Upside to RIM From Higher BlackBerry Share and Bigger Mobile Market

Jul.21.10 | About: BlackBerry Ltd. (BBRY)

Trefis members have created forecasts for two key drivers of Research in Motion’s (RIMM) stock over the last week: (1) BlackBerry Mobile Phone Market Share and (2) Global Mobile Phones Sold. Their forecasts suggest that BlackBerry Mobile Phone Market Share will slightly hire than the Trefis forecast over the next few years and that Global Mobile Phones Sold will also be slightly higher than the Trefis forecast. These projections suggest a combined upside of nearly 9-10% for RIM’s stock.

BlackBerry Mobile Phones is the most valuable division for RIM, constituting around 48% of the $72 Trefis price estimate for RIM’s stock. We expect global mobile phones sales would rise from about 1.2 billion in 2009 to 1.8 billion in 2016. This expected increase in mobile phones sales should bode well for RIM as well as its competitors Apple (NASDAQ:AAPL), Motorola (MOT) and Nokia (NYSE:NOK).

Research in Motion’s stock is quite sensitive to (1) BlackBerry Mobile Phone Market Share and (2) Global Mobile Phones Sold. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

1. BlackBerry Mobile Phone Market Share

The average of forecasts for BlackBerry Mobile Phone Market Share created by Trefis members indicated a projected increase from 3.4% in 2010 to 7.8% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 3.4% in 2010 to 8% by the end of the Trefis forecast period. The member estimates are slightly hire than the Trefis forecast over the next few years, but lower towards the end of the forecast period. The member estimates imply an upside of 5% to the Trefis price estimate for Research in Motion’s stock. In the past, BlackBerry Mobile Phone Market Share has increased from 0.3% in 2004 to 2.7% in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Research in Motion’s stock to BlackBerry Mobile Phone Market Share.

Our complete analysis for BlackBerry Mobile Phone Market Share is here.

2. Global Mobile Phones Sold

The average of forecasts for Global Mobile Phones Sold created by Trefis members indicated a projected increase from 1.3 billion in 2010 to 1.9 billion by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 1.3 billion in 2010 to 1.8 billion by the end of the Trefis forecast period. The member estimates imply an upside of 5% to the Trefis price estimate for Research in Motion’s stock. In the past, Global Mobile Phones Sold has increased from about 620 million in 2003 to 1.2 billion in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Research in Motion’s stock to Global Mobile Phones Sold.

Disclosure: No positions