Pulse Check Update: Will a New BlackBerry OS Refresh RIM?
The new BlackBerry 6.0 operating system landed with much fanfare Tuesday, but some analysts are not convinced it offers enough goodies for Research in Motion (RIM) to withstand the onslaught from Apple’s (AAPL) iPhone and smartphones based on Google’s (GOOG) Android OS.
RIM President and co-CEO Mike Lazaridis said the new OS 6.0 will be launched in the third quarter of 2010. According to Lazaridis, RIM has 41 million BlackBerry users to date, and the company has sold 90 million BlackBerries worldwide since it started selling the devices. (WirelessWeek) RIM hopes to reach more than 100 million users and Chief Operating Officer Don Morrison said there is still plenty of runway for smartphones. (EWeek)
The BlackBerry maker currently takes up about 45 percent of the U.S. market and plans on retaining it. Equity Research firm Broadpoint Gleacher has given RIM a “buy” rating with a target price of $90 as the company expects to earn $1.31-$1.38 per share in its May quarter. (Benzinga)
RBC analyst Mike Abramsky wrote in a research note on Tuesday that the new OS and browser has a more consumer-oriented interface that “may rival iPhone and Android but appears uniquely BlackBerry.” BlackBerry 6 may offer “RIM the opportunity to narrow competitive gaps and sustain leadership,” he added. (NationalPost)
Canaccord Adams analyst Peter Misek said the OS created a “big buzz” at RIM’s annual Wireless Enterprise Symposium in Orlando, Florida. Mackie Research Capital analyst Nick Agostino said it created a “shock and awe” effect among investors. (Reuters)
But John Paczkowski, technology blogger for website All Things Digital, said the new BlackBerry OS is “So 2008, So 2000 and Late” adding that it’s a laggard and nothing new to the market. (AllThingsD)
Citigroup analyst Jim Suva agrees that it won’t be an easy ride for RIM, which also has to compete with Google’s (GOOG) Android phones and devices from Microsoft (MSFT), Nokia (NOK.1) and HTC. “While we recognize RIM’s low global market share we see its core North America and enterprise market under attack and the consumer space innovation has increasingly become more intense and we believe this sets up for margin pressure as the future unfolds,” said Suva. (NationalPost)
Doug McIntyre of 24/7 Wall Street.com said the BlackBerry won’t be able to hold the business handset high ground forever. “There are too many alternatives for enterprise customers, many of which did not exist two years ago. RIM still offers proprietary servers which make it easier for IT departments to track phone use, but in a world in which cloud computing is growing, dedicated servers have lost much of their charm,” said McIntyre. (24/7WallSt)
However, some analysts remained optimistic on the future of the BlackBerry in overseas markets. Morgan Stanley analyst Ehud Gelblum wrote in a research note on Tuesday that RIM has an opportunity to gain market share in Europe, Latin America and Asia Pacific regions. With future potentials in big international markets, Gelblum said that “RIM has barely scratched the surface.” (TheStreet.com)
Broadpoint AmTech analyst Mark McKechnie said it’s true that RIM has seen tremendous growth in international markets as the company rolls out products at lower price points, but “we need to see them bring the fight back here to the U.S. and regain their positioning at the high-end (or higher-priced devices).” (DailyGleaner)
Meanwhile a possible acquisition by RIM of struggling rival Palm (PALM) has been speculated about on Wall Street, but it looks like those possibilities could be fizzling due to the high asking price of Palm.
Palm CEO Jon Rubinstein is reportedly seeking a buyer with $1.3 billion in cash to spend. That’s about a 50 percent premium above the company’s market cap today, and there is virtually no chance Palm shareholders will realize that price, according to Doug McIntyre. Taiwan smartphone maker HTC reportedly said it would take a pass on the purchase.
One possible contender to buy Palm could be China’s Lenovo, according to a report by Reuters late last week. With extra cash in hand and plans to strengthen its wireless business, investment bank analysts in Asia said Lenovo, which also bought out IBM’s PC business, may be the likely buyer.
Sheena Lee
Please see also Pulse Check – BlackBerry Stuck in Apple Jam and Pulse Check Update: Could Palm Fetch $14?
This post was based on Company Searches of Alacra Pulse for the companies mentioned.
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August 30th, 2010 at 3:22 pm
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