NEW YORK ( TheStreet) -- We are only a few games out of the spring season training and already some are calling who is going to win the world series of smartphones. Stories abound how Research In Motion ( RIMM) should all but be written off by users and investors alike.Some pundits have already declared Apple ( APPL) the winner, with possibly Google ( GOOG) becoming a spoiler if only to keep things entertaining. Even Microsoft ( MSFT), arguably the most powerful software company in the world has been declared by some to be unfit to take the field.
Sprint, AT&T, and Verizon may steer customers walking in off the street toward the iPhone, however, extrapolating the end of RIM as an investment due to the Apple focus by the major carriers is a mistake.
Secondly, RIM is more than a hardware manufacturer. The company has key government and corporate contracts that are not easily displaced. At some point, based on Moore's Law and the history of computers, hardware will become a commodity item anyway. RIM offers profitable services beyond the hardware sales. This makes RIM different and more valuable compared to Palm. Third, even if RIM loses half its current market share in North America, it would only lower revenue by about 12%. RIM receives 70% (and likely higher by the next quarterly report) outside of North America. Fourth, as grim as things are, and we can all likely agree the situation is not satisfactory, the news is fully priced into the stock. Yes, RIM is horrible and your neighbor just upgraded from a BlackBerry to an iPhone 4S, but the share price reflects how negative sentiment has become. RIM is likely worth north of $7 billion on the chopping block. With 515 million shares and rounding down it's difficult to come up with a number under $12.50. Simply using cash and other assets provides a natural floor for the stock price. Fifth and most influential for me are the technical indicators on the chart. Based on my technical analysis, RIM is near oversold.