Research In Motion Ltd (NASDAQ:BBRY)‘s revenue and stock price took a steep fall in 2010 when its competitors Apple Inc. (NASDAQ:AAPL) and Samsung gained more acceptance and ate away its market. Over the last nine months, the share price has almost doubled from $6 to $12. And that’s because of the introduction of new smartphones equipped with a new operating system, as well as the company’s robust balance sheet.
Currently, the company has two very attractive smartphones, the Z10 and Q10, which boosted the company’s sales figures. The Z10 is a touch screen smartphone and was launched with the new OS, BB10. The phone’s success can be judged by the fact that its sale in the current quarter is expected to be around 4 million units.
The Q10 has revived the QWERTY look for which Research In Motion Ltd (NASDAQ:BBRY) has always stood apart. Since its launch just over a month ago, over a million Q10 phones have been sold. The number is attractive, as the phone was launched mid-way through the quarter, in a few countries, and only last week was it released in the United States.
Apart from phones, Research In Motion Ltd (NASDAQ:BBRY) also holds a portfolio of about 7,600 patents. These patents are estimated to be valued around $1 billion to $4 billion depending on the analyst. Scotiabank, being one of them, values the patents at $2.25 billion.
Aside from patents, the entire balance sheet looks very strong. The company’s net assets are worth $9.5 billion, which even exceeds its market cap of $7.4 billion. Its current liabilities are also well financed with a net working capital of $3.4 billion. Further, it has no debt on its balance sheet. So it appears as long as the phones sell, an investment in Research In Motion Ltd (NASDAQ:BBRY) appears safe from any big downside risk.
Secure enough for the President
Research In Motion Ltd (NASDAQ:BBRY)’s phones have been primarily known for the level of security they offer, which is evident from the fact that even President Obama uses it. It just needs to focus attention towards its enhanced security features to keep the enterprise and government employees attracted to its products.
BlackBerry needs to keep adding more products to maintain the momentum it has generated from the Z10 and Q10. And it’s set to release its A10, the company’s second flagship touch screen release this year and possibly another major sales driver.
Another revival in the making
Nokia Corporation (ADR) (NYSE:NOK) was once the global leader of the mobile industry with a 40% market share. But like Research In Motion Ltd (NASDAQ:BBRY), it too was late responding to the shift from feature phones to smartphones.
Lately, Nokia Corporation (ADR) (NYSE:NOK)’s Lumia series has gained momentum as it offers phones at almost every price range. Currently the company is focusing on a mid to low range Lumia 700, 600, and 500 series in the European and emerging markets. The company’s success is evident from the fact that it now has over 80% of the small but expanding Windows Phone market.
Lumia weak in the U.S.
Nokia Corporation (ADR) (NYSE:NOK) has not been able to gain share in the U.S. with its Lumia phones. In its attempt to better penetrate the U.S. it has been trying to add more carriers for its products. For the first six months of the model’s existence, it provided AT&T with exclusive access to the Lumia 920. Now it offers a slightly differentiated Lumia 928 and Lumia 925 to Verizon and T-Mobile.
In developed markets such as the U.S., carrier subsidies drive phone sales, which makes the relationship between Nokia Corporation (ADR) (NYSE:NOK) and the carriers very important for its future success. Further, if rumors are true, on July 11th the Finnish handset maker, has another launch event in which it might come up with a new device that promises to “reinvent zoom”.