RIM Plays Catch-Up With New BlackBerry OS

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Research in Motion (NASDAQ:RIMM), which competes with Apple’s (NASDAQ:AAPL) iPhone along with smartphones from Motorola (NYSE:MOT), Google (NASDAQ:GOOG), Nokia (NYSE:NOK) and Microsoft (NASDAQ:MSFT), recently announced the new version (6.0) of its BlackBerry Operating System, which will be released in Q3 2010.

The updated operating system will include new features like an improved browser, broader multi-touch functions and better integration with social networks (Facebook, Twitter).  We believe that the arrival of these features will help RIM to reduce the likelihood of market share losses; however, RIM will not gain a significant advantage over competitors since many competing smartphones already incorporate similar features.

RIM’s Stock Sensitive to Market Share Changes

We believe RIM will continue to gain share in the global mobile phone market from around 2.7% in 2009 to around 8.0% by the end of the Trefis forecast period.

RIM’s stock price is very sensitive to changes in mobile phone market share.  If the new BlackBerry OS could help RIM gain 1% additional market share by the end of Trefis forecast period, it could mean 10% upside to the $75 Trefis price estimate for RIM’s stock.

You can modify our forecast for BlackBerry market share below to see how RIM’s stock could be impacted in different market share scenarios.

Three Key Feature Improvements

Whether or not the new BlackBerry OS helps RIM to gain market share will be dependent on the success of three main features added to the new BlackBerry operating system:

1.  Improved Browser Experience

An improved browser interface on the new OS is designed to make web pages will look as good on a BlackBerry as they do on PCs.  The latest BlackBerry browser incorporates pan and zoom functions that will allow users to access more than one web page at a time.  These features, however, are already available on the browsers of competing smartphones like Apple’s iPhone and Android-based devices.

2.  Broader Multi-Touch Capabilities

Although the BlackBerry Storm introduced basic touch functionality, the new operating system will have a broader array of multi-touch capabilities such as touch control for emails, pinch-zoom for images as well as a touch interface for music and videos.  RIM is once again playing catch-up here as the iPhone, Nexus One and Microsoft’s forthcoming Windows Phone 7 already incorporate multi-touch.

3.  Integration with Social Networks

The new OS will have features that integrate message and status feeds from social media portals like Facebook and Twitter.  Similar features are also available on smartphones like Motorola’s Cliq and Microsoft’s Kin.

The features of the new BlackBerry OS will help RIM negate some of the selling points that competing devices have had over the BlackBerry; however, this may not be sufficient to drive higher market share gains than we currently forecast.

You can see our complete analysis for RIM’s stock here.

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