RIM CEO Firmly Optimistic About Future Growth

Oh, to be a fly on the wall at this year's Mobile World Congress in Barcelona, ground zero for what's next in the cell phone market. It was also a good opportunity for Research In Motion Ltd. (RIMM) co-chief executive officer Jim Balsillie to have a private meeting with investors, hosted by Citigroup Global Market equity analyst Jim Suva.

Although none of us could be lucky to attend that meeting, in a research note to clients Mr. Suva wrote that RIM's Mr. Balsillie remains firmly optimistic of its growth, and sees no slowdown for its business.

And why not worry about about an impending global recession? Well, according to Mr. Suva:

The secular move toward mobile increased productivity & data communication outpaces economic slowdown and international growth for RIM is in its early stages. Less dependence on the financial services today versus five years ago makes for a different scenario as today consumer and international growth is more than offsetting financial services headwinds.

Looking down the road, RIM is poised to release a number of new features, both commercially and through its internal infrastructure, that carriers should be excited about, added Mr Suva.

Mr. Suva maintains a "buy" rating on RIM with a $140 price target.

Comments

[kkin365]

I read in another post, dated today as well, saying that PALM is offering new competition to RIMM. Any comments at the Barcelona exhibition?

[Proud Canadian]

PALM is not a serious competitor anymore. In certain countries, they depend on the RIMM's infrastructure (like NOK).

[Tom B]

The Palm platform used to be really cool; I had a Palm (non-phone) myself at one time. But, with all the mismanagement, they never worked out the bugs. For goodness sake; they never got the basic process of "sync-ing" to a point of reliability! My understanding is that Palm phones rate even lower that Win Mobile in consumer satisfaction, an astounding "achievement"...

RIMM will be taken out by the iPhone, and maybe, the gPhone, if one of those ever ships. But it could be a decnt play for a year or two, if you can live with the high risk.

[Ken B.]

RIMM is a great short. It's ridiculously overvalued, and the competition is only heating up.

[Proud Canadian]

Tacoken,
I would'nt short RIMM...
You say that RIMM is overvalued: What do you think about the valuation of solars stocks ? And many companies among them don't even make money...
A stock like RIMM has a real GROWTH.
and is years ahead the competition. ( Just think about CHINA )
Thomas,
RIMM can not taken out by the iphone or gphone, because the consumer's market is only a sideline for them (33%) and they are not targetting the same consumer. Also there is room for everybody.

[.crazylegs..]

The RIM ceo summed it up in Barcelona when he said he sees no impact on their business from the recent economic slowdown. He basically handed you the opportunity to buy their stock at a huge discount to their growth rate with the quarter being in the bag. You think he would have said that if the quarter wasn't tracking at least on forecast? Of course not.

Anyone who thinks that iPhone or gPhone (whenever an Android device is delivered in 2008 or 2009) will kill the Blackberry is either stupid or simply misunderstands the industry. The smartphone segment of the global cell phone mkt is growing at 30% per year from a 130 million unit base. SO, this means both iPhone and RIM can enjoy large growth going forward as each sells a few million units per quarter. Even if both companies didn't take any market share, they still could grow units at the market rate of 30%, not bad.

Now the real cherry is that RIM in their last conf call said they see only 10% penetration in the BUSINESS market for blackberry. So even if you forget about the consumer, RIM can still grow quickly just selling to businesses. AND the consumer business is doing very well. I see so many consumers using Pearls and Curves and 8700s and 7100s. Get on board with AAPL and RIMM, and dare I say it, even PALM, and you will make some serious money as the smartphone industry demand explodes in the next few years. (and don't bother talking smack about how bad PALM is because once they deliver a better OS, you'll see even them do a little better!)

[Proud Canadian]

J Lazerow,
Nice article Mister, exactly what I think.:)