For the last few days I’ve been reading a lot about RIMM to know where this stock is going. Apparently, this stock is very uncertain. In my opinion, sell now while you either make some money or lose just a bit. The stock is a buy under $50, but only for a short trade. Here are my reasons why RIMM should be avoided (on the long run):
RIMM is already losing market share to the Android phones (MOT, HTC, etc…) and AAPL. These products are actually eating RIMM’s market share in the smartphone area, but not from each other. You can also see that people are losing interest in the blackberry, take a look at this chart, representing the number of visits to the blackberry website:
Notice that the number of visits to the blackberry website is on the downside. People are slowly losing interest in this product. On the other hand, on the Google Keywords website, the search for the term “blackberry” is clearly showing some slight increase over the last few months (December is always an exception when it comes to technology).
The standoff between RIM and some Middle Eastern as well as other very important countries such as India is not a good sign. RIM wasn’t proactive at all in managing these conflicts, instead, they dragged and thought that with time, people will forget. Apparently the UAE called upon RIM to rectify the situation almost 2 years ago, but RIM, with its infinite wisdom, ignored them. The UAE is a heavy weight country in the Middle East, and even ASIA. I have no idea why they didn’t accommodate their needs, instead, they were giving lame excuses such as they don’t have access to the encryption code of the users. I’ve been a programmer since probably the age of 11, and I know that there is no way RIM can’t have access to the users’ information that is stored on their servers. If you want to do business outside, you have to cede to the local laws, whether you like it or not. Google did the same stupid mistake with China, and now they lost the Chinese market to BIDU, a stock that has increased 110% so far this year, while GOOG is down 20% this year. I’m amazed why some companies forget that they’re there to make money for their investors, and not try to enforce their political agendas. Going back to RIM, apparently they finally ceded to Saudi Arabia and said that they will host the servers serving the KSA in the Kingdom. Hmmm…. What does that mean? I guess it means more expenses and less value in the stock. And these are not just one time expenses, RIM has to have employees, has to maintain the KSA servers, etc… I don’t know how much the costs will be, but there will be costs. The same probably will be done for the UAE, and many other MENA countries, not to mention, of course heavyweight telecom markets such as India. I wonder what their overhead in India will be for doing the same thing.
Now after we have examined the politics surrounding the company, let’s examine the product. The blackberry is now ugly, whatever they’ll do to it, it’ll still be ugly. This small keyboard. Ugghhh! It’s also unintuitive, especially for older people. The iphone, on the other hand, is probably the most intuitive and beautiful thing on this earth (and that’s not me talking, that’s probably every tech magazine on the web). The blackberry torch, apparently, is an iphone 4 copycat. RIM who were once innovators and leaders, are now mere followers. Who knows, maybe they’ll become like Microsoft when they first copied Apple, but I doubt it…
There are major risks involved in this company, one of them is the data integrity and security. What if their servers are breached? What will happen to the stock? How will people react? Will they still keep their berries?
Finally take a look at the stock technical analysis here.
Again, I would buy the stock under $50, and sell for the small rebound, but forget RIMM as a long term investment for your kids…