User 207572

RIMM Sinks, I’m Holding On

I played with iPhoen and blackberry for a month. The I dumped all my RIMM shares. It is not because RIMM is not strong short term. The problem is that RIMM's model does not work any more. I don't know whether you know technology or not. I know investment and technology well. I actually invested in RIMM since it went public. I made lits of money by holding RIMM and AAPL last year too.

When I invested in RIMM since IPO, all pros were against me. They short RIMM heavily. Now they are all for RIMM. So strange because I thought the pros should know better. Sadly, they don't know a thing.

Here is the theory. I know you don't think I am right. But I tried:

When RIMM was young, people didn't think a email pager is a big deal. I knew it was big because people want "in writing anywhere". It is important for corporate world politics. Voicemail is not good enough. So, even RIMMs' device didn't have cell phone function. People still needed it, not to mention email and voice two-in-one. There were lots can be said why PALM, MSFT failed. But that's not the key point.

Why RIMM is doomed now? 1) It doesn't have iTune function - people want iPod and Cellphone in one. 2) Even it has iTune, it is not iPod. 3) It's OS cannot attract 3rd party software developers. RIMM tried this almost since the beginning. 3) Blackberry focused on technical features and security. It is not enough now. People want usability and style. 4) If APPL is fashion designer, RIMM is a tailor. They both make things for people to wear.

So, RIMM will first see its consumer market share stop growing, then shrink. This will kill its P/E ratio. It will take several years to see what will happen to its corporate world market share. I bet, eventually, it will be phased out or stayed as an old corporate email too. You know each company has lots of those old stuff. You don't need to see RIMM die. All you need is a slow growth story - then RIMM share will be around 40 - 50 dollars.

I doens't matter how RIMM's share perform short term. Don't look at the sales numbers short term. You have to see deeper than this to be a good investor.


Well, I tried. It's your money.