Research in Motion sets BB10 launch date
Jan. 30 will determine the struggling smartphone company's future.
By Brad Moon
Research In Motion (RIMM) has finally given a firm date for the launch of its new BlackBerry-10 operating system and the first two smartphones that will run it: Jan. 30, 2013. The day may well go down as the most important in the company's history.
RIMM stock spiked nearly 10% on the news Monday, although it closed just 3% higher at $8.81. Such a reaction continues the roller coaster investors have been on over the past few months.
1) A service disruption knocked out BlackBerry service to some European and African customers on Sept. 21 and RIMM shed 15%, offsetting the boost it had received a few days earlier after signing a licensing deal with Microsoft (MSFT). The stock hit a five-year low of $6.30. (Microsoft owns and publishes Top Stocks, an MSN Money site.)
2) RIMM posted a 31% gain in the late September quarter after CEO Thorsten Heinz announced an increase in the company's user base and committed to new phones sometime in January -- and as second quarter financials came in better than expected.
3) When the company announced BB10 phones were in testing with 50 carriers at the end of October, its stock surged 9%.
4) Only last week, shares dropped 8% after an analyst with Pacific Crest said, "We believe BB10 is likely to be DOA."
Since then, the company has been hard at work trying to steady the ship. RIMM's CEO, for one, has become increasingly visible and combative as he fights to dispel the perception that his company is on the ropes.
When The New York Times published an article titled "The BlackBerry as Black Sheep" -- which included people expressing their embarrassment about still using an "uncool" BlackBerry in a world of iPhones and smartphones running Google's (GOOG) Android -- Heinz responded with a letter to the editor criticizing the piece.
The company has also gained ground on competing mobile platforms. Just on Friday RIM announced the BlackBerry Got Game Port-a-Thon. The company is offering developers $100 per app to port their games to the BlackBerry App World prior to BB10's launch. They're sweetening the deal with free BlackBerry PlayBook tablets and trips to a BlackBerry developer conference.
This is a clear move to catch up with Apple (AAPL) and Google -- each of which have well over 100,000 games in their app stores. While it's doubtful that the big selling games from the likes of Electronic Arts (EA) are going to make a sudden BlackBerry appearance based on a $100 bounty and a free tablet that no one seems to want, the strategy may help the company on the PR front. By boosting the sheer number of games available, the system's shortcoming will be less obvious -- at least numerically.
It's also interesting to note that this effort is clearly aimed at making the new BlackBerry devices more appealing to consumers, who have been abandoning RIM in the greatest numbers. The core business and government groups aren't being ignored, though. News is that the BB10 platform has been awarded FIPS 140-2 certification (a U.S. government security clearance) -- the first time RIMM has had BlackBerry products certified prior to launch. This should speed adoption of the new devices once they're available -- a critical step to ensuring a sales boost in the first quarter.
It goes without saying that Research in Motion has a lot riding on BB10 and its new phones. The company's market share has dipped so much that the company dropped out of the top five global smartphone makers altogether. No amount of gains in Africa, government acceptance or diehard fan upgrades will save the company from irrelevance if the new phones and operating system are not a resounding success.
With that in mind, the big questions facing RIM investors come the end of January are:
- When are the phones actually going to be available for sale? Specifically, when will the version with a physical keyboard -- the device hardcore users are waiting for -- be available?
- How will media reviews on the new devices and OS be? Positive stories may spur fence-sitters to try something new or attract users who aren't thrilled by iOS, Android or Windows Phone 8.
- How will the consumer reaction and initial sales numbers come in? Will consumers overlook the Apple and Android app advantage and buy the new BB10 smartphones, or will they shrug?
The answers to these questions will largely determine whether RIMM spikes again in February or dives to new lows.
For now, be sure to mark Jan. 30 on your calendar.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
More from InvestorPlace
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.
The solid report comes a month after the retailer closed all of its Canadian operations.
VIDEO ON MSN MONEY
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.