RIM filled to the brim?
Posted
Sep 24 2009, 01:04 PM
by
Tobin Smith
Rating:
Earnings for Research In Motion (RIMM), makers of the iconic BlackBerry smart phone, are just a few hours away, and it will be interesting to see what the numbers look like.
Wall Street expects a bottom line number at $1 per share on $3.62 billion in sales. Certainly, if RIM is able to dial up an earnings beat, it will be great news for the world’s leading smart phone maker. But regardless of whether RIM fills analysts' expectations up to the brim this quarter, our ChangeWave Alliance Research Network tells us that RIM remains the undisputed heavyweight smart phone champion.
According to a corporate spending survey conducted in August, Research In Motion maintains its huge market share dominance in the corporate smart phone market -- and remember, that it’s the corporate market that provides the lion’s share of RIM’s smart phone revenue.
Although distant rivals Apple (AAPL) and Palm (PALM) are slowly creeping higher in terms of those who say they’re likely to buy smart phones for their companies in the future, their respective market shares pale in comparison to RIM.
In terms of the overall smart phone environment, it’s here where the climate is not so rosy for RIM. According to our survey, 35% of corporate survey respondents report their company plans to buy smart phones next quarter. This number isn’t bad, but it is down slightly from the previous quarter.
Of course, the corporate smart phone market isn’t the only market for the BlackBerry. The company introduced its Storm touch-screen smart phone aimed at the consumer market last November, but that didn’t go so well.
However, RIM did hit the mark with the consumer sales of its Bold, Curve (pictured) and Tour models. It’s because of the recent success of these models that we could see a nice earnings report this quarter.
Now, from a trading perspective, RIMM shares have climbed about 14% since Sept. 1, and are nearing the June highs of over $85. This $85 market is a key resistance level, so from a technical standpoint it will be interesting to see if RIMM shares can break out on good earnings news.
I think if you own RIMM shares (and I do), then you should stick with the stock barring some kind of really bad earnings forecast. However, I don’t think now is the time to put new money to work in the shares. I currently rate the stock a hold, at least until I see an uptick in overall corporate smart phone planned purchases via the ChangeWave Alliance Research Network.
Tobin Smith owns shares of RIMM; however, he currently rates the shares a hold.
Related Articles
Smart Phone Slugfest -- iPhone3GS vs. Palm Pre
Slower Going IT Spending, But Recovery Continues
Score Big with 10 Touchdown Trades
