Research In Motion ($RIMM) : Shipped is not equal sales

This post will not contain any chart reading. Rather, I am just going to raise one key point about RIMM.

There’s an open letter that has been going round the Internet. In it, the letter shed some insights, missteps and frustrations from within RIMM.

RIMM has a response to the open letter.

RIMM’s statement is fair; highlighting its zero debt, cash that the have etc.

However, I just want to remind RIMM about one point that they highlighted.

In fact, while growth has slowed in the US, RIM still shipped 13.2 million BlackBerry smartphones last quarter

RIMM continues to reinforce the strength of their balance sheet and amount of devices shipped.

Well, we have seen this in Nokia as well. And where did Nokia goes? Definitely still around. But, the share price is nothing to be proud of.

I tried Nokia’s E7 which is a fairly new phone and runs on the Symbian platform. As a smartphone, there’s nothing to shout about. In fact, it exposes the very key reason why consumers and developers are jumping to another platform.

Back to RIMM. What lessons can we learn from the above?

For a start, what we see in Nokia can definitely be applied to RIMM. In Nokia’s cace, I am getting the E7 for free. Somewhere, someone is trying to make sure the inventories do not get stuck in the channels. Just a few months back, this same phone would have required me to fork out a few hundred dollars.

On top of this, we also have Palm as a case study. Palm too has shipment figures. But, that does not translate to sales.

While RIMM is still able to milk the entreprises on the BES licensing fees. This is not a strong proposition. It is a great cashflow but the growth may not be there anymore.

Look at iPad. Intercontinental Exchange Ltd (ICE) has already developed apps for it. That means financial institutes are going to encourage their traders to start using the platform. And this is just one case. I am sure there are others that have not been highlighted.

RIMM, NOK, GRMN belongs to the same group. They need to know that It is not the wins but the losses that shows your weakness.

Note:

I have PUT options on RIMM and have intention to establish new positions if the chart suggest so.

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iam802

Trend trading with Ichimoku