Muse.On-The.Net

A few years back Research in Motion (RIM) was in patent trouble and the future seemed dim.  While dominant in the business market for PDA devices (particularly for mobile email), it was possible their entire business model was at risk.  Once those troubles were behind them, RIM pushed into the smart phone consumer market with the Pearl mobile phone.  Why oh why didn’t I buy their stock back then?

RIM stock soared 12% to over $109 today on news that Q4 subscriber gains would be 20% higher than anticipated. Total subscribership sits near 14 million. “This is a massive testament to how good this company is,” said Canaccord Adams analyst Peter Misek in Toronto, who yesterday raised his rating to “buy” for the stock. “They saw no seasonal slowdown after the holidays, which is unheard of in the handset business.”

In fact, BlackBerry dominates sales of email phones with 41% of the market - this despite the hugely successful entry of the Apple iPhone (with 28%).

RIM has successfully transitioned from a largely business device to satisfy consumer interests.  New models include support for video and music players.  A slew of free mobile phone games are available for most BlackBerry models.  RIM’s timing has been right on.  Global smart-phone sales rose 72% last quarter to over 35 million devices, with U.S. sales tripling, according to English research firm, Canalys. That compares with a 13% increase for handsets over all.

I see a convergence of functionality as people are beginning to see the value in a ubiquitous hand-held device as manufacturers improve user interfaces and technology increasingly accelerates what can be done on a tiny device.  There will always be those who only want a cellular phone to make voice calls, but for others the more features the better.  RIM will need to continually improve to stay ahead of Apple, Nokia, and the other manufacturers, but today they are headed in the right direction.