the enthusiasm a bit until we've seen finished RIM products running the new software -- and heard from the horse's mouth that the baton is about to get passed. For now, it's nothing but educated conjecture.
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