Research in Motion Rally Continues on Upgrades and Licensing Considerations

Andrew Klips |

Research in Motion (RIMM) continued its multi-month rally with Toronto-listed shares surging another 11 percent on Monday while Wall Street was shuttered in observance of Martin Luther King Day.  One of the catalysts was RIM’s German-born chief executive Thorsten Heins conducting an interview with German newspaper Die Welt, explaining that the company is examining licensing its new BlackBerry 10 operating system to rivals.

Heins explained that RIM must first show that there is global demand for the new operating system, but he believes that the new BlackBerry 10, scheduled for launch at the end of January, can play a “substantial” role in the industry.  Translated by Google Translate (the article is in German), Heins said that the new operating system is a “true mobile computing platform” and that “We shall then see that the trend is towards strengthening the BlackBerry again.”

Heins apparently isn’t basing his beliefs on simply corporate bias.  The company has visited more than 100 network operators with an “extremely good” response towards the new BlackBerry.  The major carries, Verizon (VZ), AT&T (T), Sprint Nextel (S) and T-Mobile have already confirmed that they will support the new BlackBerry 10 platform this year.

When asked why it took so long to develop the system, the RIM exec explained that the BB10 has been designed for the future, not only for smartphones, but for use in vehicles as they become increasingly networked.

There will be about 70,000 applications available for the BlackBerry 10, according to Heins.  Developers will also be able to convert Android applications for the new system.  Many of the apps will not be free and developers are recommending the BB10 programs, as it puts some deserved cash back in their pockets.

Getting away from the notion that BlackBerries are only for business use, RIM has designed the new system to be divided into two, completely separate and encrypted parts; one for business and one for personal use.  There is no interaction between to two areas of the smartphone, giving users confidence that personal information and corporate information do not mix, nor can be viewed when one side or the other is chosen.

Heins says that the perception of BlackBerry being just for corporate use is “no longer the reality.”

After some restructuring, replacement of the management team and efforts to run more lean operations, RIM is now debt-free and has $2.9 billion in cash available, said Heins.  Because they are now more financially fit, the company is in no hurry to decide about licensing their technology or deciding on a sale of the hardware production operations.

Providing fodder for RIM bulls on Monday, Byron Capital Markets Ltd. Analyst Tom Astie issued a research note saying the company under its new management, the balance sheet and its new operating system look strong.  Astie’s note follows a recent upgrade for RIM and a share price target hike from $13 to $19.50 by Jefferies & CO. analyst Peter Misek.

Once Canada’s tech darling (although now the nickname seems to be justified again), shares of RIM on both sides of the Canadian/US border had been getting flat-out pummeled since US-listed issues hit highs of $148.13 in June of 2008; dropping as low as $6.22 in September 2012.  Since then, shares have grown long legs to climb back up to above $15 each (gains of 145%) to now be close to fresh 52-week highs.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ADM23 Archer Daniels Midland Co. 1.750% Notes 2023 n/a n/a n/a 0
S Sprint Corporation 6.78 0.05 0.74 8,658,324
T AT&T Inc. 40.85 -0.61 -1.47 26,237,804
VZ Verizon Communications Inc. 52.06 -0.43 -0.82 13,266,878

Comments

Emerging Growth

H-Source Holdings Ltd.

H-Source Holdings Inc. is a technology company operating within the healthcare industry through its subsidiary, H-Source, Inc. The Company has developed a transaction platform that provides a private, secure and…

Private Markets

WayBetter

The spark hit Jamie when he saw co-workers competing to lose weight. Instead of pizzas and subs, they were eating salads and jogging along the river. Some were sneakily leaving…

Cloudera

Cloudera offers enterprises a new data platform built on the Apache Hadoop open-source software package. Hadoop is a data-management platform that can consolidate data in a single repository for comprehensive…