The invisible giant

Of all the themes I encountered during the the four years I spent researching my new book on BlackBerry, the most repetitive was this: Research In Motion has done fine, but it’s all over. Or, BlackBerry has done well but there’s a new rival on the scene that will end the device’s supremacy. A variation appears in today’s Globe and Mail in a piece written by Simon Avery, an able journalist who has been covering technology for more than a decade.

Today’s version of the thesis is that RIM’s technology is outdated and investors are shorting the stock, betting it will take a tumble. I’d like the shorts to be wrong, just because I don’t admire such investment styles, but there’s another reason: they may in fact be wrong.

First off, the article is based on the thinking of one lone analyst among the scores of analysts who follow RIM. For every naysayer, there are ten boosters who have a buy on the company.

But secondly, and more important, how realistic is any analyst’s prediction? In the summer of 2008, when RIM shares were at $140, an awful lot of analysts had targets of $200. Then came the global meltdown that everybody missed, RIM fell along with everyone else, bottomed out at $40, and has doubled since then.

No, the future is impossible to know, but we could pay attention to the present. The funny thing about all these articles – and there was another in the Sunday New York Times about the battle between Apple and Google over smartphone supremacy – is that RIM’s current success is not even mentioned.

The plain fact is that BlackBerry has 43 per cent of the smartphone market in North America, the iPhone is a distant second with less than half RIM’s numbers, and everyone else brings up the rear with 15 per cent or less. I can can only assume the New York Times had a “provincial” view of the sector and did not mention BlackBerry because it was a Canadian product. If you’re writing about the Apple-Google fight for second place, shouldn’t you mention the leader? BlackBerry didn’t get a nod in the article that stretched over three pages. But those market share numbers, which to my mind say it all, didn’t appear in the Canadian newspaper either.

RIM’s next quarterly financial report comes on March 31. We’ll know then whether the shorts have played the stock’s near-term price right or not. As for the future, that will take longer to unfold. Meanwhile, based on the exhaustive research I did for my book, I think RIM’s good for the long haul and will continue to hold on to top spot in market share.