BlackBerry Pearl: The New iPod?

Merrill Lynch’s Vivek Arya loves the Research In Motion (RIMM) Pearl. I mean, he’s ga-ga. In a note Monday, Arya said the Pearl is “a unique combination of design and functionality and can be a game changer like Apple’s (AAPL) iPod and Motorola’s (MOT) RAZR, in our view…[the Pearl] platform extends RIM’s earnings momentum till at least 2008, warranting a longer term view on the stock.” With the Pearl, he writes, the company has extended its reach from the enterprise market to the “4x larger consumer space.”

Ergo, Arya on Monday raised his price target on the stock to $135 from $110. That’s the first time’s he raised his price target on the stock in, uh, 10 days.

Arya says that according to T-Mobile, “Pearl sales are well ahead of all internal forecasts.” He notes that the phone will launch with Cingular in November and Verizon in 2007; he also expects a version with a full QWERTY keyboard in 2007.

Arya estimates that the company generates profits of 29 cents a share for every 1 millon Pearls it can sell. “We believe the Pearl will be a platform, not just a device, much like Apple’s iPod and Motorola’s RAZR,” he says.

Aside from whatever you might think about Arya’s confidence in the stock, I find his belief in the equation iPod=RAZR=Pearl to be kind of hard to swallow. For a product that just started selling, that seems like an enormous leap of faith.

Comments

[Tom B:]

Probably better than the Zune, but still a non-starter.

2006 Oct 10 08:41 AM