Can BlackBerry 7 Revive RIM’s Smartphone Push?
Research in Motion (NASDAQ:RIMM) recently announced the introduction of the latest version of its smartphone operating system BlackBerry 7, and unveiled two new BlackBerry Bold smartphones based on this OS.  The new OS has a few improvements over preceding versions like faster performance for touch-screen navigation, web browsing, video and gaming and support for Near Field Communication (NFC) technology. In the U.S. smartphone market, RIM recently lost its top position to Google (NASDAQ:GOOG) Android OS, and has faced stiff competition from Apple (NASDAQ:AAPL).  We believe that RIM desperately needs innovative products to help revive its business and meet our quite bullish $68 price estimate for RIM stock, which is about 40% above market price.
Can RIM Revive its Smartphone Strategy?
In the last few years, RIM has lost market share in the smartphone market and gained market share slowly in the overall mobile phone market. RIM’s overall mobile phone market share increased from 2.8% in 2009 to 3.2% in 2010 while Apple’s increased from 2.1% to 3.1% during the same period.
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The smartphone OS plays a very important role in the success of smartphone product. We discussed its importance and how Apple is able to succeed due to superior browser experience and apps ecosystem in our earlier note titled Apple Still Has the Upper Hand in the Smartphone OS Battle. However, introduction of new features in BlackBerry 7 shows that RIM is making a conscious effort to improve its OS. It also plans to introduce the QNX operating system in 2012, that could ultimately replace the present BlackBerry OS (see Acquisitions and New OS Could Bolster RIM’s Market Share).
See our full analysis and $68 price estimate for RIMNotes: