Raspberries for Blackberry Maker
RIM's legal setbacks have come at an inopportune time. On both the hardware and software sides, competition for RIM's BlackBerry offerings seems to be heating up. Palm (PALM), for instance, has found success with its Treo smartphones, which offer wireless email and other features found on RIM's devices. Meanwhile, in recent months, industry giants Nokia (NOK) and Microsoft (MSFT) have rolled out software that competes with RIM's BlackBerry service.
"You're seeing Palm and Samsung taking their market share from them, which I don't think they're about to get back so quickly," says Rothbort, who has no position in either company.
And some observers see things only deteriorating from here. What has set RIM apart is its push-email service, which instantly syncs mailboxes on mobile devices with corporate email servers. But with the increasing prevalence of high-speed wireless networks, that differentiation is starting to matter less and less, argues Dave Schamens, a buy-side analyst at Invictus Funds.
Such networks will allow fast delivery of email no matter what the protocol, he argues, meaning that customers won't necessarily have to use RIM's system. Moreover, such networks will allow for much more sophisticated data and applications, Schamens says. Essentially, the mobile device is becoming the new desktop computer, he argues. And as that transition is made, Microsoft, not RIM, will be the best positioned to take advantage of it, because of the software behemoth's entrenchment on desktop computers and among corporate customers."The bottom line is the competition is closing in on RIM," says Schamens, whose firm is neutral on RIM owning shares in the company and put options. "RIM will just become another product manufacturer." And there's not much special in that.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV