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Research In Motion (RIMM)

Research In Motion (RIMM). By: Andrew Ticzon Andrew Lee Michael Kaufman. Company Profile . -Founded in 1984 and is headquartered in Waterlooo, Canada. Offices in North America, Europe, and Asia-Pacific. -RIMM listed in both Nasdaq Stock Market and Toronto Stock Exchange

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Research In Motion (RIMM)

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  1. Research In Motion (RIMM) By: Andrew Ticzon Andrew Lee Michael Kaufman

  2. Company Profile -Founded in 1984 and is headquartered in Waterlooo, Canada. Offices in North America, Europe, and Asia-Pacific. -RIMM listed in both Nasdaq Stock Market and Toronto Stock Exchange -Engages in the design, manufacture, and marketing of wireless solutions for the mobile communications market worldwide (provides platforms and solutions to email, phone, Internet, other applications) -Technology used allows for many third party developers and manufacturers to enhance their products and services -Portfolio contains: Popular Blackberry wireless platform, RIM Wireless Handhelds, software development tools, and others

  3. Company Profile (continued) • Features wireless devices, software, and services, as well as use use of personal information management functions (calendar, address book, etc.) • -Offers Blackberry Mobile Data System that allows users to get hold of data from enterprise applications and Internet • -Licenses BES software, and offers client access licenses, technical support, and upgrades • -Distributes products through wireless communications carriers or carrier partners

  4. Industry Outlook • Operates in the Diversified Communications Services sector = interacting with others through different physical methods. • Everyday importance of communication makes the desirability of this market very appealing. • Demand for these products and services should continue to rise with the development of new forms of technology. Supply should be able to meet the high rates of demand. • Market cap at $79B, approximately $46B ahead of Telecom Italia ($33.9B)

  5. Key Statistics • Nasdaq Ticker: RIMM • Stock Price: 138.60 • Market Cap: 77.98 • P/E Ratio: 61.37 • Forward P/E: 27.52 • Beta: 2.46 • 52 wk high: 144.50 • 52 wk low: 50.50 • Profit Margin: 21.53% • Operating Margin: 28.81% • Return on Assets: 25.51% • Return on Equity: 40.33% • PEG Ratio: 1.06 • Handheld devices accounted for 81% of Q4 2007 fiscal revenue

  6. Handheld Competitors Apple iphone Nokia N95 Motorola Q Palm Treo 750

  7. Product Blackberry Curve Blackberry 8800 Blackberry 8870 Blackberry Pearl

  8. Future Blackberry Line • Blackberry Bold • Expected release date: Summer 08 • Features • Half VGA (480x320) display (65,000 colors • 3G • Wi-fi • Blackberry Thunder • Expected Release Date: Q3 08 • Targeted towards more business minded customers in iphone market • Features: • Touch Screen • 3g • Wi-fi

  9. Technical process: • Past performance • Fundamental performance • Identifiable pattern • Historical volatility • ATR • Money Flows

  10. 6-month chart: • Identifiable patterns • RIMM vs. SPX or INDU • Money Flows/ATR • Convergence/Divergence • Fundamental news

  11. Strengths • Corporate leader in Smartphones • More businesses prefer the Blackberry to other devices because of advanced email capabilities • Blackberry • Most powerful brand in North American Smartphone market • Pearl, Curve, 8700, 8800 series smartphones • “Push” email • Functional technology • Email, Navigation (Blackberry maps), Wi-fi, ect. – Blackberry does what it does very well • “Crackberry” • Loyal customer base; more likely to purchase future Blackberry device again • RIM technology also enables a broad array of third party developers and manufacturers to enhance their products and services with wireless connectivity to data • Popularity of Blackberry and RIM’s email solutions have pushed companies like Palm and Motorola into much lesser roles in market

  12. Weaknesses • Blackberry line fails to impress “average” phone user • Models aimed at Corporate users • Curve and Pearl fail to compete with other multimedia based smartphones (i.e. iphone!) • Faulty trackball in current line of Blackberry’s • New models just released with same trackball • Dependence on Operators • RIM depends on operators to launch Blackberry service • Cost high for smaller operators • Emerging markets extremely important; if high cost, hard to capture • Strength of brand • Another line of smartphones would benefit company • Carriers would prefer to see another brand to give consumers more of a choice

  13. Opportunities • Importance of email in corporate world • Global growth • Expanding corporate world in developing countries will create demand for more smartphones (5/13/08: China Mobile will launch Blackberry handsets across country) • Possibility of iphone competitor • Creating a popular competitor to the iphone would hurt Apple, allow RIM to dominate corporate and average consumer market)

  14. Threats • Competitors • Apple – iphone • Large global companies developing better products to compete with Blackberry • Microsoft, Nokia • If an alternative email solution is considered to on the same level as RIM companies will have more choice; sales down

  15. Recommendation Long term buy: RIMM would be recommended as a long term buy due to the strong growth and dynamic of the company.

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