It’s getting tough for Waterloo’s Research in Motion to impress analysts and investors. Despite an impressive quarterly update that surpassed analyst expectations, RIM’s share price rose only minimally.
Its dominance of the corporate segment. Though in reality, this notion is simply touted by companies like Dell that are now making their own phones to use for enterprise purposes—not because their phones are better, but just to create this negative buzz around the Canadian BlackBerry maker. Negative buzz abound, according to The Province:
“Questions remain,” says one Friday note, hours after RIM posted strong third-quarter numbers and said profit, shipments and sales in the current quarter will also beat expectations.
“Momentum fading,” warns another. “Clear signs that the next [quarter] should be a bad one,” intones a third.
Analysts on Friday picked over RIM’s relative weakness in the U.S., the most saturated and valuable smartphone market, and its rising inventory levels, which RIM said was due to a burst of orders ahead of the Christmas shopping season.
“While sell-in of new models, higher holiday inventory, and a larger international mix explains some of the increase, we continue to believe an inventory correction looms in RIM’s future,” Morgan Stanley analyst Ehud Gelblum wrote in a note.
Why RIM remains a serious contender is the fact that its Playbook has’t even shipped yet. Spec-wise, it’s apt to be the best tablet on the market. And if it’s picked up by enterprises—something no other tablet has a real shot at—it could easily climb to the second best-selling tablet, behind only the iPad. And once all models run on RIM’s new OS 6, and eventually its QNX tablet software, RIM will be right back up there with the very best of them.
People who have lost faith forget that RIM is founded on quality, enterprise use, and security. And these are three principles that have never faltered, and that will always be in demand. RIM has lost momentum in 2008 and 2009, yes, but not revenues or profits, and 2011 has huge potential.