Research in Motion Ltd.RIMM

Morningstar Rating

Stock Research and Analysis

by Joseph Beaulieu

Research in Motion is a leading provider of smartphones--mobile phones with sophisticated operating systems that support e-mail, Web browsing, and other complex applications. RIM made its name in the North American enterprise market--where its advanced Read more

Bulls Say

RIM is on a roll in the consumer handset market and has more than doubled its share in the past two years while tripling its revenue base.

The firm continues to leverage its leading North American brand to enter fast-growing international markets.

The BlackBerry is still the gold standard in corporate markets, and we expect it to retain that position for years to come. Read more

Bears Say

While RIM's competitors (with the exception of Apple) have been especially weak in recent years, that could change, as we don't think the handset market is conducive to building long-term competitive advantages.

Weak North American consumer spending could put a damper on discretionary spending for high-end wireless devices.

RIM's biggest selling point--its secure, always-on e-mail targeted at corporate users--is overkill for most consumers, in our opinion. We therefore don't believe that RIM's narrow economic moat extends into the consumer market and think it may be difficult for the firm to expand (or even retain) the market share gains it has made with the BlackBerry Pearl and BlackBerry Storm.

A continued push into the consumer market will probably reduce RIM's profitability because of consumers' price-sensitivity and increased competition.

We believe that the wireless carriers are taking steps to attempt to regain the upper hand in their relationships with the handset makers, as they'd prefer to be the center of the customer relationship. We think that Verizon's promotion of the Android-based Droid phone from Motorola is just the first salvo. Read more

Strategy

RIM is leveraging its core strength in the North American enterprise market to expand into international and consumer markets. To accomplish this, RIM is increasing the number of carriers it partners Read more

Management

In 1984, Mike Lazaridis and two other cofounders launched RIM with a General Motors contract in hand and a $15,000 family loan. Today, RIM has grown to become one of Canada's largest and most successful technology companies. Lazaridis continues to head Read more

Profile

Research in Motion designs and markets wireless handsets, software, and services. RIM's primary revenue driver is the sale of handsets to carriers worldwide that promote Read more

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