Struggling smartphone manufacturer
Research in Motion Ltd.
) has unveiled a prototype of its much awaited next-generation
Blackberry 10 operating system. The new operating system will be
much more user-friendly and is expected to be loaded with more
applications compared to its legacy smartphones.
Research in Motion is facing severe problems due to an
increasingly competitive landscape, primarily from
) iPhone and from other smartphone manufacturers which run
) Android platform. The primary reason behind Research in Motion's
huge market share loss in the high end smartphone segment is the
lack of applications in its legacy handsets.
Even in the lucrative emerging markets, Research in Motion is
facing pricing pressure from Taiwanese and Chinese handset
manufacturers. We believe the company is betting on its new
Blackberry 10 OS to be a potential game-changer for them.
The new operating system is based on QNX software, which is
compatible with various open-source coding language, and also runs
certain applications from its existing smartphone. The new software
is designed to simplify the task of application and content
The company is working with several application developers like
Endomondo and Gameloft to develop content and applications for its
upcoming smartphone. Research In Motion purchased Swedish user
interface company Cascades in 2010, which develops high resolution
Though Research In Motion is yet to come up with the device, it
is expected to be launched as a touch screen device rather than
it's very own Alpha Dev platform and is seen as a potential
competitor to the iPhone. We believe although the company has tied
up with several application developers and have nearly 70,000
applications, it still lags the iPhone with respect to apps --
iPhone has more than half a million apps.
According to research firm IDC, the company's market share has
slipped to 6.7% from 13.6% a year ago. We believe this is the last
throw of dice for Research In Motion, as another failure could be a
massive blow for them.
We, therefore, maintain our long-term Underperform
recommendation on Research in Motion. Currently, Research in Motion
has a Zacks #4 Rank, implying a Sell rating over the short
APPLE INC (AAPL): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis
RESEARCH IN MOT (RIMM): Free Stock Analysis
To read this article on Zacks.com click here.