Research in Motion vs. Apple: Game On

It is game on in the battle for handset supremacy. Is there room for two top dogs? Research in Motion (RIMM-NASDAQ) has been taking dead aim at Apple, Inc. (AAPL-NASDAQ) and their legion of fanboys.

RIM set the stage for this epic battle over a year ago:

Jim Basillie
“Apple has done us an enormous favour by saying you should expect music on your cellphone,” he said. “[But] I think it’s 10 if not 100 times harder to do the communications aspect onto an MP3 player than to do the mass media player onto a communications framework. I think we’ll absolutely nail it before some new entrant comes even close. You know, everyone’s brave in the locker room. Let’s get it done.”

Although RIM is unlikely to update its financial guidance heading into its big shindig Monday in Orlando, FL, the stock has run up igoing into the Wireless Enterprise Symposium (WES), which will be webcast from RIM's website.

Avian Securities has done their homework, and are weighing in on the chances the Blackberry 9000 makes its debut, along with international distribution efforts:

We believe management will also focus attention on key initiatives in the areas of distribution, software, and applications. RIMM continues to drive direct carrier distribution in overseas markets. The company also bolstered its indirect distribution with the recently announced agreement with Brightpoint (CELL). Avian Securities

With regards to software, we believe the company is working diligently to deliver (1) robust HTML support for email and (2) improved web browsing capabilities. We hope to get an update on the progress being made in these key areas. With regards to applications, we expect management to highlight the company’s growing suite of enterprise (recent SAP partnership) and consumer applications. We believe the company’s opening of R&D centers in Dallas and Germany are at least partially intended to attract new software talent for application development.

We hope management will provide an update regarding the network outages that occurred sporadically during the last several quarters and more specifically what measures have been/are being taken to avoid future outages.

Looking at RIMM shares, we would note that in recent years the stock has performed well coming out of the CMD meeting. With the expected introduction of the 3G 9000 device and the recent (pending) launch of the Curve at Verizon (Sprint), sentiment surrounding RIMM shares should be positive. The stock has appreciated 50% off of its February lows and at current levels the shares trade at 34x the F09 (C08) consensus EPS estimate of $3.81. This compares to expected top and bottom-line growth of 69% (per consensus), thus implying a PEG ratio of 0.5x. Looking forward, we would note that the pending introduction of the 3G iPhone in June could cause volatility in RIMM shares.

And what about the Blackbery 9000?

We do expect the company to announce its new, much anticipated 3G enabled device dubbed the Blackberry 9000. Our belief is based on several of our recent checks in addition to a posting this morning on a credible blog site (The BoyGeniusReport). Management is also likely to talk broadly about product roadmap with regards to potential future form-factors and features (touch screen, 3G, etc.)

My favorite Canucks at Crackberry.com, who I turned to when I extolled the Blackberry Pearl, are back with a sneak peek at the 9000.

Will it pack a GIG of onboard memory?:

NOW, I’m going to go out on a limb here and make an educated guess… When the BlackBerry 9000 gets announced on Monday (WES Kick Off!) I am almost certain it will be packing a GIG of onboard memory. The 9000 I bought off eBay might not have that, but with such a focus being placed on Docs / Games / Downloads / Media on the 9000, I cannot for the life of me believe RIM would release it with anything less than that. Unless they ship each device with a microSD card (which I can’t see them doing), there’s just too much going on here to sell the device without ample onboard storage space. I hope I’m right. And I guess we’ll find out soon. Crackberry.com

Their video of the 9000 is racking up views on youtube, just be careful about chasing the stock going into the meetings. I am beginning to have valuation jitters over the stock, although as Avian notes it continues to trade at a discount to its growth rate.

Scarier still are the Apple fanboys who pledge undying allegiance to the iPhone and Apple. Of course, if you size the market there is probably room for the two to co-exist, but some people seem bent on world domination.

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Avian Securities
Homepage

BlackBerry 9000 Review - eBay Purchased Device Emerges!!
Crackberry.com

BlackBerry 9000 Smartphone Review - New Eye Candy!
Crackberry.com

Game On
1440 Wall Street

iPhone vs. BlackBerry: Round 2
Changewave Research
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No position.

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