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David Pogue: Blackberry's White Night

|Includes:Apple Inc. (AAPL), BBRY, MSFT, NOK

Yesterday, Blackberry (RIMM) glamorously showcased its two new smartphones the Z10 and globally, with the main event here in New York. Wall Street predictably sold the news driving shares down nearly $2 to close at $13.78. Intraday, RIMM traded as high as $16.60. In pre-market today, they are currently at $12.91. So what happened and where will RIMM go. Two respected tech writers, Walter Mossberg from the Wall Street Journal and David Pogue from The New York Times, reviewed the product. Their findings give a good cross section of the what has been reported in the general media. The controversy over RIMM and the new Blackberry alone is driving more free marketing to the smartphone than anyone could imagine. My advice to RIMM is to get the device in as many money manger's hands as possible, immediately. They are that good. There is so much misinformation being bandied about of what this phone doesn't have, its scary.

My favorite was Pogue's "BlackBerry, Rebuilt, Lives to Fight Another Day" which starts out saying "I'm sorry. I was wrong." To be honest so was I. You see my early articles on RIMM suggested that they really should sell the company. But as I dug further into the blogsphere. I realized that RIMM was really undergoing a revolution. I think Pogue's review really says it best, "BlackBerry is no longer an incompetent mess - and its doom is no longer assured." That represents a big change of heart and I highly recommend reading the article.

Yesterday, I received a Dev Alpha unit from Blackberry. The unit is built for developers and even I can develop apps for it using HTML, even though I am not a true coder. My first impression of this non-commercial unit was: "dam fast".

I think RIMM took a few pages out of Apple'S (NASDAQ:AAPL) revival and want to reveal some interesting parallels. The first is the limited, controlled rollout. Wikipedia's iPhone page states:

"Jobs unveiled the iPhone to the public on January 9, 2007, at the Macworld 2007 convention at the Moscone Center in San Francisco. The two initial models, a 4 GB model priced at US$ 499 and a 8 GB model at US$ 599, went on sale in the United States on June 29, 2007, at 6:00 pm local time, while hundreds of customers lined up outside the stores nationwide."

The first iPhone was only available on AT&T in the United States. There was a six month lag between the showcase and the rollout. I know the timing to get the Z10 and Q10 out in the public hands is important and causing most of the disappointment in the selloff. But its important to show that controlled roll-outs have worked in the past.

The rollout has already commenced in the UK, Blackberry's sweet spot. Carphone Warehouse has it available today. Clearly, the delay for the US market was planned and probably smart cash flow management as well. Why not introduce your new product in the largest and most popular market? Sounds like good planning. If they are putting $500 million of working capital into this, filling the best oiled marketing channels with the product for the quickest payback seems smart to me. Sound to me they are focused on cash and want to continue showing increasing working capital levels on their financial reports. With a management team focused on cash as they are and starting with a structured debt free balance sheet, bankruptcy risk is almost zero on RIMM.

Every review I have read and my personal observation is that the predictive touch keypad on the Z10 is the best ever. My personal observation is the browser is the fastest I have ever used on a smartphone. For those of you who are caught up on lack of apps, get over it because Blackberry did. I address in my previous article here.

Why did Alicia Keys break-up with her iPhone? Money? Maybe. But, she is a great spokesperson for the company. First, she is a mom and mom's will love the Z10. Second, it won't be long for her to show it on the Oprah Winfrey show. Third, she is an artist and building the artist community around this product is clever. Music videos will be shot using the Z10. Then they will be streamed live on the BBN network.

Thorsten Heins is not Steve Jobs. He never said he was. He is a doer, pure and simple. A leader with a European accent. Maybe that is why the stock sold off. Not a good reason in my book. I believe he will continue transitioning RIMM into Blackberry, the wireless connectivity OS company. And that is where the revenue growth and profitability will come. He will outsource manufacturing {like AAPL} and maybe even license the company's new core asset which is the BB10 Operating Software. Many naysayers are saying they can't compete in the commodity smartphone business. Thor agrees, that's why they didn't sell their sole to Microsoft (NASDAQ:MSFT) like Nokia (NYSE:NOK) did when they dumped their plagued SYMBIAN OS. NOK is in the commodity business and their smartphones can't come close to the Z10.

I know I sound like a raging bull. But its time someone on Seeking Alpha sheds some light on what Team Thor has embarked upon. Mobile wireless connectivity is in a hockey stick trajectory globally. And, yes, there is room for at least four players. If you are long RIMM, stay long. If you are short, don't look a gift horse in the mouth.

Disclosure: I am long RIMM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.