Smartphone battle: Apple(AAPL) – Research in Motion (RIMM)

By: ispeculatornew
Date posted: 05.18.2009 (5:00 am) | Write a Comment  (3 Comments)

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storm_iphoneHere at IS, we have discussed the battle between RIM’s Blackberry and Apple’s Iphone very often discussing the implications of RIMM’s new apps world in the battle. There is no doubt, the smartphone battle is one that will not be won in 2009, but as Apple gains more market share, it will start to put more pressure on RIM as it goes after the “corporate market”. Right now, Apple is clearly the player for consumers while Blackberry is the choice for businesses. The winner will be the one that can gain momentum and market share in its competitor’s space. Right now, both look very solid in their segments.

If we look more in depth at their opportunities, RIMM certainly looks to be in a prime position, having a clearly defined business phone, that is very reliable, has more battery life and has already penetrated the markets in most major corporations around the world making the change to another company very costly and complicated, especially when the Blackberry continues to be up to expectations. On the other hand, the Blackberry had had a tougher time getting market share in the consumers business as its design is not as attractive and its applications far below the level offered by Apple. RIMM launched the Blackberry Storm a few months ago to try gain back some share but it has been seen as not much more than a cheaper version of the Iphone which few have settled for.

Apple on the other hand has been gaining a lot of momentum among consumers and to a certain extent has been getting some business with smaller businesses. But it has not been able to go after big corporate clients so far, its phone being seen more as fun than as business. Apple has not really spoken about plans to change that so we have to assume that for now, they are happy with the very large consumer business where they have been mostly unchallenged so far.

The implications are very interesting though from a trading perspective. While Apple does have a computer and an ipod business, its growing business and reliance on the Iphone makes the trade on RIMM vs AAPL an increasingly interesting trade.

Our partner InoTV made an interesting analysis (you can see their free video here) and they consider Apple cheap compared to RIMM and thus they recommend going long Apple against RIMM, considering this pair trade a low risk trade with good expectations for return.

Again, we recommend seeing the InoTV video on this trade here🙂

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3 Comments

  1. Comment by OneDay — May 19, 2009 @ 7:38 am

    Great video. I am not familiar with Fibonacci retracement, but will definitely check this out.

    I personally own a BB Curve and I am totally addicted!! Hey, according to market researchers at The NPD Group, the BlackBerry Curve outsold Apple’s iPhone in the first quarter of 2009. No comments from Apple and RIM.

    It’s an exciting battle and we will see who’s going to win!

  2. Comment by Amey — May 19, 2009 @ 12:12 pm

    No secret that I am an Apple fan, but the one big thing, I have noticed and you also alluded to, that seems to be holding Apple back from just demolishing all competition for both computers and smart phones is that they are not being accepted by businesses. Obviously there are many reasons for this (unfamiliarity, Windows, network compatibility, etc), but do you agree that the lack of corporate acceptance is the only major thing holding Apple back? Will it ever creep its way into the corporate world?

  3. Comment by IS — June 2, 2009 @ 9:02 pm

    Yes, I do agree, I do think it will be difficult to change though because “going corporate” would be kind of a contradiction with what they stand for; fun, style, image, etc. It’s not an easy path to reach both roads at the same time, if they pull this off, it would mean big big money, no doubt…

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