Lastly, Research In Motion Ltd (NASDAQ:BBRY) has a very strong financial position with a huge amount of cash on its balance sheet. Several analysts are of the opinion that Research In Motion is in a better situation, compared to several of its peers, when it comes to financial leverage. The company can use its abundant cash to fuel much-needed research and development and also to promote its new platform. Looking at Samsung, we can say that’s clearly not a bad idea. Samsung made its way to the top by relying hugely on its marketing muscle (other than making some really quality products), which spent huge amounts to make the Galaxy devices popular and omnipresent.
Beating the app problem
While some may feel that the platform stands little chance against iOS and Android, primarily due to lack of apps, I feel the logic isn’t strong enough. It’s true that not all popular apps are available on the BB10 at the moment, but the question is, how many apps do people use on a regular basis? BB10 may not support Instagram and Netflix, but it already supports several other top-used apps like Facebook, Tweeter, Google maps, Whatsapp, and many more. I feel these are enough to keep socially active users engaged and interested.
Furthermore, Research In Motion Ltd (NASDAQ:BBRY) doesn’t serve the U.S. alone. So, while U.S. users may miss Netflix, users from the rest of the world won’t be bothered by the inclusion or the exclusion of the app. Again, Netflix not being available may just be a temporary problem until the company and the developer works out a solution.
Final thoughts
Over the past few weeks since the Z10 was launched, there have been huge changes in the investor’s perception, and even analysts and industry experts are expecting better from Research In Motion now. Morgan Stanley now has a price target of $22 for Research In Motion, up from its previous target of $10, and this represents a 49.7% rise over the current price of $14.7 (as of this writing). Morgan Stanley believes that the shift to BB10 will lift Research In Motion Ltd (NASDAQ:BBRY)’s gross margin to 33% in February, up from 31.6% in November 2012, and also expects BB10 to reach the break-even point in its fiscal fourth quarter of 2015.
So, I’m clearly not the only person who feels positively about this stock. All of Wall Street is now looking forward to the company’s fiscal 2014 first-quarter earnings release, which is three months away, since that would also include U.S. and worldwide sales numbers for the Z10 and Q10. I’ve already outlined factors that I believe are going to help Research In Motion Ltd (NASDAQ:BBRY) get through its rough patch, and I feel investors can benefit from this present opportunity, as now would be a great time to initiate or add to your positions in Research In Motion.
Rahul Chattaraj has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.
