As of Mar 21, we maintain our Neutral recommendation on
Research in Motion Limited
), ahead of its fourth quarter 2013 financial results.
Why Still Neutral?
Research In Motion has launched its much awaited BB10 OS-based
Z10 and Q10 touch screen smartphones. The company has also
generated a whopping order of 1 million handsets from one of its
established carrier partners.
The new mobile device supports 70,000 apps and is based on a
new user-friendly platform called QNX software or BB10 operating
system, thereby offering strong resistance against the popular
iOS and Android operating system.
Moreover, Research In Motion with its dedicated subscriber
base of approximately 79 million coupled with strong cash
position and a debt-free balance sheet will tend to act as
tailwinds for the company going forward.
On the downside, we remain concerned about the company's
recent decision to change the business model of its high-margin
services fees segment As per the new structure, the company will
benefit from subscribers who opt for services like greater
security while the other customers will generate little or no
service revenue for the company.
Furthermore, BBRY is facing stiff competition from the other
low-cost smartphone manufacturers, which we believe will continue
to hurt profitability going forward.
Currently, Research in Motion has a Zacks Rank #3 (Hold).
Other Stocks Outlook in Related Industries
Other stocks in the telecom industry include
). All 3 stocks currently have a Zacks Rank #3 (Hold).
Research In Motion announced that effective January 30, 2013,
the company would operate around the world under the name
BlackBerry. From February 4, 2013, the company's ticker symbol
for trading has been changed from "RIMM" to "BBRY" on NASDAQ.
The legal name of the company has not changed, for which the
approval of the official change by shareholders will be sought at
the company's Annual General Meeting later in 2013. During the
time, the company will do business as BlackBerry.
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