RIM Could Move Higher on Lower BlackBerry Prices

Research in Motion(RIMM) competes with other mobile phone makers like Motorola(MOT), Nokia(NOK) and Apple(AAPL).

We currently have a Trefis price estimate of around $72 for Research in Motion's stock, about 25% above the current market price of around $57.

Trefis members have created forecasts for two key drivers of Research in Motion's stock over the last week: (1) BlackBerry gross profit margin and (2) BlackBerry phone pricing. The members' forecasts suggest that BlackBerry Gross Profit Margin will trend roughly in line, while BlackBerry Phone Pricing will trend above the Trefis forecast. These projections suggest a combined upside of around 3% to RIM's stock.

We estimate that BlackBerry Phones constitute around 48% of the $72 Trefis price estimate for RIM's stock. Hence the stock is quite sensitive to (1) BlackBerry Gross Profit Margin and (2) BlackBerry Phone Pricing. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

The average of forecasts for BlackBerry gross profit margin created by Trefis members indicated a projected decrease from around 35% in 2010 to around 29% by the end of the Trefis forecast period, mostly in line with baseline Trefis estimate over the same period. The member estimates imply a downside of 1% to the Trefis price estimate for Research in Motion's stock. In the past, BlackBerry gross profit margin has decreased from 40% in 2003 to around 36% in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Research in Motion's stock to BlackBerry gross profit margin.

The average of forecasts for BlackBerry phone pricing created by Trefis members indicated a projected decrease from around $307 in 2010 to around $239 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from $293 in 2010 to $213 by the end of the Trefis forecast period.

The member estimates imply an upside of 4% to the Trefis price estimate for Research in Motion's stock. In the past, BlackBerry phone pricing has decreased from around $380 in 2004 to $345 in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Research in Motion's stock to BlackBerry Phone Pricing.

Our complete analysis for Research in Motion's stock is here .

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