Blackberry Thunder / Blackberry Bold on the Verge of Release — How will they affect RIMM?

July 24, 2008

First things first… are you guys as excited and anxious about the new Crackberries as I am? I sure hope so! However, don’t get your hopes up of owning one just yet, as RIM has pushed back the release dates on both devices due to minor technical issues and bugs they need to resolve. Research In Motion might be starting a huge marketing push for the Thunder (dubbed the iPhone Killer) come September with an official launch around mid-October. On the other hand, the Bold or 9000 will be released for AT&T around July ($300 USD), with Sprint, Verizon, and T-Mobile to follow in September along with a matching price tag.

Now… all my ramblings aside, lets talk stock market RIMM.

RBC Capital Markets analyst Mike Abramsky sees plenty of catalysts for Research In Motion Inc. (RIMM) even in uncertain markets, including an exploding smartphone market, new product launches, and resilience against Apple Inc.’s (AAPL) iPhone.

The analyst gave RIM an outperform rating and a C$165 price target, a 43% upside on current stock price.

Now, generally I’m not one to follow analysts’ hypes, however lets get realistic here. We are afterall talking about The King of Business Smartphones. Alot of people have been comparing the iPhone to the Blackberry, yet there are differences in the perception of the consumers. Many surveys have concluded that the corporate gathering find the Blackberry as a more trendier and subtle gadget to fit their needs, while a younger more media-oriented generation have dedicated themselves to the iPhone. Now, don’t get me wrong, I am in no way bashing the iPhone. I think it is a wonderful device, but as far as stock market price potential for growth goes — Blackberry wins the battle without a doubt.

Moreover, I was highly dissapointed when they released the new iPhone. I mean, all they added was a 3G capability and a few other minor adjustments — nothing big, except the price tag! Looking at the Thunder and Bold they are completely innovative and offer a brand new look and style versus its predecessors.

Mr. Abramsky even sees a potential upside to this competition, to expand the overall Smartphone sector. He wrote:

We expect RIM to benefit globally from the iPhone launch, similar to the impact of the iPhone in North America (we estimate Blackberry unit sales through AT&T (T) rose 100% above pre-iPhone levels).

Another Research Capital Analyst, Mr. Agostino is also bullish on the stock with a C$175 price target, close to the Bloomberg consensus of C$171 (22 buys, 6 holds and 3 sells).

Both analysts pointed out that RIM also enjoyed a wide channel leverage (over 350 agreements worldwide) and a stellar management team underpinning flawless campaigns execution.

Mr. Agostino said:

The euphoria around the launch of the iPhone is now over, and the limelight is now going to switch back to RIM in the coming weeks.

Now lets quickly analize the current Price vs. RSI vs. Volume Chart of RIMM:

As you can see, I would expect to buy in around $110-112 as it is currently on a downward trend most likely up until Friday’s close, with Monday kicking off another increase in the price level. Expect this stock to follow up with another brilliant Quarterly Earnings report for their 2nd quarter results which are due on Sept. 25 2008. This is a great investment both in the short-term (during the quarterly earnings crunch) as well as long-term (brilliant management + research & development departments).

I know my next phone will be a Thunder, do you own a Blackberry or plan to buy one?

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