RIM Puts iPhone Hype on Mute

A steady stream of new products and smartphone sales growth should help RIM rock earnings.
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Even as expectations around

Apple's

(AAPL) - Get Report

iPhone reach a feverish pitch, BlackBerry maker

Research In Motion

(RIMM)

is more than holding steady.

RIM, which has the dubious distinction of reporting its first-quarter fiscal 2008 results Thursday -- the day before Apple launches the iPhone -- has reason to be confident.

Likely because of major product launches such as its

BlackBerry Curve and World Edition smartphone, and strong sales from its

Pearl device, analysts expect a blowout quarter for the Waterloo, Ontario-based company.

Still, the iPhone specter looms large and could affect the market's reaction to RIM's earnings.

The iPhone has garnered extremely favorable reviews from

The Wall Street Journal

,

The New York Times

and

USA Today

, putting pressure on RIM to create a competitive design.

Investors could sell on the slightest hint of softness in RIM's guidance, says Matt Kelmon, head portfolio manager at Kelmoore Investment Company, which holds shares of RIM.

"The stock is priced for really good numbers and guidance," he says, "so if we see any weakness, yes, it would get hammered. But I don't see that happening."

RIM is expecting revenue of $1.05 billion, according to analysts polled by Thomson Financial, a substantial rise from $613.12 million the same time a year ago. EPS is likely to be $1.06, compared with 68 cents a year before.

To watch Janet Alvarez's video take of this column, click here

.

For the next, or second, quarter, analysts forecast revenue of $1.19 billion and earnings of $1.12 a share. For fiscal 2008, analysts forecast revenue of $4.66 billion, and earnings of $4.82 a share, up from $3.03 billion and $3.33 a share the year before.

No Pain, Just Gain

For all the iPhone hype, RIM investors have yet to feel any pain. Be it a combination of RIM's consistent stream of new products and solid base of business customers who are unlikely to be iPhone buyers, the stock has increased nearly 30% in the year to date, and is up a whopping 148% in a year.

Shares of RIM closed up 0.1% to $163.45 Wednesday.

Despite the iPhone wildcard, the earnings report might not swing the pendulum too much, says Kelmon.

"The stock could be range bound between the high of $177 and where it is right now," he says, "and I expect moderate upside on the price action after the earnings reports."

RIM hasn't let the iPhone distract it. In mid-May, RIM released the BlackBerry 8830, also known as the CDMA/GSM World Edition smartphone, on

Verizon's

(VZ) - Get Report

network.

Two weeks later it unveiled the 8300 BlackBerry Curve phone, available on

AT&T

(T) - Get Report

.

The new products should help boost RIM's numbers, say analysts.

RIM could add 1.14 million subscribers in the quarter, bracketing its guidance of 1.12 million to 1.15 million subscribers, estimates Maynard Um, an analyst with UBS Securities, which makes a market in RIM shares and has had an investment banking relationship with the company.

However, its guidance for the upcoming quarter is likely to be moderate, given management's "typical conservatism" and "unknowable impacts from iPhone launch," Um told clients in a research note.

Eventually, though, the iPhone will give RIM a boost, says Kelmon. "This is not a zero-sum game," he says. "The iPhone will draw people in, and some of them might end up upgrading to RIM."

That could drive RIM shares closer to the $200 mark in the next six to 12 months, he says.

RIM, which has been expeditiously launching new devices, could also add new models or improved versions of its devices to drive growth.

Additionally, there is talk of the Pearl phone, targeted at consumers and launched last year, getting an upgrade; and RIM could add Wi-Fi capability to models such as the Curve to enhance its attractiveness to business users.

Yet, RIM cannot entirely emerge unscathed from the launch of iPhone, says Lawrence Harris, an analyst with Oppenheimer, which makes a market in RIM and Apple shares.

"While the introduction of the iPhone at $500 to $600 may result in greater consumer willingness to consider higher priced devices, we also do not see many prospective Apple buyers selecting the Pearl if brief stock-outs of the iPhone occur," writes Harris in a research note.

Sentiments like this could foreshadow, a knee-jerk reaction to RIM's stock, with some traders choosing to sell it after the earnings. But eventually, says Kelmon, what's good for the iPhone may prove good for RIM.

For a video take on this story with TheStreet.com's Janet Alvarez, please click here.

To see other stocks that might benefit from Apple's big day -- including Marvell Technology (MRVL) - Get Report, Broadcom (BRCM) and Sony (SNE) - Get Report -- please click here for a Stockpickr portfolio.