Tags: RIMM | AAPL | smartphones | cellular

Investors Give BlackBerry Cold Shoulder

By Meghan Sapp   |   Wednesday, 28 Sep 2011 04:09 PM

In what has become an epic marketing battle, the fight for dominance over the hearts and minds of mobile device users has pitted Research in Motion’s (RIMM) Blackberry against Apple’s (AAPL) iPhone. And the fight is getting uglier.

As often happens when two rivals of such mega-cap status take each other on, investors have gotten touchy. Despite cutting 2,000 jobs in July and posting $419 million in profit during its quarterly reporting in mid-September, investors cut nearly a quarter of the stock’s value in pre-opening trading the day RIMM reported. All for missing Thompson Reuters’s EPS estimate by 9 cents.

In fact, just after reporting, a slew of analysts hit the stock hard. UBS raised its price target to $32 from $30 but ISI Group cut its target to $30 from $40. JP Morgan cut to $24 and Citibank to $20.

There seems to be concern about RIMM’s tablet PlayBook, which hasn’t competed very well at all against the iPad, as well as the fact that the new BlackBerry operating system known as QNX won’t come out until next year. Though BlackBerry7 made it to stores just in time for the third quarter reporting, it didn’t have much effect, while the Apple iPhone5 is expected to hit the market in October.

Proof in the pudding

Analysts portray RIMM as over the hill, yet the company still sells well and has a lineup of new products and software coming out in the fall and early 2012, with 200 outlets getting ready to release four new BlackBerry7 devices in just a matter of weeks.

In mid-September, Asiacell released the first nationwide BlackBerry service in Iraq, which means analysts can bet on a whole lot of military and contractors signing up. But where Blackberry is really growing is among kids, who are reaching for the BBM messaging service instead of the pricier iPhone.

Parents will pop for a BlackBerry since it will tie into the messaging service for their own work phones, and kids want what their friends have. So RIM may still have its day in the sun.

Morgan Stanley recently raised its fiscal 2012 EPS estimate by 2 cents to $5.37 per share. RIMM reports third quarter results on Dec. 15.

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In what has become an epic marketing battle, the fight for dominance over the hearts and minds of mobile device users has pitted Research in Motion s (RIMM) Blackberry against Apple s (AAPL) iPhone. And the fight is getting uglier. As often happens when two rivals of such...
RIMM,AAPL,smartphones,cellular
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2011-09-28
 

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