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.
Restart Upstart
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.
Choosing Your Targets
No, Research In Motion Ltd (NASDAQ:BBRY) can’t argue with those guys. Not yet, at least. But it can argue with Microsoft Corporation (NASDAQ:MSFT). This is the fight that fascinates me. Both companyies have stated that they plan to become the #3 smartphone in the world. However, there’s no space for ties there. Only one of the two can be #3, and Microsoft certainly has enough money to compete with Research In Motion for market share. The best thing Research In Motion has going for it is Microsoft Corporation (NASDAQ:MSFT)’s inexplicable hardware failures (not including the Xbox) over the years. While it’s done well with operating systems and other software, things like the Zune and earlier versions of smartphones haven’t exacting been strong movers.
However, there’s evidence that Microsoft Corporation (NASDAQ:MSFT) has gotten the message that relying on PC business isn’t a long-term success strategy anymore. That means the two are going to go at it, hammer and tongs, until one emerges as the winner.
So What To Do?
As an investment, Research In Motion Ltd (NASDAQ:BBRY) will be interesting for a while. I wouldn’t bet your entire retirement portfolio on it, but I think the early signs indicate that some of your medium-to-risky money should be placed on the company. There’s an enormous upside, whether Research In Motion takes off again and becomes a strong contender or whether another firm acquires it. Either way would be a significant win for investors.
The article BlackBerry Hot off the Post and Playing to (Sort of) Win originally appeared on Fool.com and is written by Nate Wooley.
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