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Say ‘RIM Is Back’ With a Straight Face — I Dare You

BlackBerry maker Research In Motion (NASDAQ:RIMM) plumbed its 52-week low last Monday. But thanks to better-than-expected earnings and an upgrade, RIMM added more than 15% through today’s opening bell.

So is RIMM stock making a comeback?

All right, all right, I’ll let the laughter die down before continuing.

Who honestly believes in the long-term viability of BlackBerry smartphones or the forgettable PlayBook tablet? And who is longer than a few weeks tops in RIMM stock?

Consider that Apple (NASDAQ:AAPL) sold 5 million units of the iPhone 5 in its first weekend alone. And while Apple has the margins and user experience locked up, Google (NASDAQ:GOOG) is the clear leader in market share with its open-source Android OS in almost 7 of 10 smartphones globally.

Research In Motion and its BlackBerry platform? It’s in third place and moving phones like molasses … with less than 5% global market share. And if you add up legacy Symbian-powered phones from Nokia (NYSE:NOK) and the Microsoft (NASDAQ:MSFT) Windows phone OS together — the two joined forces in early 2011 — then Research In Motion gets bumped off the podium altogether.

Come on: Who do you know that uses a BlackBerry? Of those that do, have they ever used an iPhone or slick Android phone and not felt like they are missing out?

I’ll tell you who uses BlackBerry phones: my dad. He gives the typical BlackBerry endorsement: that he couldn’t live without a QWERTY keyboard.

Think this touch-vs.-tactile thing is overblown? I don’t. It speaks volumes for the archetype of BlackBerry users.

I love my father, but this is a guy who types with two fingers on his laptop, still makes drawings pixel-by-pixel in MS Paint, and for years while I was growing up, paid for both AOL (NYSE:AOL) and high-speed Internet because he didn’t want to figure out another way to use email. If AOL hadn’t made AIM and e-mail free, he still would be paying them a monthly fee.

In short, BlackBerry is the past … not the future. In a post-PC age, it is clinging to the PC keyboard, and it’s fair to read as much as you want into that fact.

OK, philosophical rant over. Let’s get to the meat:

Sure, RIM shares popped on better-than-expected earnings that included stronger sales than forecast, with a surprise rise in subscribers. But in regards to the bottom line, it was simply less bad — a loss of 27 cents as opposed to 47 cents. A much smaller shortfall to be sure, but still a company deeply in the red. RIM execs said the company will lose money every quarter in fiscal 2013. And it is projected to post an annual loss again in fiscal 2014. Revenue is caught in a downdraft ,too.

Research In Motion also had to address concerns about yet another network outage that, if it were to happen again, could obliterate confidence in the tech company. Make fun of the new Apple iPhone maps app all you want, but at least the entire phone doesn’t stop working properly.

There’s also the issue of Playbook selling a mere 130,000 units last quarter. Last quarter apple sold 17 million iPads. Amazon (NASDAQ:AMZN) is notoriously tight-lipped about the Kindle, but all experts calculated it selling easily north of a million units quarterly and perhaps selling as many as 7 million quarterly before this new Kindle Fire HD launch. Then there’s Samsung, unloading more than 2 million Galaxy tabs last quarter. The numbers speak for themselves.

Oh yeah, and a whopping 45 of the 47 brokerage firms following RIMM stock rate the shares a “hold” or worse, compared to just two “buy” ratings. There was an upgrade from Scotia Capital last week … but that was simply from underperform to sector perform.

And let’s not overlook the rather embarrassing cover of “Keep on Loving You,” where RIMM employees serenade developers, going viral – in a bad way. This is a company that looks desperate, not a company that you want to invest in.

What’s the compelling reason to believe in RIMM stock? Do you really think the BB 10 OS will be good enough to contend with Apple and Google, or just good enough to slow the bleeding? Do you really think the brand hasn’t suffered irreparable harm — akin to Kodak (PINK:EKDKQ), which once was an iconic name but eventually became synonymous with analog technology in a digital age?

Yes, the company has almost $2 billion in cash and short-term investments. But what can it acquire to fill in the gaps?

The PlayBook is doomed to fail. And while the BlackBerry remains viable for the short-term thanks to a new line of phones set for January release to a loyal core of BlackBerry users, it’s hard to believe the new line of RIM devices will go toe-to-toe with Android- and Apple-powered gadgets.

And even if they do? Well, if you take that huge leap of faith, that would only catch up Research In Motion on the technology side. It’s impossible for anyone who has followed the tech industry to ignore the cold reality that BlackBerry devices do not have “sex appeal” with consumers.

In short, the RIMM stock pop seems to be a short squeeze and a momentum shift based on the idea that this company might not go bankrupt as soon as some bears thought.

Trust me, BlackBerry and RIM will go the way of Palm eventually. They won’t go bankrupt this year or even next year. But it’s only a matter of time before this company disappears forever.

Further Reading

Jeff Reeves used to suffer the painful experience of a BlackBerry World Edition until his generous employer bought him an iPhone 4 a year or so ago. It changed his life.

Jeff is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing, he owned a long position in Apple but no other stocks here.

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Comments
  • http://profiles.google.com/pfezziwig Charlie Fezziwig

    Critics who have bashed this company relentlessly for the past year have changed their tune with the new OS and are impressed, Verizon and other carriers are backing it and developers love it. 80 million users with the oldest smartphone OS, now you dont think they will sell with the most modern OS? What more evidence do you need to change your mind apple fanboy…your iphone is going to look like the old Blackberry in 6 months..

  • paul sykes

    Is it possible to want to take this company private …

  • The C Man

    The author ought to visit the UK to see what is supposed to be a declining market for RIM. The young over here carry two phones. One will be Apple or Android but the other will definitely be a Blackberry and that is the one they use for actually making phone calls, sending texts and IM’s.
    Ask which they would give up and it won’t be the Blackberry. They are not buying new Blackberry’s because the build quality is so good that old ones suffice.
    They are the market for the BB 10 and they are prepared to wait for it so they can then dump what they consider toys.

    RIM might not be making sales but they are not losing their client base.

    I have a peculiar feeling the same thing may be happening in America and other countries.

    If RIM have got it correct then a lot of doom forecasters are going to look pretty stupid.

  • http://www.facebook.com/people/Susan-Antony/1784964840 Susan Antony

    “…What’s the compelling reason to believe in RIMM stock? Do you really think the BB 10 OS will be good enough to contend with Apple and Google…”
    As someone in the computer field for 25 years, yes I do think it will be every bit as good or better.
    What are your qualifications to judge OSes?

  • Pastor BlackBerry

    Well, we can say for sure that at least 4 people have read this poor excuse for writing.
    This is also 5 minutes of my life I’m never going to get back…

  • jnffarrell1

    Reread ‘Ode to a Louse’. Then criticize this article

  • free man

    I use an Imac desktop and a Macbook pro. I don’t like the way Apple is trying to corral me to all their products or the mess them made with Iphoto to try and lock me in. I like will be purchasing a BB10 device. Do you think it’s sexy to be hog-tied by and to one company?

  • http://www.facebook.com/rvanvuren Riaan Jansen Van Vuren

    What drivel. I will definitely get Blackberry 10. It will be the phone and OS of 2013! Come to South Africa where I live or go to Nigeria or Indonesia and you will see how popular Blackberry still is and how its market is growing in the developing world. Blackberry was just recently voted the most popular brand in South Africa for the 2nd year running. You conveniently forget that at some stage Apple was also down and out but recovered so RIM will be back.

  • Steve

    You are a moron! Blackberry has a loyal fan base. I have the blackberry bold 9900 and the iphone 5. I carry my Blackberry everywhere and my iphone I use for my internet business. I can’t wait for the Blackberry 10 qwerty phone! It gets the job done. I send 100′s of emails on the go everyday. There’s no way my iphone could handle sending those emails.

  • http://www.facebook.com/yves.charles.526 Yves Charles

    LOL..this guy is a joke. Jeff Reeves, get your head of your @ss. Really..

    Jeff Reeves
    used (your forgot “to”) suffer the painful experience of a BlackBerry World Edition until
    his generous employer bought him an iPhone 4 a year or so ago. It
    changed his life.

  • rim-pire

    You sir are a clown, the worlds fastest man uses a blackberry, the worlds most powerful man uses a blackberry, the CEO of your beloved apple uses a blackberry…. My 65 year old step father uses a iphone cause he thinks the apps are “neat” nothing cool about apple…unless your 65 and playing angry birds for the first time

    • Joe

      Don’t know about the CEO of Apple, but I know the CEO of Google (Eric Schmidt) uses a BlackBerry. http://ca.gizmodo.com/5311469/googles-ceo-is-using-a-blackberry

    • Joe

      Oh I love it when folks put their foot so deep down their own throat! I pity you, Mr. Reeves. As a journalist (or experienced blogger), you ought to get your facts straight before speaking out and beating up on a company that is already down, battered and bruised. RIM is still fighting, innovating, and actively supporting their clients and developers — no one is owning and loving their stakeholders right now like RIM has the last 2 years.

      You’re so wrong about RIM not seeing Apple & Android coming, but they had an aging OS that needed a fresh start. Few companies succeed at what RIM is about to accomplish, but RIM is doing it! RIM carefully chose a great path forward with QNX as the robust and proven platform, and now they’ve created a uniquely powerful user interface that is designed for the busy person juggling many different things… usually with only one hand on his phone! Yes, that would be me… and millions & millions like me!

      Success is in the cards, my friend. Millions of BlackBerry users are looking to upgrade to these BB10 devices — they’ve been patiently waiting. Sales will exceed expectations on the Street as not only will these phones be embraced by the 80+ million BlackBerry users worldwide, these phones will attract many of those users who have left for seemingly greener pastures, only to be disappointed. I know I will be upgrading early in February even if my contract ends next fall.

  • TH

    It really is good fun, all the bears with an internet connection bashing RIM for their money, even though they never even owned a handheld or playbook. The perception of BlackBerry by those who do not know the products is impressively far off. This is how bubbles develop, and it is also how stocks get heavily underrated. The market always catches up, and as always it is good to be ahead.

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  • No Bias

    two days in and you missed this one. Is it a just a short squeeze or is the the new operating system simply a better technology. Developers like the new platform. Should help develop apps which until now was the biggest stumbling block for RIM.

    The market has had a few days to digest the latest RIMM news and look at what happened at the most recent Blackberry Jam. 2nd day in row RIM is up, Apple is down.

    Today’s midday report
    RIM up 4.7%
    Apple down .5%
    Google Down .7%
    Nokia down 5%

    What does the market see that you missed?
    Oh, now i know why you call this site ‘the Slant’

    From Wikipedia
    “Slant can refer to: Bias or other non-objectivity in journalism, politics, academia or other field”

    Well chosen name for this blog. At least you got that right.

  • sdasda

    article = bull shit
    (bbos 7 – sucks pretty bad, ios – good, bb10 – lookign slick ao far)

  • Sam Pakbaz

    Jeff, you clearly are an Apple fanboy and, like the cult of apple, you think Jesus invented it. Look pal, Im a tech whiz, and I can tell you that your Apple product has sex appeal…so much sex appeal… that it looks the exact same way as it did 4 years ago. Wait wait, I apologize. It is now thicker and more rectangular. Other than the same upgrade that ALL phone manufacturers make, Apple hasnt really done anything to wow people for a while now. I use 2 phones. Guess which one is reliable and I trust with my business? Not my android. I wanted to grab one so I wouldnt be bias. And guess what? Its nice, but it freezes..crashes..and drops NOTICEABLY more calls. Once BB10 is introduced, I will be selling my galaxy for $200. I tried an Iphone as well, without prejudice, and it definitely didnt wow me. I sold cell phones and half the morons that bought the Iphone had no idea what it did! It just goes to show, that you idiots, purchase the iphone because you jumped on the band wagon. Ive am a financial advisor and I told a lot of my clients to invest in Rim when they were at $5.50. You do the math. Don’t give any advice if all of it is your own personal psychology without facts to back it up. Learn about business then start talking. Your beloved apple is not a good investment choice and neither is google. You probably also thought facebook was a good investment. Lucky for you, 80 million subscribers around the world have decided to stay loyal to a Canadian company who has made impressive tracks and completely restructured their business intelligently. Have a great one bud, if you werent such a knob, I might have tried to remember your name. Idiot. Cheers to all the RIM fans! Oh and ps, dont compare analog to digital. Rogers still used an analog signal and theyre more reliable than satellite. You shouldnt make fun of your dad publicly. Im going to take a stab at his character. He gets the job done, everytime. Without an excuse or delay, right? Because he uses what works and doesnt conform to new things to fit in. Also, took a look at the below comments. Guess everyone agrees you are an idiot. Great minds think alike. :-) cheers.

  • Segonku

    SLANT is perfect name for this site. Its obvious we have a fanboy on our hands here. Look at the very last line: “sorry blackberry clowns”. This guy’s the editor!?!?!

  • me

    Wow, what a biased douche bag. You should go write for teen magazine where this spin pop is the norm. Get a real job.

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  • steve jobs

    Blackberry clowns!!! Really, Reeves. Go suck an apple you biased fanboy, and get a real job.

  • tim cook

    SAY JEFF REEVES ‘IS A UNBIASED EDITOR ’ WITH A STRAIGHT FACE — I DARE YOU

    • http://twitter.com/JeffReevesIP Jeff Reeves

      I think you misunderstand the purpose of this site. It is not to objectively report facts but to provide commentary and opinion. My opinion is that by the end of 2013, BlackBerry will be in deep trouble akin to the last days of Palm. I could very well be wrong — but that is my opinion, based on RIM’s balance sheet and consumer electronics trends. Feel free to disagree.

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  • Steve Whitmore

    Rimm Stock is Back!!!!!!!!!

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  • Dennis

    I work in an engineering office with several electrical engineers, scientist, and computer programmers. I polled the office and here is what I found: 3 BB, 4 iPhone, 3 Android, and surprisingly 3 non-smart phone users. Most everyone had tried two or more different phone operating systems.

    I hope BB shakes up the marketplace with their new BB10 phones. I wouldn’t be so quick to dismiss them. After all, they were here first…

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