RIM's Problem: The Company Isn't Apple

6/26 - "RBC Capital notes that on product momentum (Curve, Bold) offsetting seasonality, Q2 guidance for $2.55-2.65B (86-93% Y/Y) was $100-150M above street...RIM expects its 'strongest back half in history', affirming firm's expectations for a broad consumer assault 2H08, including new handsets (Touchscreen, Flip, Slider, 3G Pearl, others). Notes historically (e.g. 2005, 2007) RIM made similar investments to address larger opportunities, which subsequently paid off handsomely for investors.

If management executes its strategy successfully and expands its addressable market, they expect rising investor sentiment as investors look past interim margin pressure and recalibrate around RIM's full market opportunity. Maintains Outperform & $165 tgt."

"Goldman Sachs is lowering their FY09/10/11 EPS estimates to $3.62/$5.11/$5.86 from
$3.85/$5.29/$5.95, and 12-month price target to $156 from $163, but maintain a Buy rating on the stock. While the firm is comfortable adding to positions with the guide-down out of the way (consistent with preview), they prefer to wait before becoming more aggressive until they gain comfort that 1) market expectations are more realistic, and 2) the company is executing well toward its August-September product launches."

6/29 - "The second half of fiscal 2009 and 2010 will be a strong period for Research In Motion Ltd. (RIMM) with an array of product launches accompanied by a big marketing push, according to Scotia Capital’s Gus Papageorgiou. He has an “outperform” rating on RIM and price targets of C$214 and C$246 per share for the next 12 and 24 months, respectively. The analyst also believes the Street’s expectations for fiscal 2010 are too low."

"He added that his estimates assume RIM has 15% of the global (smartphone) market by next year, up from 13.4% in the first quarter. The Street’s estimates imply just 11%, which is “unrealistic in the face of several new device launches and strong commitments from some of the largest carriers in the world (Verizon and Vodafone), in the fastest growing regions (North America and Western Europe) of the Smartphone market, the analyst added.

Despite the competition, Mr. Papageorgiou said launches from Apple (AAPL) and Nokia (NOK) have failed to slow RIM’s unstoppable force."

6/27 - "RIMM's dream run is beginning to look like a thing of the past. Its shares are up a whopping 70% over the past 5 months, and 33% since its last quarterly report. In a choppy market, investors were paying too much premium for a company that depends on just one basic product, albeit in different versions."

"The 3G iPhone will support corporate email, which has been the Blackberry's USP and the only major reason why executives and managers have been devoted to Blackberry. Also, the number of applications being developed for the iPhone will generate a huge interest among younger consumers to go for the "cool" factor which is missing in the Blackberry. And the iPhone sells at $199, which puts enormous pressure on RIMM to slash rates on the Blackberry Bold (its next model) to a competitive level."

"The bottom line is that it's time to sell RIMM. The company has had its run, as long as it had no competition. With Apple entering the phone space, RIMM will suffer the most. I think a Forward P/E of 23 is too much for RIMM right now. I expect the market to punish this stock, and return it to the $100 levels within the next 4 weeks. That is when you should look at buying. "