BlackBerry losing its momentum

Verizon's new phone triggers concerns about relevance, value for Research in Motion

By Kim Peterson Nov 5, 2009 12:51PM
The new Droid phone, out from Verizon (VZ) and using Google's operating software, could be the strongest threat to the iPhone yet.

But the phone could do more to hurt BlackBerry maker Research in Motion (RIMM), writes Martin Peers of The Wall Street Journal. In fact, he suggests, the BlackBerry is in danger of becoming the AOL of the mobile-device market.

Ooh, he did NOT just throw out the AOL dis, did he? That's a low blow.

The BlackBerry hasn't been able to produce a robust Internet browser, Peers writes. That was fine when it only had Apple's iPhone to contend with.

But now several phones with decent browsers are coming on the market, including the Palm Pre and the new Droid.

And Apple (AAPL) is moving in on RIM's territory quickly. The iPhone has nabbed a 17% share of the global smartphone market, which is awfully close to RIM's 19.5%, according to data from Strategy Analytics.

To give you a sense of how fast that growth has come, consider that in 2008 the iPhone's share was 9.1% while RIM's was 15.6%.

Peers also writes that the percentage of BlackBerry users who say they are very satisfied with their phones dropped 5% to 43% from June to September.

Finally, it's getting more expensive for RIM to make phones. Its gross margin has dropped to 44% from 56% three years ago, Peers writes.

"In the wake of a recent selloff, RIM is trading at 13.9 times consensus 2010 earnings," Peers writes. "That appears cheap relative to stocks like Apple. But given the potential for slow earnings growth, it may be still pricey."



13Comments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

104
104 rated 1
252
252 rated 2
457
457 rated 3
639
639 rated 4
495
495 rated 5
538
538 rated 6
704
704 rated 7
503
503 rated 8
350
350 rated 9
140
140 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
EOGEOG RESOURCES Inc10
TAT&T Inc9
COPCONOCOPHILLIPS9
DVNDEVON ENERGY CORPORATION9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.