Wednesday, January 23, 2013

Shares of RIM Shoot Up 9% as BB10 Launch Draws Near

Research in Motion (RIM) shares have gone up $1.40, or 9%, at $17.25, right after CEO Thorsten Heins told Germany’s Die Welt yesterday about possible exit strategies for the BlackBerry maker. The company is all set to launch BB10, which is a comeback of sorts for the BlackBerry brand on 30th January at a New York event.

Capital‘s Gus Papageorgiou upped his rating of the stock to Sector Outperform from Sector Perform, with a $23 price target, up from $18.60 previously. He elaborates that if the company manages to sell 29 million BlackBerrys this fiscal year starting in March, it could produce $4.13 per share in profit. This is a huge increase from projected losses of $1.15 per share this fiscal year. RIM will also add about 80 million subscribers if it manages to reach the expected figure. Papageorgiou also points out that, sales to end users have been better than those to carriers and retailers in the last 12 months, which has helped to clear inventory in advance of BB10′s introduction.

There is a “pent-up demand” as evinced by the stretching out of BlackBerry replacement cycles among users from 15 months or so, on average, to more than 25 months. According to several reports BlackBerrys running BB10 will supposedly be more advanced in numerous respects to Google’s Android and Apple’s iOS. The BlackBerry Balancehas garnered a lot of praise from Papageorgiou, which lets the handset to maintain a separation between personal and professional apps and content.

As of now, we have to wait for a week to see if RIM can actually deliver what it has promised.

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