Editorial

Talking Stocks: How BlackBerry, Apple, Google and Microsoft performed the past year

Editorial

Sorry, this Z10 gross margin analysis is totally out to lunch

News & Rumors

BlackBerry stock nosediving on Home Depot news? (Updated - Jim Balsillie liquidates his shares)

News & Rumors

BlackBerry’s first day of trading as BBRY is off to a good start

News & Rumors

BlackBerry Stock Talk: What’s expected from this week’s quarterly results?

Editorial

Brainstorming BlackBerry 10: Hardware back in black!

News & Rumors

The volatility in Research In Motion shares continues

News & Rumors

What are the bears saying now?

News & Rumors

Scotia Capital outlines continued case for upside in Research In Motion shares

News & Rumors

Time to buy shares of Research In Motion?

News & Rumors

The case for upside in Research In Motion shares

News & Rumors

RIM stock price up 17% this week

News & Rumors

How this form of insider trading on RIM and Apple stock became so common

Editorial

Here’s what investors need to see from RIM at BlackBerry World

News & Rumors

What's next for Research In Motion stock?

News & Rumors

RIM Stock Trading Below Tangible Book Value Again

News & Rumors

Jeffries cuts RIM stock from $15 to $12. Should You Really Believe This Big Call?

News & Rumors

Halliburton and NOAA say "Goodbye to BlackBerry." Can RIM Maintain its Strength in the Enterprise?

News & Rumors

Stock Talk: Here’s The Message RIM’s CEO Sent to Analysts Yesterday

News & Rumors

Can RIM Succeed Without Significant US Market Share?

< >

Stock Talk: What’s with the Citigroup sell recommendation on BlackBerry stock?

Citigroup
By Chris Umiastowski on 23 Jan 2013 12:42 pm EST
1
loading...
14
loading...
69
loading...

In less than a week, BlackBerry 10 will be officially unveiled. RIM stock is at 52 week highs, and lots of analysts, investors, and even the media, are jumping on board with great things to say about the turnaround in Waterloo.

When this stuff happens, analysts have to react. They either jump on the bandwagon concluding that something good is really happening, or they stick to their guns and issue a cautious report.

Jim Suva from Citigroup is in that second camp. He reiterated his sell rating on the stock just yesterday. Eric Savitz from Forbes wrote a nice little summary of Suva's report, and I thought it would be helpful to put it all in perspective rather than just report on what happened.

Citigroup's main argument is that you can't judge RIM carrier and developer support. It's easy for carriers to support BlackBerry 10, because they aren't committing a lot of money to it. That's true. Suva argues that for RIM to succeed it needs to drive big sell through of devices to end customers. That's also true. No arguments from me. At least not on those points.

Next, Suva seems worried about the emerging markets because Chinese handset vendors, like Huawei, are introducing $150 hardware running Android. This could throw a monkey wrench into BlackBerry 7 sales, and cause a drop in subscribers. He's arguing that these cheap Android phones give consumers in emerging markets another option when they go to upgrade their phone.

Of course this is true. But it's also true that RIM is looking at all options to get BlackBerry 10 into developing markets at lower price points. It's pretty obvious that if Huawei can make a $150 phone that runs Android, they could also build one on BlackBerry 10. It's not mysteriously more expensive to build a BlackBerry, should RIM license the OS to another vendor.

We discussed this back in August, when rumours were flying around that RIM might sell its hardware business. In fact, what's really happening is Thorsten Heins is looking for an easy way to penetrate the emerging markets with lower cost hardware.

I also think Suva is making a mistake by worrying about BlackBerry 7 right now. Currently RIM doesn't make any money on its hardware. So if they were to see a successful rollout of BlackBerry 10 in the USA, Canada, UK, and other developed markets, profit will rise significantly. If they see a slowdown in emerging markets, it won't really affect earnings at all (yet).

Lastly, Suva argues that enterprises will take 4-6 months to evaluate BlackBerry 10 before deploying it. That may be true. But that doesn't affect the consumer market nor the BYOD market.

Anyway, time will tell. But I think we can all agree that sales of BlackBerry 10 are going to be the ultimate indicator of success over the next year.

89 comments

Reader comments

Stock Talk: What’s with the Citigroup sell recommendation on BlackBerry stock?

89 Comments
Sort by Rating

Serious question. Why is rim losing money? With 79m loyal users, and i thought 9900s were selling well too. And rim gets money from carriers. What is the problem? Thats one thing i cant seem to get. Is it just a high cost to build phones? Or just mismangement? Rim has been streamlining a lot latkey so maybe that is why?

It's a simple case of profits versus operating expenses, development, and production costs. Those road shows (BB Jams, hackathons) were carefully managed on a shoe string budget to ensure that RIM kept growing rather than shrinking their bank account. They needed the money to launch BB10 and to continue making the investments they need in technology. RIM is not in a crisis mode. They have ZERO debt and so no creditors will be calling. They have $3 billion in cash plus other assets that can be liquidated if necessary. RIM doesn't have any cash flow worries -- all a figment of someone's imagination on Wall Street.

In other words, there is no "bad management" here. The company is healthy considering the fact they have NO new hardware product launches in 18 months. I won't count the 4G PlayBook because that had a niche market compared to their smartphones or even to the WiFi PlayBook.

Wall Street is just real finicky. They still haven't realized that RIM is launching a game changing platform that will sustain them for the future. Wall Street cannot and does not put any value on the "cool factor". BlackBerry 10 makes BlackBerry and RIM cool again. It's being seen as revolutionary and ingenious, even sexy now.

What price can someone put on a feeling? This is what RIM "took" from Apple, and they've managed to make it a reality -- patent free! :D Apple is the one most at risk of losing market share to BB10. I used to think it was Windows Phone 8 but RIM has set their sights even higher than Microsoft's small share of the smartphone market.

Android is in a different realm, different pressures. They have many really cheap devices and some decent ones, but the quality and reliability just isn't there. Some Android folks may make their way back to BlackBerry but I doubt if they will suffer as much as Apple, who now owns the oldest and least flexible smartphone OS. I've been reading that iPhone 5 sales have dropped significantly since Christmas (source: BGR), and Apple recently dropped the price on their 32 GB iPhone 5 to make it more attractive.

Welcome to market reality, Apple. Got to get back to the drawing board and build the next big thing. Too bad Steve is not around to help, because everything Apple still has Steve's branding. Fortunately, they have time and cash to slow the downward slide and turn things around in a year or two.

+10 Great analysis. I was one of those Droid folks that came back to BB. I came back at the right time too. RIM is on the way back up and it looks like so far, so good.

No bad management? How about not being able to build a smartphone over the last 2 years that anyone actually wants to buy? RIM has not been able to build a phone that competes with the iphone or the Android devices. The STORM and TORCH handsets failed miserably in that regard. RIM has lost a ton of marketshare in this space to Apple and Android. I believe that RIM's share of the smartphone market in the US in December was something around 1.6%. Less than even Windows phones that actually picked up some marketshare. Just a few years ago, RIM was on top with regard to marketshare. In short, RIM "blew it" because of nothing other than bad management.

How about also putting out a tablet that was also a failure in the marketplace. They have not been successful in that product segment where Apple, Android, Amazon and B&N have been successful.

I own a TORCH2, a BB PLAYBOOK and like those devices. I plan on purchasing a Z10. But it is simply not reasonable at this point to compare RIM and Apple. Apple is on top right now because it designs and sells great products that people want to buy. BB is not because right now it does not design and sell great products that people want to buy. Hopefully BB10 will change RIM's fortunes but that is not a guarantee. To the extent you see RIM as somehow having bested Apple with BB10, even if this were true, you have to expect that Apple is working hard on its next OS as well.

You state that "BlackBerry 10 makes BlackBerry and RIM cool again. It's being seen as revolutionary and ingenious, even sexy now." That is a pretty bold statement from someone who I suspect has never seen a BB10 device. I read alot about these things. I speak to alot of people. No one I know thinks Blackberrys are cool and in fact people look at me like I am crazy when I tell them I intend to buy a BB10. Maybe your statement will turn out to be true, but right now I do not see that as a credible statement.

"Why is RIM losing money?"

Because during the good times they expanded costs way too rapidly, assuming that the phenomenal growth experienced in the mid-2000's would continue indefinitely.

Employee numbers grew from 2000 to 20,000 in the years from 2004 to 2010.

And then sales dropped, and more importantly RIM had to drop the selling price of products to maintain sales.

It's telling that Thorsten Heins managed to find $1 billion in cost savings apparently without breaking sweat or impacting current service.

Those savings should be realised this year, and therefore with or without BB10 RIM may be profitable. But BB10 will be successful and the Citi analyst probably has an ulterior motive for negativity.

Lots of institutional investors must be worrying about being long Apple and short positions on RIM.

Those are great points. Citi needed plenty of help from the US government to bail their butts out, doesn't seem like they learned anything from that embarassment!!! They missed out on a huge rally here by waiting to make a call like this. Thanks

Anyone can call an event after it has occurred. What keeps analysts in business (and/or separates the jokes from the greats) is their ability to successfully predict on their areas of 'expertise'.

If RIM goes through the roof and is a huge seller everywhere, then this guy was wrong and you can mock him. Otherwise, he was right and earned his paycheck for once.

Also, Citi's government bailout was needed because like many other big financial institutions, they gambled on sub prime mortgages and lost, not because they shorted/longed Telecom/technology stocks.

The situations couldn't be further apart and to say this analyst's actions here are tied to a failure to learn from mortgages just reeks of desperation to discredit this guy and his employer.

And then there is the fact that Citi just didn't understand what they were doing.

RIM is in a very good position right now. Not awesome but better than good enough.

Yeah and there sure are great analysts on RIMM. Remember when the stock broke $10 and everyone decided to after the fact raise their price target to $10? Tell me with a straight face that these people get paid for predicting and not because they know people. The vast majority of analysts who have covered RIMM lately are pretty bad at actually looking at the company. Their problem is they spend too much time reading stuff churned out by random news websites and calling it "research". Been holding the stock for a bit and shaking my head at the people still yelling short. On the bright side some analysts are starting to see the light. Broken crystal balls...

They don't know shit about the stock market, all then no is how to manipulate it for there benefit.

I would be surprised if Citi had more than an incidental transitory position in any stock the analysts cover. Banks like Citi money on small margin transactions and lots of them.

Isn't this his job to worry about the stock price BEFORE the price drops? I'm a BB fan, but if I owned stock in the company, I would sell it now. While I am hopeful for a return to greatness, I would rather be safe than sorry. The phone market is SUPER crowded right now, and its not going to get any more sparse.

the phone market is only saturated in developed nations. china, brazil, russia, indonesia, nigeria... those are goldmines waiting to happen.

I am objected to that. If you have the best hardware/software, the money will follow that. Look at car companies, there are so many of them now than 20 years ago. They are still in business.

Not the best analogy.

Look at Saab. They made some of the objectively best cars. But they weren't "cool" cars, so they didn't sell. Saab went under.

Hyundai makes some shoddy cars with flashy gizmos and they're selling like hotcakes.

You can make the absolute best of something, but if people don't want to buy them, it doesn't matter. You're going to fail.

No.
Saab was a cut above Fords until about 1985, but by about 1990 they were more about style than function.
Saab was taken over by GM and started to have to use bits out of the GM bits basket. Quality and "difference" declined till Saab were just making rebadged Opels. Saab became an ex-brand. No big surprise.

Hyundai...make what are now remarkably good cars and have succeeded very largely on word of mouth. They don't tend to be the most bleeding edge technology, but they are solid and reliable. Their other brand, Kia, was rated #1 in the UK by J D Power this year.

Do it properly at reasonable prices and get the word out, and the buyers will come.

Chances are that the people who have RIMM stock right now are in one of the following 3 situations:

1) Have had RIMM stock for a long time and probably lost a lot of money.

2) Bought when I did, when the stock was in the $6 range (at least somewhere below $7)

3) Bought recently at $12 to $17

Anyone in any of those situations will see way more potential reward than risk....

1) This group has lost a lot of money and has probably started considering it gone. At this point, it makes more sense to just pray that RIM some how gets back above $50 (at least over $30) and they can salvage some/all of their loses.

2) This is my case, so ill explain my thinking here. I bought in at $6.35 originally. Since then, I have been selling at the peaks and buying in the valleys. This has allowed me to up my original 100 share buy in to 483 shares. If I did the math, I could find my exact break even price, but I can promise you it is well lower than the stock can even get (it would be bought out before that). Anyways, there is very little risk here and the potential reward is great. Sure the stock could drop back to $6 again, but if all goes well, it could climb over $30 and even higher.

3) This group just invested and most likely they are in for the long haul. There is way too many unknowns for someone to have bought recently for the short term. This group if people are most likely waiting it out soon.

Anyways, my point is that many RIMM investors are long on the stock right now.

*This all having been said, the announcement has the potential to skyrocket the stock or completely crash it. One wrong word or delay will send this stock nosediving.

I think Citi wants to get cheaper shares for their clients before RIM skyrocket to the Saturn planet. I have talked to many friends lately and they told me if BB10 gets a good review plus more Apps after the 30th release date, they will consider switch from Android/IOS to BB10.

Most of his arguments are fair but the main reason many people in emerging markets go with BlackBerry is because of BBM and how cheap a BIS plan is. As well China is not a market that they or anybody seem to do well in. As well a lot of enterprises are evaluating BlackBerry 10 and BES 10 already with their Ready Program. And a reply to kmonarq7 the phone market may be crowded but as Kevin has said many times, carriers are stilling looking for a third os and as we have seen windows phone 8 sales have not been amazing. I have seen a lot of people change their attitude towards BB and even one apple fanboy has now said he wants to try it. I am sure people were told to sell their apple stock in 1997 too but look where it is now.

I think seel through in the US will be tough, but probably good elsewhere. This guy is making the mistake most analysts make which is overvaluaing the US market. Yes it is an important market but it is less important than it used to be and will only decline in importance.

If RIM could get Lenovo to produce BB10 phones it would be a dream come true. Not impossible. Samsung dominates the Android market. HTC/Nokia look like windows phone, but there should be others out there that want a distinct phone to push. Lenovo would be the best of the bunch IMO.

TH has done so much right since taking over I gotta think he's on top of everything that this guy is concerned about. TH is right: first step is to prove BB10, then move on to partners. If BB10 is a good as it looks, they will come.

Every time I see analysts talk about Huawei and ZTE as challengers to $RIMM, I question why anyone would buy a phone made by a Chinese government owned companies.

I have a strong feeling $C are shorting a lot of $RIMM shares and have some $18 options due for expiry on Thurs ;-)

Lets see how many people are going to switch to BB10 from Adroids and Apple.
Remember there are a lot of people who still haven't upgrade ( like my self, contract is up in May 2013), there going to see how BB10 works and then they make decision which phone they are going too.

One additional point. Enterprises may take time to "formally" deploy BB10, but their business users will start buying the phones in advance. The way BYOD is shaping up, it's the choices of the business/consumer users that drives corporate IT into figuring out how they will support a new device. Each company is different but if the business demands it, CIOs need to figure it out....and fast,

"Lastly, Suva argues that enterprises will take 4-6 months to evaluate BlackBerry 10 before deploying it."

Umm... no. It might be a slow roll-out, but most Enterprises (who already use Blackberries) will deploy BB10 right at launch.

Has Savitz EVER done a positive story on RIMM? No seriously, I would like to know....I don't think he has

He kinda said something once that you could, if you had a vivid imagination, consider to be possibly positive. But that was years ago.

The problem with this argument is that since 2008,any analyst that has been down on RIMM was correct, that is until about May of last year, maybe a little later. Most of those same people have been wrong since May, but some were praising RIMM and BB10 since the first behind the scenes preview they showed analyst and reporters. Those are the guys I will start trusting, not the guys that have been completely wrong since May.

"Next, Suva seems worried about the emerging markets because Chinese handset vendors, like Huawei, are introducing $150 hardware running Android. This could throw a monkey wrench into BlackBerry 7 sales, and cause a drop in subscribers. He's arguing that these cheap Android phones give consumers in emerging markets another option when they go to upgrade their phone. "

Just going on your report (of the analysts report)... one aspect that seems to be missing above is that cheap hardware is not the end-all and be-all in emerging markets. RIMs network infrastructure allows them to enable carriers to provide relatively low-cost, value-added services (email, bbm/IM, social media). Indeed it is this ability for middle-income consumers and small business owners in emerging markets to access a robust service offering at an affordable price that has been driving BB's competitiveness in these markets (alongside their 'cool' factor amongst teens).

Zzzzz, nothing to see here. CITO analysts are worse than BMO, 19 analysts and CITI has the lowest rating on RIM, not sure why in light of that they made front page??? Lol

This seems really simple to me. The stock is at a 52 week high. RIM is unveling BB10 next week. Based on past experience (I'm looking at the Playbook, here, as ONE example), next week's unveiling is likely to show a whole lot of unfulfilled potential. In other words, BB10 will look great. It will be clear how it CAN be great. But, it won't actually BE great. At least, not yet. All the apps that COULD be there to make it great, won't be there YET.

So, the stock will continue to go up in the run up until the unveiling. Then, a lot of people will be disappointed and the stock will take a hit.

And that's what the stock market is all about. Selling when it's high and buying when it's low.

Lol,thanks Warren,didn't know you can see the future (Jan.30.2013)better than RIM, the carriers,analysts that have seen BB10 up close and raised their targets,excited devs,etc etc. Has to be one in every crowd I suppose,lol.

Apps won't be there,....Hmmm 15,000 apps ported in a 36 hr period. How do you figure? Developers have been designing, and apps being accepted almost everyday. Read the forums,.. apps are headed in the right direction fast. Rimm is set and apps are set. The stock has been climbing daily. I believe RIMM will have a success on all markets. Just watch!! Don"t speak.

In fact expectations are always unrealistic, and following any big launch share prices tend to dip due to profit taking, and people not wanting to pay the high price when there is now nothing to look forward to to create some hype.
The free market doesn't really exist, it's all about psychology.

I'm glad u have a crystal ball and can see the future and know BB10 will disappoint. So I'm guessing that's why you have loads of money knowing when to buy and sell on the stock market. I bet you won all the biggest lotteries too because you know what the winning numbers are gonna be. But it puzzles me why u bother with the stock market since you can win millions every week on the lottery. Wait a second i think I get it now your full of shit and are most likely one of the people trying to short the stock but realize you're about to loose huge. We all know you haven't spent a single second with BB10 because if you did you would realize ios and android are severely inferior to BB10. Don't worry keep buying apple shares so u can loose even more of the millions you won onto the lottery.

To a degree, I have to agree with you on some level. There is a potential that history will repeat itself, I'm talking about previous full touch BB phones and playbook, essentially what BB10 is made up from. Whether people like it or not, that is the truth.

But to go against that, RIM is thankfully under new management, major difference. We know for a fact that RIM isn't dumb enough to show anything (apps, features, etc.) that isn't set in stone for product launch. RIM can't afford another DOA launch like the PB and I'm confident they won't that happen. Really wish Thorsten was in charge during the PB launch almost 2 years.

"So, the stock will continue to go up in the run up until the unveiling. Then, a lot of people will be disappointed and the stock will take a hit."

Annnndd.... it's down 13% this morning? Maybe the analyst calling for a sell-off wasn't so dumb after all?

This is the same idiot that rated RIMM a sell in September when the stock was at an all time low. I think he is just trying to get some doubt out to stop the rally that is making him look like he has no clue.

Annnndd.... it's down 13% this morning? Maybe the analyst calling for a sell-off wasn't so dumb after all?

Also, how is it that some of the commenters are basically saying that RIM can provide cheaper service to consumers in developing markets? I.e. with statements about RIM's network infrastructure (which doesn't even exist in these developing markets, right?) and BIS?
The last time I had a Blackberry (a year and a half ago), it was on Verizon and it cost me $45/month (Blackberry Enterprise plan) to have the same thing I got for $30/month when I switched over to a 4G LTE phone.

Nuff said,lol!

Citigroup agrees to pay $590M in shareholder suit
Updated 8/29/2012 1:56 PM
Comments 6
NEW YORK (AP) – Citigroup has agreed to pay $590 million to settle legal claims by shareholders that its executives misled them about the bank's growing problems before the financial crisis.

Justin Sullivan, Getty Images
Pedestrians walk by the Citigroup Center on July 16, 2012, in San Francisco.
Enlarge
Justin Sullivan, Getty Images
Pedestrians walk by the Citigroup Center on July 16, 2012, in San Francisco.
Sponsored Links
The bank denied the allegations Wednesday, but said it agreed to the deal to eliminate the cost and uncertainty of litigating the class-action suit.
Plaintiffs say Citigroup executives kept mum between February 2007 and April 2008 about huge losses the bank faced on complex mortgage investments. When the problem was disclosed, they say, Citigroup's share price plunged. They blame the bank for their investment losses.
The case, filed in late 2007, was one of the first major lawsuits related to the toxic investments that fueled the financial crisis in 2008. It's also among the biggest proposed settlements of any crisis-related case.
In a statement, the bank said it is "pleased to put this matter behind us." It called the proposed settlement "a significant step" toward resolving the reams of litigation it faces as a result of the financial crisis.
Citigroup was one of the banks hit hardest by the crisis. As it faltered in the fall of 2008, the government made stronger banks take multibillion-dollar bailouts in part to mask Citi's weakness. Citi took direct bailouts totaling $45 billion and relied heavily on other emergency programs from the Federal Reserve. It has repaid the money with interest.
The bank said in its statement that it is "a fundamentally different company today than at the beginning of the financial crisis," having overhauled its risk management, reduced risky investment holdings and sold off non-core businesses.
Citigroup said it already has set aside enough money to cover the cost of the settlement.
The settlement is subject to court approval by U.S. district judge Hon. Sidney Stein in Manhattan.

Also, how is it that some of the commenters here are saying that RIM is able to provide cheaper service to the consumers in developing markets? I.e. posts about RIM's network infrastructure (which doesn't exist in these developing markets, right?) and what they provide with BIS.

I left Blackberry a year and a half ago for a 4G LTE phone. But, at that time, I was paying Verizon $45/month (for a BB Enterprise plan), which only cost me $30/month for the same thing once I switched to Android.

In markets where data is charged by the MB RIM does have an advantage with data compression, this make them cheaper to "operate" even if the initial cost is higher than a China made Android.

That is RIM's problem in the US, data is sold by the GB... so data compression doesn't matter nearly as much. So the extra $15 a month for a Blackberry hurts RIM here.

I know of a surprisingly large number of people that have left the standard big carriers for prepaid plans Boost & Walmart. Most of these plans are unlimited data... but they do charge more for BB devices.

BES are the most expensive plans. It is believe RIM charges $10 a month. This gives you access to your company's own BES Server which has it's own private encryption keys, tasks, calendar, email and contact sync with your Outlook or Lotus Notes. As an aside it also has Data compression which BIS also provides you with. This also enabled your company to manage your device easier. Not really a benefit to you, but to them they could lock down everything from BBM to your Browser, define what you could install on your phone, and wipe it remotely.

The Android data plan just gives you Data.

The carrier was taking an extra $5 a month in profit.

BB10 is not set up the same way. Makes sense since most consumers feel the same way you probably do. Companies should be the ones pushing their employees towards BES. More details will be available at launch on BIS/BES fees I'm sure. I expect them to take the form of various add on cloud services.

I have no clue what your talking about. I just checked data plans and iphone and android data plans cost the same as BlackBerry data plans. Nice try with that but go spread your Bs somewhere else.

I'm sure those more technically inclined can answer this with the right amount of detail... so perhaps underlying my comment is less about 'network infrastructure' and more about data compression (i.e. efficiency) and BIS... but for the record, I didn't say anything about 'cheaper services', rather I was referencing value-for-money... in a (developing) world where data is quite expensive, bring able to access a robust set of data services at an affordable price.

While I understand the argument put forward by Suva, I think he makes seven critical errors. First, as noted above, he overestimates the relative importance of the American market. Second, enterprise is already assessing BB10 units and BES10 , so the 4-6 month lead time is too generous (more like 1-2 months at most). Lets face it, the US government gave the device it security clearance months ago and I'm sure that this hasn't gone unnoticed. Building forward, my third point centers on this analyst's implicit dismissal for security. It was not discussed in a serious way and it is a concern that weighs heavily on IT administrators. RIM provides simple solutions (front-to-back) where everyone else has some sort of jumbled convoluted concoction of technology. Fourth, the analyst's doesn't appear to understand that RIM is not building a new OS but an entire platform. As such, it has multiplying effects beyond phones that Apple and Google can only dream of. Fifth, in regards to emerging markets, the best way to build a low cost device is to use efficient well built software. This is the Achilles heal of Android. Hardware specs have to be higher (i.e. more expensive) to run Android inorder to compensate for the software. It is clear that BB10 doesn't suffer from this weakness. To be honest, I think this is more of a concern at the higher end where Samsung has to use expensive hardware to achieve the performance level of an iPhone and likely BB10. This strategy will only work so long. Sixth, Suva assumes that Google is happy making next to nothing in the mobile phone space. I guess this doesn't bother him because he works for a bank that is backstopped by the federal government. Last and most important, BB10 is simply a fantastic forward designed product. From what we can see, it runs circles around iOS and Android. It has a new user experience, the software is efficient and in head-to-head comparisons, the competition can't keep up. If the Apps are there, which they seem to be, then I can't see why consumers would buy an old/stale phone with poorer performance. Maybe, the analyst think people are stupid. Personally, I have a little more faith in the human race.

Chris has a great point and article as usual and I can't wait for his next 101 video earnings lesson. RIM is not making any money from me other then the few apps I am buying on my Bold 9900.
Now I will be buying both the Touch and QWERTY phones , plus I have family members ready to buy the Touch as we speak ! That's profits for RIM. Now multiply that by 1/3 the 80M user base and that's a nice profit the street is not forecasting. JIC 999

I have to question your link to Eric over at Forbes ,Umi? Eric adds NOTHING to the lame CITI analyst, in fact all Eric does is repeat the same CITI words. It's also well known Eric at Forbes has been negative on RIM for months. You trying to push your serv rev agenda again Umi? What gives, you are Team Blackberry are not?? I'm still confused why this even got ink, let alone on the front page, some splain'in to do me thinks,lol.

Well Enterprise might take time to refresh currently operating BB OS devices, BES 10 is out and is being deployed in the field asap. I work for a major IT Service company, and we have all our orders in for more BES servers. Remote screen sharing will be fun.....

Have a look at the image from this post http://crackberry.com/purported-blackberry-z10-advertising-images-now-av.... The icons in the screens are bright and sleek looking here that what I read from later posts in Crackberry.

These are the details I care much more than what analysts are staying when initiating a long-term position on RIMM. Analysts are only half true either because they know only half of it or because they want to spread lies.

All said, RIMM needs to show more than what is rumored already. SIRI like app can make or break depending on how well it works, Maps app etc.

i can't believe he was so aggressive to say that he expects the stock to drop down to $6 again.

he didn't even say whether he's seen, used, or even researched into bb10. kinda diminishes his credibility.

I think people should just take a long term view. These analysts are looking at short time periods as they most likely get quarterly bonuses. If Rimm skyrockets and he has it shorted his performance this quarter will be diabolical, so no bonus.

If you are holding a non leveraged position you can just sit on the position. Even if bb10 is not a resounding success and it is just good and ticks over, the stock is still undervalued where it is today.

I have come to the conclusion that most analysts are either idiots or there are just too many interests behind the scenes for them to give any sort of valuable analysis.

Anyone can make can make an argument for or against, if you have enough time and statistics (MWDs in Iraq, anyone remember that).

You should look at the facts apple is out of favor lacking innovation , wp 8 hasn't really caught on and android has reliability issues/is a bit of a mess.

BB10 quite literally addresses all of the issues in the smartphone market atm.
Reliability, security, touch, qwerty, byod, app ecosystem, innovations such as keyboard, bb hub, bb balance, the list goes on.

The only reason it won't be big is if Rimm truly balls up the marketing, or there are lots of issues once people get the phone (os buggy etc)

Can anyone give me one good reason why BB10 will be a flop based on what we have seen so far?

Stick to your guns! bb4life

I mostly agree with your comment. One way it can fail is with these flaws in BB10 or BB Z10 (Buggy or Jittery OS, marketing etc or looks and quality of Z10).

Other doubts I have are how well RIMM can execute the tablet business. Playbook is already a dud!

I would say Win8 or WP8 combo has a much better acceptance in that area. Only thing is that MSFT is not giving any liberty to OEMs esp. in terms of form-factors. Its like they don't want to eat the cake and no one else too.

Bottom line is that NO ONE know what the future really holds. When the parts for my crystal ball come in and it's working again, I'll let you know. Until then, make a reasonable guess and don't get bent out of shape if it's wrong. Oh, and I'll also go buy a lottery ticket. Just one.

I would think that Mr. Thor could gauge it by now. Betting on BB10 hopefully wont be a bad idea!

Citigroup -- its investment advice is so good that it required $90 billion in TARP money and $300 billion in Federal Reserve bailouts to avoid failure in 2008.

I've been to Nigeria recently and people ar happy to buy a Chinese feature phone as a backup phone but their smartphone is definitely not a Chinese phone. Smartphones are either a Blackberry or a 4" or bigger screen based smartphone for internet access.

I repeat, Chinese smartphones have a really bad rep and people only consider Chinese phones as throwaways.

It is not just Chinese smartphones. It's Chinese made everything!!. The country might be under communism, unfortunately, it can't control the new found enterprise freedom under the regime. Everyone and anyone want to be the next Li Ka-shing the richest guy in Asia. With the gold rush mentality, the quality and standard of products are inconsistent at best, never mind usability. Kind of remind me of Japan back in the 50's and 60's when they produce the worst electronics products. Here the similarity ends. The Japanese culture is very different from China. But I digress. The point being China as a manufacturer and producers do not have the best reputation right now. It will take an industry revolution in China to change that image.

Case in Indonesia, people love Android phones but packet-data subscription is EXPENSIVE, BB only need IDR100,000 per month for unlimited data plan, which is very affordable compared to other data plan using other handset. Plus u got BBM, the most powerful messenger in the universe :). So affordability is the key, even the handset itself is not cheap.

One more thing, BB is a tough handset, compared so plasticky Samsung and iPhone which will crack immediately when fall. So this is another selling factor.

SEA - powered by BlackBerry® Bold 9900 & PlayBook™ 32Gb

I've been noticing a lot of Android hounds of hell doing what they can to distract, discredit and manipulate the real facts about BlackBerry 10.

I have advise for these droids, be afraid, be very afraid, because BlackBerry 10 once released has no competition, because it's the best mobile platform in existence. Nothing today can compete with it. It will be up to RIM to properly market BB10 so people can finally realise this simple fact.

It is somewhat ironic that both Canada's and the United States' perennial underachievers in the bank category (BMO and Citi) would recommend sell while those which have skated through the financial crisis recommend a neutral, buy or strongly buy position. Whose advice would you take.

I think that sometimes we forget about timing. Its vitally important.
Something can be possible - but if not done well in the time window, its like old fruit. Like the time to get someone else to
...make hardware for you.
...license your system and make-market their hardware.
I hope that RIM brings these steps along timely - that's just as important as if they do it.

Remember what RIM says now about their timing on 4G. They know they were late on reacting and then way off on timing - and we hope that it is a lesson learned.

Citi has a major short position and they are scared, very very scared. There is a perfect storm brewing of hedge fund shorts. Many bought at $10 and are trying desperately to bring it back down. I for one wish that shorting was not possible. Check out this commentary on the whole state of affairs:

http://www.youtube.com/watch?v=u1FCitaQvXw

thank you for this post. I feel more comfortable with my investment again. BB10 all the way. :)

Agreed. Shorting and naked shorting should not be allowed, it should be illegal because markets can and are being controlled and manipulated from this method of trading. Just look at the effects of stock price with just one analyst whether he be wrong or right.

BB10 will be just fine.
If the phones are as good as the reviews, this stock will go on a ride upwards.

They gain more by being the only one saying sell if it tanks than they lose by being one of the many saying buy. If they are wrong, it's only one wrong guess out of their many correct ones, if they are right, they get to be the only ones who said it.

Mr Suva and many other analysts are in a bit of a bind regarding anything that has the potential to threaten Apple. A large number (very large) have positions in Apple. Hedge funds, pension funds, private equity players, proprietary trading desks, etc. They have made a lot of money, even though it has been trimmed lately, so there is a major psychological bias toward protecting the darling.

I am in the market everyday, and on the news programs all day. When you listen to these folks over a period of time, it becomes clear they are heavily invested in Apple's success, both in $ and emotion. It is just human nature. If you have a few hundred million in something you want to believe you are right.

If RIM becomes a major player again and the stock sky rockets, they could make a hell of a lot of money and guess who will be the new darling? There will be a new darling someday, there always is. But right now, the stake holders in Apple want desperately to believe the profit will keep rolling in, so it makes them feel good to read things that reinforce their emotion position.

Lastly, "The Street" is the most fickle of mistresses, they will turn on a dime. Remember when Dell could do no wrong and everyone was running around saying "Dude! you getting a Dell!"

Nick

True.
Apple stock took a hit because it was realised that the mini iPad and the 4/4s phones were a lot of sales, meaning high margin products were stagnant. This is a fashion industry, and fashions change. That should be factored into stock prices, but fashion changing is a black swan event; the downside is unpredictable.
Billions of dollars swashing around on emotion is a scary thing.

Let's face it-analysts make a living by trying to predict the markets but very few actually make a living investing in the markets. I used to invest based on their recommendations but now I try not to invest based on analysts, I invest based on what savvy traders are buying and the savvy trader I saw enter into RIM is Prem Watsa. When he bought millions of shares late last year and then "doubled down" in July, analysts were slamming him for not being tech-savvy. Well I bet those analysts wish they had followed him because tech savvy is nowhere near as important as street savvy. Follow the doers, not the yappers.

Great insight, but the one thing is, rim isn't going to license out their blackberry 10 UI that's used over QNX, but they might just license out QNX and let manufacturers figure out what the hell to do with it, android phone makers might have a clue, others might not at all. Lol

Just saying, QNX can be licensed out, not blackberry 10 because it's a UI covering the default QNX environment.

I don't see that happening at all since RIM isn't in trouble anymore.

Citigroup investors will not be happy when their sell recommendation winds up costing them potential funds. Business runs on a cycle, one cycle creates momentum for the next. Sometimes in business you need to understand that forward momentum takes time to adjust. Look how Apple is slowly slowing down.

Well, maybe the stock will go up and maybe it'll go down.

But Citigroup?. Really? The company that went from $5oo+ in December of 2006 to $42 and change this morning is going to splain me what a good stock is?

Oh, yeah. I'll be hanging on every word.