RIM on a high



Much to the chagrin of competitors such as Nokia and Motorola, Research in Motion is firing on all cylinders. The highly publicized patent infringement fight between RIM and NTP is clearly behind the company. Last week, Goldman Sachs raised its price target on the company to $295, and the company saw its stock rise to its all-time highest level. (The stock closed at $81.86 on Friday.)

Goldman Sachs cites strong sales in the U.S. consumer retail space and international markets. The firm notes that its store checks don't capture activity in large corporate accounts, but that the bread-and-butter segment keeps growing for RIM. ABI Research recently noted that RIM has successfully crossed over into the consumer market with handsets such as the Pearl, allowing it to claim 44 percent of the consumer market. A year ago, RIM had 33 percent of the market.

That's not good news for competitors that have been desperately trying to tap into the push-email market. Push-email is a key application for a wireless wide-area data systems in the enterprise and for prosumers. And CrackBerry addicts abound.

I remember in 2005 when analysts predicted the end of BlackBerry's domination given the fact that a host of push-email providers entered the market. We've also seen a host of devices such as the Motorola Q that claimed to be BlackBerry killers. So far, none have come close to toppling RIM. Motorola, for instance, has responded by purchasing Good Technology, but faces integrating Good into its hardware division amid tough times for its handset division. Nokia bought middleware provider Intellisync in late 2005, but hasn't gotten the traction it should have from the purchase.

Goldman Sachs predicts that RIM, with just 2 percent market share, will generate a larger part of the industry EBITDA than Motorola's handset business by 2009. Its 12-month price target of $295 implies that RIM will grow to $55 billion market capitalization from $41 billion today compared with Motorola's current market cap of $37 billion. The prospects are good for the long-term. The market for push-email still has a long way to go since mobilized email adoption is still in the single digits, and it appears the consumer market is ripe and isn't diluting any of RIM's financial results, like analysts had feared. Can anyone slow down the BlackBerry train? -Lynnette

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