RIM Stock Prices Jump On BlackBerry 10 Optimism

By: Talha Bhatti  |   November 27th, 2012   |   Business, News, O Canada, Smartphones

Canadian technology giant, Research In Motion, has seen a significant rebound in the build up to its launch of BlackBerry 10.Different analysts now are giving the struggling company’s new operating system and related devices a slight chance of successfully making a recovery in the smartphone market which is dominated y Apple or Android powered devices.

Analysts that work with RIM stock have in some cases increased the target price for stocks and removed sell recommendations. This positive sentiment has been generated thanks to a firm January 30 launch date for the BlackBerry 10 operating system. Another factor that is keeping the stock going is that analyst think the millions of RIM users that have been waiting for a new BlackBerry phone will finally update tot he new OS.

MacDougall, MacDougall & MacTier’s Troy Crandall was straight forward with his thoughts and said that, “This is a game of odds. That’s why it’s very difficult to figure out what RIM’s going to be worth because we can’t say with any kind of confidence whether this is going to be successful, but history tells us it probably won’t.” Crandall has increased the target price of the stock to $10 and has also recommended that people hold the stock for now even though he believes that it is very hard for RIM to come back after losing so much market share. RIM currently holds only 10 percent of the North American market.

BB10 is considered by many analysts as a last ditch effort from RIM to keep afloat. Crandall noted that RIM had hit bottom at this point because there were so many sell orders on its shares. He compared his recommendations for the firm as being similar to struggling Nokia.

CIBC went a lot further than Crandall and moved RIM share target price from US$8 to US$17.CIBC stated that its decision was made on the fact that there were 80 million smartphone subscribers for RIM and that many of them would upgrade to the new BB10 OS when it came out. CIBC also changed their “sector underperform” rating to “sector outperform” after more reviews of the new BB10 OS were received.

Analyst Todd Coupland stated that, “With a January 30 BB10 launch date locked in, along with carrier and developer feedback now more clear, an upgrade of the existing subscriber base will be the most likely outcome. Our rating change is based on RIM’s existing subscribers wanting to upgrade to BB10,” Coupland said.

Not every one is convinced with RIM and analyst Bill Kreher of Edward Jones technology says that, “I certainly can appreciate that the announcement of a launch date has reduced uncertainty and provided renewed hope, but I still think longer term it will be difficult for RIM to recover lost market share from the past.”

Source: Canada Business