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.

Garmin is one of those. I was looking for a short entry it as it consolidates over the few days with a possible resistance level at around $28.50 to $29

My trade plan is to enter if it breaks the support as identified on the chart at around $28.

The saving grace for me is, the setup did not materialise.

Garmin was up yesterday on the open and went on to break resistance and surge higher.

If there’s a lesson for this trade that did not materialise, it will be :

No Setup. No Trade

Garmin continues on its bearish move since my May’s post.

With the downward trend so strong, I won’t be surprised if GRMN will go below $15 soon.

Will the average user be buying a smartphone from Garmin? Or will they choose from Apple, Motorola, Samsung, Nokia, BlackBerry etc.

What will be the catalyst for it to rise?

Among the typical M&A, going private etc. In fact, I am thinking about possibility of RIMM acquiring GRMN.

This is really a stretch on my imagination here as I do not know whether RIMM has a comprehensive mapping services.

I do know that they have some geolocation services testing via this post

At the same time, if RIMM succeed with their own mapping services, it is also possible for them to kill GRMN’s core business through their deals with automotive.

On the Ichimoku chart, we have a few indicators aligned for a bearish trade.

1. Bearish Tenkan sen – Kijun sen cross

2.Gap down on earnings

3. Break below kumo support

I will be looking for a Vertical Credit Call for this.

With the gap up, GRMN is now above the kumo with the Chikou Span (highlighted in yellow) having pierce through the resistance levels.

On top of that, both the Tenkan sen and Kijun sen is now pointing upwards; a possible indication of a new bullish trend after its dismal drop last year.