The hype cycle about "alternative" phone systems, the idea that Nokia (NOK) might crash the party with Windows Phone or RIM (RIMM) might make a comeback with BlackBerry, has reached a crossroads.
Both companies doubled in value between July and early January, but their performance began diverging around January 10. Since then, Nokia is up only 10% while RIMM is up 58%.
The divergence started with evidence that the Windows Phone market wasn't all that great. Sales of 4.4 million units sounds great, until you realize the size of the market - over 400 million units per quarter. Then it ceases to be a big deal at all.
So what could be better to keep things rocking along than a takeout rumor? This one involves Lenovo (OTCPK:LNVGY), the Chinese company best known for buying IBM's old PC division. Lenovo has tried to get into mobile, with both Android and Windows, but hasn't gotten very far. The idea is that, with BB10 adapted for the Chinese market, the company would have something unique there they could then make popular here, something proprietary.
The official launch of the BB10 is scheduled for January 30, but the hype is keeping the stock buoyant, and it rose 1.5% in trading on January 25. But for how long, and at what point do speculators fold their hands?
You might assume that a Lenovo take-out would be at a premium price, or that Lenovo might just buy part of the company, buoying the price going forward. But I've concluded it's a little like 2010's U.S. Soccer team, which (surprisingly) made it to the second round of the World Cup. British bookies had given the team extremely long odds for winning the thing, and after getting through the group stage offered to pay off betters 4-1 on current bets. Or they could hold.
I think Ghana is coming for RIMM. I don't think they can get past the next round of the hype cycle. But if you disagree, feel free to let it ride.