
Of 3 Loathed Tech Stocks, 2 May Be Gems
NEW YORK, (
) -- Investors fell under the spell of a handful of tech darlings this year, but they also grew ambivalent about a few players in the sector.
On a scale from apathy to loathing,
Sprint
(S) - Get Report
engendered a mild hatred from investors with its
shameful three-year streak of losing retail customers
.
Sprint's woeful performance combined with a not-so-bright future, earned Wall Street's wrath. But a pair of tech giants --
(GOOG) - Get Report
and
Research In Motion
(RIMM)
-- which were also tossed aside this year, stand to regain some respect.
Here's why Sprint deserves the loathing and why Google and RIM might work back into the fold next year.
Sprint
:
The No. 3 U.S. wireless shop has lost 5.6 million subscribers in the past three years as rivals
AT&T
(T) - Get Report
with its iPhone, and
Verizon
(VZ) - Get Report
with its Google Droid phones siphon off many of its customers.
Sprint gallantly tried to stand out in a largely two-way race. With the help of its WiMax joint venture partner
Clearwire
(CLWR)
, Sprint launched a so-called 4G network. The company also led the pack with a $100-a-month unlimited voice, texting and data offering.
But the failed
Nextel
merger continued to take its toll. Sprint now says it will shut down the once-popular two-way walkie-talkie service. The company also announced it was joining the long-term evolution, or LTE, 4G movement with a multi-mode approach that would use either WiMax or LTE in some regions.
The stock
: After some highs and lows, Sprint will finish the year largely flat overall. That run may look like a pretty solid performance come next year. Sprint investors will soon have to start factoring in the new expenses related to replacing phones for Nextel customers and the added network expansion costs of using two flavors of wireless technology. Even at $4 and change, there's a lot of room to fall.
:
Google has lost the high growth charms it once had when it traded above $700 three years ago. This year, it will be lucky if the stock breaks out of the red.
New competition in search from
Microsoft's
(MSFT) - Get Report
Bing, the poaching of talent by
and a diverted flow of local advertising dollars to direct marketing outfits like
Groupon
and
LivingSocial
, have given Google fans some reason for concern this year. But Google hasn't exactly been standing still while all this is going on.
Last week the company unveiled the first of its
, the latest in Google's effort to remove Microsoft from the next generation of computing devices. On the smartphone front, Google's Android mobile operating system have been outpacing sales of all other players including
Apple
(AAPL) - Get Report
. Google says it is activating 300,000 Android phones a day, which is up 50% since August.
The stock
: Google shares are down 3% over the past 52 weeks. But the Net search giant has a pipeline of revenue enhancers set to go in the coming months that should help raise the top line. Google is expected to roll out a streaming music service to sell songs, and a streaming video service to rent movies and shows.
These ventures would follow the launch of its Google Editions online bookstore at the start of December and its women's fashion site Google Boutiques this month as well. Barring another financial collapse, it would be hard to imagine Google shares languishing another year.
Research In Motion
:
RIM got clobbered this year as investors saw the rise of Apple, Android and the reintroduction of Microsoft's mobile strategy -- Windows Phone 7 -- as a formidable wall that may be too high to clear.
But what kept RIM from becoming the next
Palm
is that, unlike Palm, RIM has very loyal customers who have what's been called an addiction to their BlackBerry email service. All RIM needed to do in 2010 was introduce a functional touchscreen device that would answer the challenge in smartphones. The Torch, for all its faults, was enough of a winner to keep RIM from winding up as the big loser of 2010.
Looking ahead, hopes run high for RIM as the company prepares a line of phones and tablets like the
PlayBook
that will run on an entirely new QNX operating system. RIM's dogged loyalists and the cat-like nimbleness of its designers and engineers give the BlackBerry shop a good chance of leaving behind the mistakes of the past year.
The stock
: RIM shares are down 9% this year, a lousy run for a company so well suited for the mobile data dance party. The Torch kept RIM in the game, but the company's next generation of devices needs to put RIM back among the leaders.
--Written by Scott Moritz in New York.>To contact this writer, click here: Scott Moritz, or email: scott.moritz@thestreet.com.To follow Scott on Twitter, go to http://twitter.com/MoritzDispatch.>To send a tip, email: tips@thestreet.com.
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