I have kicked around adding RIMM to my portfolio a couple of times in the past. First and foremost, in general, I use the products of the companies I own and conversely I own alot of the companies I use. eBay is one notable exception, despite the fact that its where I derive nearly 80% of my income, I couldnt be more bearish on that company's outlook, stock or future if I tried. The other exception is in cases of companies that do something innvoative or are otherwise valueable. I like GE, but I don't own a nuclear reactor or locomotive (but I do have lots of their curly lights at work in my home).
As for RIMM, I am the proud owner of a Sprint Blackberry 8830 World Edition Smartphone. The phone performs well, I like the phone. I have used it internationally in Canada, Mexico and Argentina and not having to rent a phone in every country is a nice thing. Of course, there are problems but I think alot of those have more to do with Sprint than with Blackberry. So as a more or less satisified customer, Blackberry fits with my strategy.
One of the things I remind myself of when I get ready to add RIMM to my portfolio is that this is a changing game. It used to be that if you wanted a phone that could "do" anything, you had two choices: Blackberry or Palm. Thats it. It was a two player game. Just like shipping once was. You had UPS or the USPS for ground packages. Now, you have UPS, FedEx, DHL, USPS and a host of small regional carrier like LoneStar Overnight (serving Oklahoma, Texas and parts of Louisiana). Just like shipping has changed, phones have changed alot too. For starters, there are far more than two options even if we exclude the more obscure options. In just the last couple of years, we have seen offerings from Apple and Samsung of phones that "do things". Its no longer a cozy two player game anymore.
Now, cellular customers are usually under contract. Most people wait until thier contracts are up to get new phones because doing it any other way, is well, nutty.Most of these contracts are 1 to 3 years in duration, with the average being 2 years. So lets say some new little company started today and offered a killer phone that put all RIMM offerings to shame. We - the investors - may not see any noticeable changes for quite awhile because customers who are tied into a contract will wait to switch from RIMM to the new competitor. I think this delayed effect is important to keep in mind when deciciding on whether to buy in. Things look great now, but how will they look in the future?
So how many people are tossing thier Black Berrys for iPhones or Instincts? Who knows. We do know Apple is selling lots of iPhones and I suspect Samsung is selling plenty of Instincts if the constant yammering I hear from Sprint about them is any indicator. In summary, I think RIMM was a definite smart play in the past. They clearly have a dominate market position for now. How long will it last? What effect are these other offerings having? One place where competitors could start to hurt RIMM and steal marketshare is price. Black Berries are expensive and I think there is plenty of room for someone to come in and undercut them.
So thats my thoughts. For now, I am not buying into RIMM until I can see what if any effect these new offerings have had on the company. Share your thoughts on this.