RIMM Pre Announcement and Smartphones
January 18, 2011: a cold, rainy, crappy night in NYC. I am there to meet a hedge fund manager for a job interview, but he wants me to meet with another manager too so it is a dual interview. During the interview, the second HFM asks me what is my recommendation regarding RIMM. He is long a lot of RIMM. My response was to sell the RIMM, but if he wanted to keep it then he should short NOK ahead of their investor day as a hedge. He gives me a strange look and asks why he should sell the RIMM. I tell him that RIMM and NOK are in negative product cycles that will not end well. I have no idea what he did with the positions since he has not responded to any emails since the interview, but I do know what the stocks have done:
RIMM is down 20% since January 18 (yes it has been up and down, but should open up another 900-1200bps down in the morning).
NOK is down 23% since January 18.
If you think I am grandstanding…well…yes I am, but look at my April 15 post on GOOG. Have a nice night.
Side note…a friend emailed me this during the RIMM conference call “Even the EMs starting to soften. They [are] citing LATAM. GFK has been noting EMEA flattening fast; could roll soon. If the INT growth story is cooked, what is there………? I maintain US has gone negative net adds. Permanently. VZ was the still the largest installed base. Can’t tell me they stopped sub disclosure numbers for any other reason.”
RIM always has a great story for how they’ll fix things, but it’s always something that will be done in the future. Switching from the legacy OS to QNX is a great direction, but we’ve been told BBOS5 and then BBOS6 would be the second coming.
Early tests of the webkit browser were fantastic, but by the time it was released it was behind the curve again as both Android and iPhone OS (sorry, IOS will always be a Cisco product to me) had major revamps.
Supporting Android apps is a great short term consumer win, but will drive their few devs towards Android and I can’t see BBs having the horsepower to run the apps well when Android phones are 1GHz dualcore with GPU acceleration these days.
Adding Android/iPhone support to BB Server is an interesting direction, but isn’t it just admitting defeat and retreating to an Exchange server add-on/services company?
I can’t see anything BB does, short of switching to Android OS (or even WP7!), revamping their hardware design, and offering significantly enhanced security improvements over AOSP, that would make be buy stock.
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