Markets

RIMM Tablets to Offer "Angry Birds" - Analyst Blog

BlackBerry-maker Research In Motion Ltd. ,( RIMM ) recently announced that it will finally include the most popular mobile game in recent times, Angry Birds, in its PlayBook tablets. The massively popular game from Rovio, a mobile game development company, reported more than 500 million downloads on mobile handsets and tablets.

BlackBerry devices are mainly targeted toward business class consumers but looking at the stiff competition from other smartphone manufacturers, the company will start offering popular games like Angry Birds in order to target the other category of customers. Earlier, BlackBerry devices did not support such games but with the launch of new QNX-based devices, such games will now be available on them.

Presently, three versions of Angry Birds will be available on the BlackBerry App World website costing $4.99 for each download compared to Apple and Android device users where the limited version of the game is available free of cost.

In order to retain its market share as well as counter competition, Research In Motion launched its much-hyped QNX-based PlayBook tablets in April, this year. In the first quarter of its release, the company shipped around 500,000 tablets.

However, PlayBook tablets considerably lag its competitors in terms of the number of applications supported. PlayBook tablets support a mere 3,000 applications compared to any Android-based tablets and Apple Inc 's. ( AAPL ) iPad that support 250,000 and 350,000 applications, respectively. Furthermore, PlayBook tablets are not always capable of running applications developed for BlackBerry smartphones. The tablet users can only sync their data, contacts as well as emails in the tablet through an application called BlackBerry Bridge.

Such drawbacks resulted in tepid response for the product in the market and led to increased inventory backlog for the company. In the very next quarter of its launch, shipment dropped to around 200,000 tablets, while in third quarter 2012, the company reported a poor 150,000 tablet sales.

So in order to clear its inventory backlog as well as to retain market share, the company is implementing different strategies such as integrating popular games like Angry Birds, reducing the tablet prices from $499 to $200 as well as selling the low-version tablets with an option of upgrading it to the newer version of OS 2.0 which is slated to release in the first half of calender 2012.

Recently, Research In Motion declared its third quarter 2012 financial results. Despite beating the Zacks Consensus Estimate, the company provided grim outlook for the upcoming quarters.

We believe that reduced tablet prices, grim outlook and stiff competition from other tablets and newly released iPhone 4S, which has already garnered huge demand during this holiday season, will act as headwinds for the stock going forward.

However, strong subscriber growth and increased smartphone sales arising from the launch of new BlackBerry 7 smartphones will act as catalysts for growth in the near term.

We, thus, maintain our long-term Neutral recommendation on Research In Motion Ltd. Currently, Research In Motion Ltd has a Zacks #4 Rank, implying a short-term Sell rating.

APPLE INC ( AAPL ): Free Stock Analysis Report

RESEARCH IN MOT ( RIMM ): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

AAPL

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More