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RIMM: Another Nail in the Coffin

This morning (Friday Feb 11, 2011 that is) Microsoft and Nokia announced a broad strategic partnership.  Nokia will start supporting the Windows Phone mobile operating system as its principal smart phone strategy.

Under the proposed partnership:

- Nokia would adopt Windows Phone as its principal smartphone strategy, innovating on top of the platform in areas such as imaging, where Nokia is a market leader.

- Nokia would help drive the future of Windows Phone. Nokia would contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments and geographies.

- Nokia and Microsoft would closely collaborate on joint marketing initiatives and a shared development roadmap to align on the future evolution of mobile products.

- Bing would power Nokia’s search services across Nokia devices and services, giving customers access to Bing’s next generation search capabilities. Microsoft adCenter would provide search advertising services on Nokia’s line of devices and services.

- Nokia Maps would be a core part of Microsoft’s mapping services. For example, Maps would be integrated with Microsoft’s Bing search engine and adCenter advertising platform to form a unique local search and advertising experience

- Nokia’s extensive operator billing agreements would make it easier for consumers to purchase Nokia Windows Phone services in countries where credit-card use is low.

- Microsoft development tools would be used to create applications to run on Nokia Windows Phones, allowing developers to easily leverage the ecosystem’s global reach.

- Nokia’s content and application store would be integrated with Microsoft Marketplace for a more compelling consumer experience.

What does this mean for RIMM you may ask?  Well it definitely doesn’t bode well for the company.

1) For those that have been expecting Microsoft to buy RIMM this is another obstacle for them.  Microsoft is very acquisition shy as they prefer to do strategic partnerships over outright takeovers realizing the inevitable issues with antitrust reviews and integrating acquisitions.  Now that MSFT is teaming up with NOK, it is even more unlikely to buy RIMM as they are obviously trying to figure out ways to grow Windows Mobile.  Also, note that NOK’s market cap is very similar to RIMM’s and yet MSFT still chose to do a partnership.

2) Microsoft is clearly not giving up in Windows mobile.  May RIMM advocates have said that MSFT will just give up on its mobile strategy and buy RIMM.  This is now clearly not the case.

3) NOK has the largest mobile phone market share in the world.  MSFT saw this and also saw NOK struggling with the development of a workable and user-friendly operating system and saw an opportunity  to grab market share.  If this succeeds it will only strengthen Windows Mobile which will make things even more difficult for RIMM as it becomes even more marginalized.

4) A reorganized NOK will be a tough competitor internationally for RIMM.  Lately, RIMM’s US sales and market share have been declining.  However, emerging markets have been a bright spot for the company where they have been growing sales and market share largely as a result of the mess that NOK has put themselves in.  Now that Stephen Elop (a former Microsoft employee) is at the helm and is reorganizing NOK’s mobile strategy around Windows Mobile they will likely become a much stronger competitor for RIMM.  If anything, it will cause people to wait and see what NOK will come up with from the is partnership thereby negatively impacting the one brightspot for RIMM.

The partnership is another nail in the coffin for RIMM.  You have been warned.

Microsoft and Nokia alliance will hurt RIMM

Farewell Apple

Farewell Apple

sooo…the Verizon iPhone went on sale today!!! *Yippee!* Aren’t you just so EXCITED?!!!…(yea, me neither.)

My excitement has now turned into sheer disappointment and I am retiring from further blogs and/or camtasia’s relating to it. I’ve waited so very long for this one moment, and now that it’s here, I’m truly uninterested. I give them a *BBM talk-to-the-hand-smiley-face* for all you Blackberry/RIMM users.

Anywho, it doesnt look like I’m the only one uninterested in the VZ iPhone as news reports stated the lack of people waiting on-line for the phone in stores today. This could, however, be the result of the phone’s pre-sales for current Verizon customers which began last week.

This news might have still affected AAPL as the stock closed over 4 dollars lower than its open, falling 122 basis points from yesterday’s close.

Verizon, on the other hand, did not result in as much of a drastic change as it closed 1 cent lower than its open and 3 basis points lower than yesterday’s close.

With all of that said, I’m now off to my nearest Verizon store to check out the new iPhone. However, I do assure you, I won’t be walking away with one tonight-nor in the near future.

Is technology getting too creepy?

Everyone loves the new additions and progression of technology that has happened over the last couple years. Facebook, twitter, BBM, all of Apple’s new gadgets, etc only to name a few. With me, I wasn’t too excited for the Blackberry, it was only a year ago that I jumped on the Blackberry bandwagon but now I’m addicted. I love the BBM app where my friends and I constantly IM each other back and forth and can see if the message was read or delivered. At first I thought of it as a confirmation that the message was delivered but then I started to question, wait why isn’t she answering.. she just read the message. That’s where the creepiness/ stalkerish part I am talking about comes into play.

Now, there is Ichat and for PC users Skype. It’s the most convenient application to talk and see your friends or family that may be over seas or in another state. Going to school in Florida, I definitely took advantage of it. But now, there is the app on iPhones or Itouch’s called “FaceTime”. This takes stalkerish to a new level. Wherever you are, you can click start and video chat with any other FaceTime user. It can be convienent, for example, you can show your facetimer where your sitting at a concert or game; or creepy. Let’s say your boyfriend doesn’t believe where you are, he can just FaceTime you and get the actual answer.

Get you that Iphone4, FaceTime

This advancement of technology, I feel, is taking the actual interaction with people out of the equation. There have been studies done that show teenagers and college students are so involved with their laptop and technology they forget how to interact with people in person. Even the Catholic church is following the trend by allowing confessions via IPhone. Kind of absurd…

Today with the release of the IPhone for Verizon many are switching over for the better service and overly simplified phone. Apple expects to sell one million more in this quarter and it is going to be interesting to see how this effects other technology companies. Even rappers like Fabolous are talking about the IPhone. Yesterday, HP unvelied their palm based, pre3 which will compete with the IPad while Lenovo has talks about coming out with the LePhone and LePad. Let’s see how this all unfolds..

Top Acquisition/Take Over Target for 2011 - Hedge Fund Live CEO Picks

Last week I spent some time blogging about Morningstar’s top ten take out picks for 2011 and while I’m sure the community enjoyed my disseminating of Morningstar’s hard work I figured I should start blogging about Hedge Fund LIVE’s top take out picks for 2011.  For this blog I sat down with Hedge Fund LIVE’s CEO Jeremy Frommer to ask him who he thought were the top take out targets in 2011.

Jeremy is always on top of the chatter on the Street, so he started off by mentioning some of the run of the mill rumor names.
JF first started talking about how Massey Energy (MEE) is likely to be taken out in the net week or so and he could see consolidation in throughout the materials sector throughout the year.  JF felt IPI, CF, MOS, and POT could all be targets.
JF also said he could see larger tech names taking out new up and coming cloud names before their market caps become inflated.  (VZ issued a bi for TMRK Thursday afternoon and the majority of the cloud names had a bid to them in a brutal tape Friday)  JF’s favorite take out targets in the cloud/virtualization space are Citrix Systems (CTXS), Akamai (AKAM), and Rackspace (RAX).

After Jeremy went through the motions of telling me about the rumors everyone on the street is looking at he started to get a bit bold.
Jeremy Frommer’s top take out target’s for 2011
Morgan Stanely (MS): I’ve been covering M&A rumors since I’ve been at HedgeFundLIVE and the only time I have heard MS mentioned is from our CEO Jeremy Frommer.  JF thinks we will see a foreign bank take out MS in the coming year.  I know one name that came up on the desk was Nomura (NMR).  For those of you unfamiliar with Nomura it is a financial services company based in Japan.  While Nomura is a wild card to take out MS with a $21 billion market cap versus Morgan Stanely’s $40 billion market cap anything is possible.
Some other picks from JF to take out MS: CS, DB, UBS, and RBS.
Research in Motion (RIMM):  JF is a RIMM bull and believes they will be taken out by Microsoft (MSFT) in the next year.  Microsoft continues to struggle finding any success in the smart phone industry and RIMM continues to lose value with the new competition.

Google’s Android and Apple’s iPhone has been taking market share from RIMM quarter after quarter as RIMM struggles to come out with anything fresh.  As a result RIMM’s market cap has been cut in more half since the highs in ’08 and JF believes it is only a matter of time till MSFT sees value.  The MSFT for RIMM rumor only hit the tape once in 2010, JF expects to see a halt in 2011 and while some on the ddesk expect that halt to be a result of RIMM lowering their guidance JF expects that halt to come with a MSFT/RIMM Press Release.
For the bearish view on RIMM please take a look at Dean Machado’s highly controversial blog, RIMM and the Boy Genius.
After two bold picks the CEO he got back to the basics.  JF expects that the LBO chatter that has been ever-present in the supermarket industry over the last few years will finally materialize.  JF thinks it will Supervalu (SVU) that gets picked up first.  After discussing his long postion in SVU JF went on to talk about consolidation, this time in the homebuilders.
Overall, JF likes the best of bread names like RYL and LEN but advises buying a basket of homebuilders including: BZH, DHI, HOV, KBH, and PHM.

Now you know why he thought the Kin would be a winner.

RIMM and the Boy Genius

RIMM is clearly running out of bullets.  First, RBC puts out a report saying that RIMM will sell, was it six million Playbooks this year.  Hmmmm, lets see, isn’t RBC based in Canada?  Isn’t RIMM based in Canada?  Does RBC want banking business from RIMM?  Does RIMM management want their stock price to rise.  Too cozy for my taste.  Also, how the HELL does the RBC analyst know how many Playbooks will sell this year.  Nobody does!  What we do know is that there is a shit load of tablet competition currently out there and there is more coming down the pike.  RIMM hasn’t even been able to develop an innovative and desirable touchscreen smartphone so what makes you think they will be suddenly able to do so with a tablet that was announced six months ago and still hasn’t seen the light of day.

Anyway, that brings me to my next and final point.  Why did RIMM rally today?  Well, there was a report on Boy Genius that RIMM was considering allowing its smartphones and other devices to run Android apps.  From BGR:

As crazy as that sounds, we have been told by multiple trusted sources that RIM is seriously considering a feature that will allow BlackBerry devices to run Android apps. Here is what we know… Research In Motion has been trying to figure out the path it wants to take as far as how the existing Java environment will work on its upcoming QNX tablet and smartphones. The company has publicly stated that it is looking at getting a Java virtual machine running on the PlayBook  — not so much for app development going forward, but for legacy support, custom apps corporations have deployed and don’t want to recreate, etc — but RIM hasn’t yet decided what kind of Java VM it will use. Hit the break for the rest! Here is the big news: we have been told RIM is very much considering the Dalvik virtual machine, and we ultimately expect the company to chose Dalvik. If that sounds familiar to you, it’s because it’s the same VM that the Android OS uses, and it would allow RIM’s PlayBook and other QNX devices to run just about any application built for the Android platform.

There are various approaches to this situation — one where RIM uses the open source Dalvik VM and does not involve Google, and another (incredible) scenario where RIM and Google might reach an agreement (basically “certify” the device/platform) that would provide official support to Android apps on RIM’s QNX-based OS, and would feature the Android Market, Google’s Gmail, Maps, and other apps.

With the bold moves RIM has taken lately — QNX, the acquisition of the great UI team at The Astonishing Tribe, and possibly the ability to run any and all Android apps — if the company can hang on just a little longer, it could be poised to attack the market again in a huge way.

Make of it what you will.  This was one of my concerns being short the stock.  Now that the first test of the news is out and RIMM could only muster a small rally in a big up tape I am less concerned.  As a matter of fact, I think the possibility that RIMM is considering using a virtual machine to run Android apps (which will probably require some level of rooting to be done anyway) is a testimony to the epic failure of the company’s R&D department and its quest to develop the next big thing to allow it to compete with Apple and Android.  I guess if you can’t beat um, join um.

You’re running out of bullets RIMM, I guess the next thing will be “chatter” of a takeover by Microsoft.

RIMM: The water is turbulent

RIMM is trading up 2% after hours after reports revenues were up 9% from Q2 and 40% from the year-earlier period, at $5.49 billion and EPS was $1.74. Analysts had been looking for $5.4 billion and $1.65 in EPS.  Gross Margin came in better than expected at 43.6%, versus a forecast of 42%.

For Q4, the company forecast EPS of $1.74 to $1.80, versus $1.61 expected, on revenue of $5.5 billion to $5.7 billion, versus $5.46 billion expected.

Subscriptions were on the low side of the company’s expectations, adding 5.1 million new BlackBerry users, versus a forecast of 5 - 5.4 million. Shipments of BlackBerry devices in the quarter were 14.2 million units, which is about in line with estimates.

Average Selling Price (ASP) came in at $315, in line with the street.

Lets quickly move on from the numbers cause who really cares, the fact is RIMM has some serious competition and with the stock trading at roughly 10.8 times forward earnings it seems the street is well aware of slowing growth over the next years.  Check out this article:  What’s really wrong with Blackberry.  The story for this quarter was Jim Basillie’s rant during the RIMM conference call.

Just a little background on Balsille, for years he has been telling the public and investors that everything is “AWESOME” and there product line is way ahead of the competition.  As everyone knows RIMM hasn’t produced shit over the last few years while HTC, Apple, and Motorola have stepped up.  So, today a JPM analyst asked Balsillie how RIMM expects to stay competitive with Apple and Google.  Balsillie’s response was that RIMM is “way ahead” of Apple and Google especially with the Playbook which will be out next quarter.

Here’s his word for word comments on the Playbook

“I think the PlayBook redefines what a tablet should do. I think we’ve articulated some elements of it, and I think this idea of a proprietary SDK and unnecessary apps — though there’s a huge role for apps — I think is going to shift in the market, and I think it’s going to shift very, very quickly. And I think there’s going to be a strong appetite for web fidelity and tool familiarity. And I think there’s going to be a rapid desire for high performance. And I think we’re way ahead on that. And I think CIO friendliness, we’re way ahead on that.”

Sounds like Jim is betting that growth to his bottom line will come from a product that they couldn’t even get working into for the unveiling, pretty big joke as there is no way in hell a Canadian company can compete with Silicon Valley or Asia when it comes to technology.

Balsillie should focus his time on talking to bankers rather than bidding for NHL teams because  there’s a hole in this ship and the captain better act fast.

HMCS PlayBook

Ujjayi Breathing, My Self and My Ego - Wall Street Yogi: Day 2

Limit Order Trading - Breathe

Trading free of emotions is a cornerstone to a successful career as a trader. Impulsive decisions can be controlled through rigorous discipline and training. One must “Breathe Through” their trading. Predetermined trades must be thought through, entered, and patience practiced as one awaits execution of the trade. “In the moment trades” or reactive trades, still require some degree of “Pause”. The pause can be as simple as closing the eyes, deeply inhaling through the nose, hold the breath in for a 5 count, allowing fresh oxygen to flow to the brain. Exhale fully and slowly through the nose. Inhale again through the nose hold for a count of 5. Again

trade execution - a wall street yogi

exhale fully and slowly but this time through the mouth, Exhaling all emotion and negative energy. Reassess the trade. This entire process can take up to 30 seconds. Inexperienced unqualified traders might argue that by that point, by the end of the “Pause”, the trading opportunity has passed. They may be right about that particular trade, but they are definitely wrong in general. The error is on two fronts. First, more often than no, the trade will show itself again and allow one to take the opportunity again. Second, if “Breathing Through” is practiced consistently, than statistically you will have increased your odds of success. Any practice enforced on a consistent basis, any rule employed over time will, better one’s odds for success. An “Extended Breathe Through” is best suited for traders, prior to entering Limit or Algorithmic orders. During  an “Extended Breathe Through”one should take a moment to focus on the third eye. While continuously breathing through the nose (known as the Ujjayi breath), close your eyes and focus on the space between your eyes. The third eye is unique to the individual. My third eye, starts as a whirlwind of colors, as I look up into a cone with a small opening at its apex. As close to the apex I feel I am getting, it always feels out of reach. It is perhaps, vast “Emptiness” on the other side, and thus nothing awaits my efforts to make my way through. Perhaps “Everything” is just through that hole, just out of my reach. Perhaps “Everything” is actually seeing the vast “Emptiness” and understanding that everything is within you. Or perhaps “Emptiness” would be seeing that everything is out of your reach. Patience as I breathe my way through the apex. Once through though, the only thing I see is the view back to the bottom of the cone. I find myself looking inwards back at myself. Just as I made my way through the cone and expected to see “Everything”, I find it is nothing, yet I find nothing is “Everything”. I see my “Self” not my “Ego”. It was my ego that went looking for “Everything” but found nothing. It is my “Self” that looked for nothing and found “everything”. It is then that I turn to see all that is beyond the third eye as well as all that is not. I am ready for the trade. I am ready for the decision. I am ready.


News out that AT&T has slashed the price of the Research in Motion Torch as it plans to make room for three new Windows Phone 7 based devices as we head into the holiday season.   RIMM has had a nice rebound from the recent lows of 42.50 but failed to rally above the highs made the day the Torch was unveiled.

As you can see the black line is the high the day the Torch was unveiled and also a solid resistance level.  I know RIMM is a rumored take out stock but technically it is setting up for a nice short with a target of just above 50 and a stop above 57.25.

I know the Torch sells for under $100 at Amazon and Firefly but for AT&T to lower your price in order to make room for an unproven product, such as, Windows Phone 7 can’t be looked at positively.

95% Market Share?

Apple’s iPad currently controls 95% of the tablet market, but with Samsung, Dell, HPQ and others ready to put their tablets on the market competition is about to see quite the uptick.  Samsung is ready to release the 7-inch Galaxy Tab, which has been dubbed the iPad killer and with a 7 inch screen its right between the iPad and the 5 inch Dell streak which could give Samsung a competitive advantage as they enter the tablet market.

You would also expect to see a price war in the other tab’s as most will likely shy away from head to head competition with Apple.   Surprisingly, all price rumors I have heard on upcoming tabs have been similar to the price of the iPad.   With that said it will be very interesting to see how this play’s out over the year and how much market share Apple will lose due this surge in competition.

Who do you think will take the most of market share from the iPad?

Android takes lead in smartphone market share

In a recent study by NPD, the research group said that Google’s software was installed on 44 percent of mobile handsets sold in Q3, up 11 points since Q2. While that data may rile up Apple fans, Android’s gain seems to be primarily fueled by BlackBerry’s loss: Research in Motion lost six points in the last quarter, falling to 22 percent, while Apple’s iOS moved up one point, to 23 percent.

The year-over-year data shows a more dramatic drop in BlackBerry’s market share.