Research in Motion: The End is Near

Research in Motion (NASDAQ:RIMM) has too much to prove to the Street and the consensus is for the pain to continue for shareholders.



(theStockMasters.com | Frank Lara) We knew Research in Motion (NASDAQ:RIMM) had one last run left, that run has occurred and now its time to never look back. Think back to the Blackberry Ban when every other country was threatening to put an end to RIM in 2010. We told our readers to buy at that 52-week low. RIM shares then went on a tear and almost bucked above $70 in Feburary. Friday Research in Motion shares closed within 7.5% of its 12 month low.

Could the same game plan be executed once again? Will Research in Motion shares rise from the ashes and prove the Street wrong? Can lightning strike twice for investors?

The Masters aren't willing to go to bat for RIM this time, that ship has sailed.

Last time RIM hit a 52-week low we screamed "Buy". The company at that time had 41 million subscribers all over the planet, the blackberry bans were all hype, and the Street refused to buy the company's impressive guidance.

rimmHowever we knew a year ago that RIM was eventually going to lose the battle to Google's (GOOG) Andriod system, Apple's (AAPL) incredible iPhone, and even Microsoft's Windows Mobile 7 (MSFT). This time the comeback story is much more difficult to believe and the cold reality is starting to sink in.

Last Thursday, IDC reported a significant shift in smartphone sales for Q1 2011. The key takeway from the stats: Apple (AAPL) and Google (GOOG) continue to own RIMM and Nokia (NOK) when it comes to smartphones. The rankings show Q4 2010 to Q1 2011 increases/decreases in global market share (SeekingAlpha.com | Rocco Pendola).

The numbers were the following:
Nokia: 28% to 24.3%
Apple: 16.1% to 18.7%
RIMM: 14.5% to 14%
Samsung (SSNLF.PK): 9.6% to 10.8%
HTC: 8.5% to 8.9%

Worse yet RIM's average selling price for its BlackBerry devices keeps falling. Too bad the company's stock price can't stop falling.

Research in Motion will continue to rake in revenue, but not at the margins that will enable its share price to become a growth stock. RIM will be lucky to ever hit $70 a share again. It could be possible on a long enough time frame or with a reverse stock merger. Then again, maybe RIM will just fade into the sunset or finally get bought out by Microsoft (MSFT). Regardless of the outcome, RIM as a profitable company is questionable at best.

Bottom line: RIM shareholders are in for a tough ride. The Masters are betting on a new 52-week low before RIM shares make any spark of a comeback.