In mobile platforms, all the hype is on Apple (AAPL) and Google's (GOOG) Android. Their market shares are rising quickly in the US. As the CEO of Apple, Steve Jobs, said, “We’ve now passed RIM, and I don’t see them catching up to us in the near future.”
Balsillie, the co-CEO of RIM answered: ”...the implication being that RIM practically invented the smartphone category and is not going anywhere.”
RIM has a different attitude toward web apps than Apple. There may be 300,000 apps for the iPhone and iPad, but according to the RIM CEO, the only app you really need is the browser. “You don’t need an app for the Web,” he says, and that is equally true for the mobile Web. Blackberry is betting heavily on the Web, similar to Google.
-New RIM mobile ads network: good potential.
-New potential of Playbook blackberry tablet; cheaper than the iPad, but 3 to 4 times faster than the iPad. It will launch at the beginning of 2011 and support Flash applications.
-Potential in new emerging markets: RIM smartphones are a better value with Blackberry messenger: free real-time SMS and lower cost of smartphones. In Latin America, and several parts of the globe, the majority of users are prepaid users who can’t benefit from subsidies on the smartphone or from long-term contracts.
-BB mobile usage is increasing, which is not the case with Apple recently.
-Mary Meeker: Smartphones Will Surpass PC Shipments In Two Years.
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-RIM's position on the development of apps. For co-CEO Balsillie, people prefer the mobile web to native apps. This may be true sometimes, but unfortunately, it is not always the case. One big example: YouTube on mobile doesn’t play all your videos. The free app plays videos of the day, but you can’t search what you want in the library. The $2.99 native app lets you play the videos of your choice.
-RIM is losing market share, mainly in the US over Apple and Android.
Even with its global market share shrinking slightly, the stock is cheap, so the short term potential is good. Will RIM be a major brand and mobile platform in 10 years? I’m not so sure in the US for the consumers sector, but it will remain an important player in the business sector. However, the company has competitive advantages in the emerging markets. It offers a good ratio quality/price for these customers.
With a P/E ratio of 12, the stock seems cheap. The global smartphone market is growing quickly.
Apple's P/E ratio is 19.91, less if you consider the $51 billion in cash. It also has the momentum, but the question is, can it maintain its higher valuation in the medium and long term? I remember my economist teacher saying 14 years ago that in the tech sector, you can’t hold many tech stocks for the long term. You have to trade more often. Two stock crashes later, he has a good point.
Apple's mobile ecosystem growth is remarkable (you can see the second graph), but the valuation of the firm is actually taken into account. RIM's valuation has not taken completely into account all of these growth factors.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.