Markets

Surging Android Could Knock 10% Off RIM's Stock

Google's ( GOOG ) Android mobile operating system is gaining momentum in the enterprise smartphone market against the BlackBerry OS from rival Research in Motion ( RIMM ), according to a recent ChangeWave survey.[1] Based on Android's impressive security and multitasking features, we think it will continue to be a formidable competitor going forward.

That's bad news for RIM investors. We see a potential 10% downside to the $72 Trefis stock price estimate for RIM if its share of the enterprise market continues to decline. Our analysis follows below.

Mobile enterprise forecast

RIM's share of the enterprise smartphone market fell from 76% in November 2008 to 66% in August 2010, according to ChangeWave.[2] Android's enterprise share rose from 10% to 16% during the same period.

On the other hand, RIM's share of the global mobile phone market should reach 3.7% this year, up from 2.7% in 2009. We expect this growth to continue in coming years, reaching 8% by the end of Trefis forecast period. According to Gartner , Android-based handsets accounted for 3.9% of the global mobile phone market last year. Gartner expects Android to power 30% of all mobile phones sold in 2014.

The big risk for RIM is that its declining enterprise share will put pressure on its overall market share. There could be a downside of 10% to our price estimate for RIM if its market share only reaches 7% by 2016, instead of the 8% that we currently forecast. You can drag the trend-line in the chart above to create your own mobile phone share forecast for RIM and see how it impacts the company's stock price.

Android vs. BlackBerry

Android is based on the open-source Linux operating system, which has an excellent record of resisting malware attacks. Android and BlackBerry both offer excellent multitasking capacity compared to Apple's iOS ( AAPL ). However, Android is far ahead of RIM in the app sweepstakes, with about 70,000 apps in its apps store compared to RIM's 10,000.

You can see the complete $72.34 Trefis Price estimate for RIM's stock here.

Notes:

  1. ChangeWave: Android's enterprise presence surges
  2. IntoMobile: ChangeWave report 2008

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

GOOG AAPL

Other Topics

Investing Stocks US Markets