Research In Motion PlayBook, Curve Product Updates Set To Boost Shares

Aug.25.11 | About: BlackBerry Ltd. (BBRY)

Research in Motion's (RIMM) release of 3 additional devices marks the completion of the BlackBerry 7 rollout. The device will help the company retain market share in the emerging market and the prepaid market.

In Canada, for example, the Curve is expected to sell in the $300-range. If RIM decides to fight competitors with its gloves off, the company should consider selling at well under $300 no-contract to take market share from Android and iPhone in North America.

How will the Curve Help RIM?

The 800 Mhz, non-touch screen device will run OS7. If positive reviews for the Bold and Torch line-up are of any indication, thrifty consumers will consider the Curve. The 3 devices released by RIM are the Curve 9350 (CDMA), 9360 (GSM), and 9370 (CDMA/GSM dual network support). It is clear that this device will be available at most carriers in September.

PlayBook Launch a Failure, but Commitment Ensures Relevance

RIM also released an OTA (over the air) PlayBook update this week (version “1.0.7.2942”). The device greatly resolves major issues experienced by early adaptors of the tablet device. For example, as a user of the PlayBook (32GB), the device (1) re-links to a BlackBerry via bridge without problems and (2) tethers to the BlackBerry phone via Bluetooth. Previously, the PlayBook required an additional step for Internet tethering.

Although promised for a summer release, it is rumored that native email and Android app support will be released some time in September.

Verdict: RIM proved to consumers and to businesses that the PlayBook is no half-baked device.

RIM Meets 3 out of 7 Catalysts

As discussed previously, RIM needed to meet 7 catalysts to justify a higher share price. With shares trading at $28.58, the company is on track to reach $35 after 3 of the catalysts were met. They are:

(1) Releasing the Android player and native email client for PlayBook on-time this summer

Comments: Scheduled for September release (rumor).

(2) Proving to the consumer that its PlayBook is no half-baked Storm/Storm 2. Prove this by continually improving the PlayBook’s operating system

(3) Ironing out bugs once and for all, notably improving the ease for connecting the BlackBerry to the PlayBook

Comments: Update met.

(4) Determining why its relationship with the developer community is not yielding a growing number of developers

Comments: Not yet met. Rumor of Android on QNX-based phones in 2012 may help.

(5) Hiring a Chief Marketing Officer

Comments: No CMO hired. The success of BlackBerry 7 will need to happen without leadership.

(6) Splitting the CEO and chairman role.

Comments: A review for structure was discussed at AGM. Not resolved.

7) Releasing quality, highly desired apps for the tablet (i.e. Skype), sticking to quality over quantity.

Comments: Popular apps delivered (Facebook, News app), but important ones were not (i.e. an app for Skype and Twitter). On the positive side, RIM released the game 'Dead Space' for the PlayBook recently for $9.99. This game, created by Electronic Arts (ERTS), was a hit on BlackBerry appworld, with the majority of buyers giving a 5-star rating. Look for more EA games to be ported over to the PlayBook.

Conclusion: RIM shares bottomed. An uptick in sales for BlackBerry 7 is expected, especially for the BlackBerry Bold. The unexpected release of Curve for September will further result in stable market share for the entry and mid-level smartphone market. If the remaining catalysts are met, notably management restructuring and stronger marketing, look for shares to rise beyond $35.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.