This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

RIM's Got Problems but Not as Bad as Nokia's

NEW YORK ( TheStreet) -- The stock sentiment and recent performance for Research In Motion (RIMM)is terrible, with the stock retreating back to where it was in early 2009, and before then, in late 2006. At least the stock is well ahead of its $2 level in 2003.

RIM shares are down primarily because investors believe that the company's products are losing market share, and that the situation is beginning to look like what happened to Nokia (NOK - Get Report) starting four to eight years ago. As a result, the analyst consensus is now materially below the per-share earnings guidance of $7.50, and almost every analyst has downgraded the stock and his price target dramatically.

There's no doubt that RIM is having problems. RIM is several quarters late in introducing its new handsets based on its 7.0 operating system. For every day that passes until the new BlackBerry models become available, RIM is losing sales, all other things equal across all geographies.

Adding insult to injury, RIM's PlayBook tablet has probably not sold well enough to have a meaningfully positive impact on the May quarter's results. The PlayBook was released in April, well before the interesting new software capabilities are made available in the August-September time frame.

Despite these drawbacks, however, the situation at RIM is not as bad as it is at Nokia. Why?

Let's first recap the situation at Nokia.

I'm unaware of a single geography and market segment where Nokia is gaining share or sales. Nokia has close to zero market share in the U.S., and it is losing to every single kind of competitor in Asia, Europe, Africa and the Americas.

In contrast, RIM is losing market share in only a small number of countries, primarily the U.S. In the vast majority of 175 or so countries, RIM is eating Nokia's lunch. If RIM fails to deliver quickly on its new products, this situation won't continue forever. But for now this remains directionally true in RIM's favor.

The BlackBerry is relatively more attractive in many countries outside the U.S. for a few reasons, including the data efficiency, lower service plan cost, and higher optimization for text messages. Again, these advantages will whittle over time, but they don't disappear in a couple of quarters or even a year or two.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AAPL $128.46 0.00%
GOOG $558.40 0.00%
MMI $36.93 0.00%
MSFT $43.85 0.00%
NOK $8.01 0.00%


DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs