As I’ve written in the past, mobile devices ARE growth.
The hard part – for investors – is figuring out which ones. Back in the 80s and 90s there was more than one operating system, after all, but Windows ended up owning everything. There are real and good reasons why a single OS is best for most applications. It makes it easier for people to move between locations and platforms and speeds up the learning curve in new situations.
But does that apply to the current mobile device revolution? I don’t think so. Yes, there is a burgeoning supply of different smartphones out there, but a smartphone is largely a unique user experience. A person might become loyal to one brand or system without ever needing to deal with the others. As long as certain cross-connection functionality – voice communication, email, texting – remains compatible, having different systems isn’t painful to society.
Which brings me to Research In Motion Ltd (NASDAQ:BBRY) and the Z10. Pretty much given up for dead, people seem to forget that BlackBerry was the first true smartphone to dominate the business community. Sure, it fell on hard times, but for a while a businessman without a Research In Motion BlackBerry was thought to be on the way out.
Now the firm is getting a lot of traction with Research In Motion Ltd (NASDAQ:BBRY)’s Z10 and might well be a strong contender in the smartphone wars. It’s signing up large corporate customers and rolling out the new device across various countries to a positive initial reception. Investors are seeing success, too. Since it hit a trough last September, the firm’s shares have grown 119.50%. Mind you, that’s speculative buying, because the firm still has a lot of catch-up to do. Still, a Q1 net margin of 3.51% isn’t bad, all things considered.
We’re Not Alone In Here, It’s Scary
The biggest concern Research In Motion Ltd (NASDAQ:BBRY) has is the fact that it needs to gain market share against two immensely strong rivals. The most iconic of which is Apple Inc. (NASDAQ:AAPL). Fighting Apple Inc. (NASDAQ:AAPL) and the dominance of the iPhone isn’t a task taken on lightly. Apple’s recent stock slide – down 14% just in the last month – isn’t indicative of any decline in the iPhone’s sales. The company still makes good products and profits and investors shouldn’t be abandoning it.
The other is trickier in Google Inc (NASDAQ:GOOG). While not a direct competitor in hardware sales – mostly – Google Inc (NASDAQ:GOOG)’s Android operating system powers a lot of phones that Research In Motion Ltd (NASDAQ:BBRY) needs to knock off to gain market share. Not a happy thing to be in the way of a firm that might break through the $1,000 per share barrier in the next year or so. Google Inc (NASDAQ:GOOG)’s profitable (21.50% in 2012), muscular and, with EPS of 24.63, not terribly overvalued.