The stock market and the audience at BlackBerry World will ultimately converge

BBWC Industry Analyst
By Chris Umiastowski on 1 May 2012 12:00 pm
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The BlackBerry World 2012 keynote session is now over. If you followed our live blog you already know that we were pretty excited by the innovation that RIM unveiled -- BlackBerry 10.

The user interface was stunning. The on-screen keyboard rocked, with its unique way of presenting word suggestions and using swipe gestures. And that camera app, which functions like a little frame-by-frame time machine ... fantastic stuff. I hope RIM has patented all of these innovations.

So why is RIM stock down? It's down about 3% while the broader NASDAQ is up slightly today. On the live blog I said I'd be shocked if RIM didn't trade up today. I seem to have a knack for being wrong about how the market will react to news.

The stock market is a funny beast. People scream for innovation out of RIM. Yet when RIM delivers smashingly innovative stuff, they yawn and find something else to complain about.

We've got to keep in mind that RIM hasn't actually delivered any of this in a commercial device yet, and the timing is uncertain. So the market has a right to remain skeptical. But at the same time, the audience inside of the keynote session at the Orlando World Center Marriott was pumped. Applauses interrupted Thorstein's portion of the keynote more than I can ever recall in a RIM CEO presentation (or really any RIM presentation).

So there's a disconnect between the audience (who are developers and enthusiasts), and the market. And disconnects like this don't live forever. They can't. Either the company fails to execute on getting this great stuff out the door, and the audience is let down, or RIM actually hits its mark.

I actually feel proud to be a RIM shareholder again. I was actually convinced that I might enjoy switching to a touch screen keyboard. I'm loving BlackBerry 10. But the market obviously remains highly skeptical.

So we wait. The launch of BlackBerry 10 is "make it or break it" for RIM. I think they'll make it.

Stay tuned for a follow up where I'll post my thoughts on RIM's messaging and overall keynote session.

Follow all of our BlackBerry World 2012 coverage

38 comments

sk8er_tor

Of course the market is skeptical of RIM because they're so far up Apple's ass.

supraking

Analysts are Apple fanboys. They compare everything to Apple, and exclaim that any company that isn't valued at hundreds of billions of dollars is "going to die." Why can't a company just sit comfortably bringing in a few billion a year in profit? Just because we have an oligarchic marketplace dominated by a couple of companies doesn't mean there's no room for any other companies to exist.

Why is it always "how will you compete with Apple?" Maybe they don't want or need to compete with Apple. Continuous growth is impossible, no matter what the company. It should not be an expectation of shareholders.

Last point: RIM is doing a lot of things wrong. They're reducing switching costs (Mobile Fusion - wtf?) and they're ignoring CURRENT customers by focusing solely on BB10. However, they have some really innovative stuff coming, and they're going to be just fine. Maybe not $500 billion market cap fine, but fine nonetheless.

Unless they don't have any BB10 devices with a dedicated keyboard. Then they're toast.

cordial666

Traders had positioned for an announcement around strategic partnerships and or content deals (from amazon perhaps). Without that the stock dropped sharply. There is very little faith at wall st that BB10 will make any difference to RIM in the long term and a considerable number of analysts want it binned altogether as it will be a cash burn (which I'm sure we all agree is just wrong).

all imho of course.

Blackberry_boffin

Yeah I agree they were looking at some form of partnership and/or licencing.
Even though BB10 looks slick the Alpha is too skimmed and remains a developer device without a clearcut full device launch. The tentative launch dates are not even in this quarter so there is a lot to be nervous about from an investor's point of view. That added to the usual attitude torwards RIM.

Navidb

My take is that the stock market was hoping for a big partnership announcement from the likes of Microsoft, Amazon, and Facebook. They are disappointed that they did not get that.

RIM still needs to fill the content gap. That will hopefully happen if enough people get excited about BB10.

Kiddo2050

I agree, this is that I was thinking. Although I'm very happy with what was shown and plan to get a BB10 device, they didn't show a RIM eco-system.

cordial666

Disappointment that was amplified from what happened to the BKS stock after the MSFT deal.

ekafara

i agree with what you said about switching to a touch screen. I was unsure before but now i am almost certain i will be switching to a full touchscreen phone.

mithrazor

I'm glad for this this article. I was wondering why it was down.

I think the investors thought there would be a BB10 device that's going to be announced here. So I guess that's why, it's now down 4 percent. We'll see where it goes after this.

WinningWithLogic

There was very little on display that was all that interesting at the keynote. Seriously, a couple of screenshots that look a lot like they were heavily windows phone inspired and you're all gaga over it. And if you actually go to the Cascades developer site and look at the code samples, they're the most minimal/basic functionality you have ever seen - pull my beard, extremely basic UI components, etc. Basically, once again, you're all being sold a dream.

The disconnect here is between the fan boys and the real world.

xandermac

Getting some decent big name developers on board early might have helped. Without those RIM will remain an "also ran".

cgk

There was very little here to get anyone outside the faithful very worked up - a keyboard app and a camera app and a very very limited demonstration of capabilities. I kept having flashbacks to when WebOS was launched, not because the OS is particularly similar but because the same sorts of statement were made.

WillieLee

There was also a segment who bought RIM expecting a sale and BB10 shows they have no intention of selling off the company.

What seems to be discounted is the licensing potential for this platform.

cgk

"What seems to be discounted is the licensing potential for this platform."

What licensing potential? Currently in the mobile sector, two companies make 100% of the profit and 70%+ plus of the revenue - everyone else is hurting, who currently has many billions to throw down a bucket called "BB10 licensing"?

br14

Apple iPhones cost the carriers over $300 per device in subsidies and rumour has it Apple wants to buy wireless spectrum and become a carrier in its own right.

If Verizon/AT&T etc get an equivalent device they can sell at a reasonable price they won't sell iPhones.

Google is waiting for the results of the jury in its case with Oracle. If Google loses, as is very possible, the price of Android devices will increase, and carriers will lose margin.

And they'll be looking for a device to replace the capacity.

The smartphone wars have only just started, and the market isn't even 50% saturated. There's everything for RIM to play for.

world traveler and former ceo

+1000 well said ....

RIM has a game changer with bb10 .. when it finally gets to the market ...

but investors were hoping to hear about a strategic high profile investor / partner, like Facebook .. etc .. and no announcement (so Far) ... had all the bears pouncing on the stock .. plus all those with vested interests (apple investors) in seeing weaker competition .....

MarcBernard

Perhaps the market is reading BGR instead...

br14

I hear they were going to change the name to "Apple Genius Report", but they couldn't find one.

morganplus8

Are you kidding me, there is a complete disconnect between the market and the presentation. The stock dropped from the out set on huge volume long before Heins even opened his mouth. How can you claim the stock market reacted to the presentation when it hits the lows while he was walking out on to the stage? Give your heads a shake, this was planned from the beginning, the stock was to be sold into the meeting so that the media would take their que.

Now all you read is that "investors saw nothing in the presentation" and then decided to sell in disappointment. Like we haven't seen this setup before. As long as the stock is manipulated, you won't be able to tie stock performance and news together in the same breath. Heins could have announced a takeover at $ 60 and the stock would have dropped. LOL

Oldpeddler

Right on. The RIM short cartel is running the show.

Bolderholder

Dont fret about the disconnect. Happens frequently without logic or sense.

Market darling right now is Apple.

Anything not Apple needs to basically walk on water to have any traction. Still too early for people to see anything new or better with RIM. Right now market sentiment is quite negative and very skeptical. If it doesn't make shareholders money, they don't like it. Simple as that.

LoganSix

Also, due to Apple's share price, it actually alters the entire NASDAQ.

CanisMinor

It's pretty clear why the stock is down:
1) The Alpha release doesn't even have native calendar, email or wifi - that makes it very obvious how extremely far away from production BB10 is.
2) There are no major app announcements. The stock market was hoping RIM would at least announce ONE major must-have developer on board, e.g., Skype, Netflix, Hulu, Amazon or similar. The silence from major content owners is damning.

When you look past the gloss, this is a disaster emerging.

Petroucho

couldn't agree more. Epic fail by Waterloo losers. Made me money.

joski

I hate your stupid name you tw@t

br14

1. The Alpha release is an "Alpha" release. It's an extension of the Playbook OS for use by developers.

Playbooks OS has all the things you describe. They weren't on the Playbook simulator either.

2. There were numerous major app announcements. Just none on your list.

The UI looks fantastic. Can't wait to see how RIM has integrated Cascades into their app set.

CanisMinor

1. The irony, when you read other reviews, is that you will learn that the dev Alpha on the device is not even BB10. It's simply a stripped down version of the Playbook OS 2.0. Heck, RIM couldn't even get an Alpha of BB10 out!

2. I consider major app announcements to be the big brand names. Now, I realize that means different things to different people. When Facebook did an early launch on the Playbook - that mattered. To call today's app announcements majors is really a stretch. Read in Crackberry's Forums and you'll find the apps real BlackBerry users consider major:
- Skype
- Tango
- Google Maps
- Amazon Kindle
etc

For that matter, RIM hasn't even released it's own (or own label) flagship apps for the Playbook, like BBM, BlackBerry Travel or BlackBerry Traffic. If RIM is itself not prepared to bring apps to Playbook, why would ANY major developer invest?

Joe257

Note that three if the four apps you mentioned come from companies who have competing hardware interests: Google, Android; Skype, Microsoft; Amazon, Kindle Fire. Of course, they are won't want to support the PlayBook or BB10 but someone else will have equally great apps to replace those. Bing Maps isn't bad -- thanks Microsoft :)

Joe257

Note that three if the four apps you mentioned come from companies who have competing hardware interests: Google, Android; Skype, Microsoft; Amazon, Kindle Fire. Of course, they are won't want to support the PlayBook or BB10 but someone else will have equally great apps to replace those. Bing Maps isn't bad -- thanks Microsoft :)

Joe257

Is this really worth debating? Guys -- this is alpha device, not finished product. Finish product can't be shown yet, waiting for new chipsets and FCC approvals. RIM took the time to build this for developers to test their apps. The BB10 eco is looking very promising with about 25,000 quality apps today, and thousands more in the queue.

Apps aren't content. Nevertheless, App World went from 50,000 apps in January to 100,000 today. That's a 100% increase in 4 months! Hmmm, I wonder if all those developers are hearing the same doom and gloom message as you.

br14

The stock market couldn't care less about RIM's devices - good, bad or indifferent. They make money of they're good or bad. As long as they're not the same.

They're playing price variations in volatile stocks like RIMM, to make a killing. The big players do that by riding sentiment, and perhaps, creating sentiment (if they can do it without being caught),

A quick check of Prem Watsas recent history shows he has experience of exactly that scenario.

Whenever there is a major news item for RIM, the naysayers are out in force, and the players ride the negative sentiment.

It's a vicious cycle and a headlong rush to the bottom if the shareholders do not have the intestinal fortitude to hold on to their stock.

All it takes is organizations with vested interests, like News Corporation, or BGR (both affililated with Apple), to publish the usual "RIM is dead" BS and the game is on.

If the world wasn't full of gullible fools I suppose things might be different.

AfroZepher

Stocks rises on unfounded rumor and drops when more tangible info is made available. . .a "funny beast" indeed . . .

fjfisher601#AC

I'm too am an Investor in RIM- and feel confident they will turn it around- after all- they have Patents, exciting subsidiaries, wonderful Technology potential, the most innovative email and Text apps (I currently have an Android and look forward to coming back ) and the best security in the business, and I am a business user- I could care less about gaming)-

---- but most of all they have over 77,000,000 users!!!!!!!!!!!!

boldkeyboardholic

if Apple "patented" (I know it is not a patent) round edges on a phone and troubles Samsung etc. here in Germany - I'm hoping RIM has done somthing to pretend others from copying this aweome touchscreen-keyboard!

When I saw it I just thought: wow I think I could live with this! And I'm totally in my 9900-Keyboard!
(hopefully nobody else has a patend for something like this touchscreen-keyboard... ;) )

And: Yes this patend war is terrible and at the end WE pay all this lawyers and penalty payments... >:(

jasonec

I think RIM needed more WOW value yesterday - I mean, I thought the keyboard and camera features were cool, but overall I was thinking "meh" - still, as a BlackBerry developer, I wish I was in Orlando right now.....

savingblackberry

RIM needs to have the perception changed immediately or else app developers will fliee and so will the customers.
RIM should partner and get confidence boosted.

All all you Crackberry addicts, go buy some stock in RIM. If 500, 000 crackberry addicts buy average of 400 shares (200 million shares out of 525 million tpotal shares) each, they can sweep off all the shares available for sale and then some. Suddenly RIM will be HOTTTTTTTT

So I challenge all you crackberry addicts, are you all just talk or can you buy some shares as well?

And for goodness sake buy a playbook as well... if you have not bought one yet.

Spread the word on Twitter and Facebook and linked and all such social network sites. All of us can fight back those who want RIM dead.

Geeoff

The stock market credo is: "Buy the rumor, sell the news." This is exactly what happened.

Even Apple went down after its record earnings.

Give it a bit of time and RIMM stock will start slowly going up again.