Research in Motion (RIMM): Pure Domination
April 2, 2008 4:09 pm
Research in Motion (RIMM) has been the darling of the working crowd for some time. Nothing has yet to come close to their capabilities with email push-technology. Email has become the mainstay of corporate life along with text messaging and anyone who has used a Blackberry device is fully aware of its addictive nature.
Yet recently, in walks Apple (AAPL) with an announcement that along with the release of their SDK developmment kit, it will be looking to lock horns with RIMM as it will also be offering a form of push-technology in the next release of the iPhone. Microsoft (MSFT) has also been nipping at the heals of RIMM as they would like to produce a device that has all of the features of the Blackberry along with a suite of Microsoft products.
So, where does that leave RIMM? From the looks of the earnings, it does not seem to matter much what these other pesky companies say or do as their infiltration into the handset market is widespread and earnings are here to prove it. After hours today, the stock popped up in response to the good news, confirming that they are still firmly in the driver’s seat.
According to the Marketwire release:
Revenue for the fourth quarter of fiscal 2008 was $1.88 billion, up 102% from $930.4 million in the same quarter of last year. The revenue breakdown for the quarter was approximately 81% for handhelds, 14% for service, 3% for software and 2% for other revenue. Revenue for the fiscal year ended March 1, 2008 was $6.01 billion, up 98% from $3.04 billion last year. RIM shipped 4.4 million smartphones in the fourth quarter and approximately 14 million smartphones
during fiscal 2008.
$6.01 billion, up 98% from $3.04 billion last year. RIM shipped 4.4 million smartphones in the fourth quarter and approximately 14 million smartphones during fiscal 2008. Approximately 2.18 million net new BlackBerry(R) subscriber accounts were added in the quarter. At the end of the quarter, the total BlackBerry subscriber account base was over 14 million.
Longer Term Outlook
The chart for RIMM shows a breakout that occurred just over $112. Even with the recent volatility, the stock has not seen a great deal of downdraft and the next level for a longer term invetment is $132, the level it reached last November. Downside towards $99 is now what will become the next floor if momentum does not continue, but it does seem more realistic that the $115 level will be support if an earnings based breakout cannot hold.
Downside? Until corporate America decides to switch to another service, (which is hard to imagine) Research in Motion should continue to dominate with over a 55% worldwide market share.
A word to Apple and Microsoft: Be careful here.. remember what happened to Palm?
Disclosure: Horowitz & Company clients do not hold position in security mentioned as of the publish date.