Research In Motion Ltd (BBRY)’s Black Eye

Speaking of pricing, a big dilemma exists for the mobile device market. Believe it or not, it all ties in to Ben Bernake and his hint that he will begin to taper his monthly bond-buying program later this year. When the cheap money stops flowing, markets falter and companies cut costs — mostly employees. This vicious cycle ends up leading to a weakened consumer. When the consumer weakens, prices for products and services must be lowered — otherwise known as a deflationary environment.

Conclusion

The Z10 hasn’t led to increased market share, the Q10 will target a niche market, and the Q5 isn’t likely to be a big revenue driver. Research In Motion Ltd (NASDAQ:BBRY) is also taking a big risk by making its BlackBerry Messenger available to Apple and Google users. Furthermore, BlackBerry is trading at 43 times forward earnings — expectations are very high.

Even if BlackBerry manages to beat expectations for the quarter, it should only be a short-lived pop. BlackBerry’s revenue has declined over the past two years as well as 36% last quarter on a year over year basis. It would be difficult to imagine a scenario where BlackBerry improves the top line while fighting off its peers and a challenging macroeconomic environment.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Apple, Facebook Inc (NASDAQ:FB), and Google. The Motley Fool owns shares of Apple, Facebook, Google, and Microsoft Corporation (NASDAQ:MSFT). Dan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article BlackBerry’s Black Eye originally appeared on Fool.com and is written by Dan Moskowitz.

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