Corner of Berkshire & Fairfax Message Board

I first got interested in RIM when it got whacked back in Sept. It appears FFH purchased 2 million shares right around this time. RIM just looks incredibly cheap. Further, RIM's death (due to Apple/Android Op System) appear to me to be a little premature and I am surprised with how aggressive the sell side has been in trying to take down RIM. Should RIM continue to post decent results we could see quite the short squeeze... (this one kind of reminds me of FFH).

RIM Share Price (CAN$) = $61.70
2010 Est EPS = $6.32
PE = 9.8
2011 Est EPS = $7.15 (RBC est excluding PlayBook)
Forward PE = 8.6

Major strengths appear to be business market and international markets. They also have a very strong new product pipeline (PlayBook coming in March/April). Their free cash flow is huge, that have already maxed out their share repurchase program and they are sitting with $2.5 billion in cash and they have no long term debt. Major weakness is not growing as fast in North America due to Apple and Android devices.

Essentially Mr Market is of the opinion that Apple/Android Op System have already struck their death blow and RIM is doomed. Listening to the RIM conference call my read is the company feels their market opportunities are exploding (geographic and product), they have a great product portfolio (with many new products) and rapid sales and profit growth will continue in 2011 and beyond.

I have followed RIM for years and been in and out for short trading stints.  There is alot to like and alot not too like.  I understand fully the thesis of Cramer and others. 

Major negatives:
- moved from being the innovator to playing catch-up.  I own a 1,5 year old BB curve and the I-phone of similar vintage is a much better device in my opinion. 
- data costs - they are trying to sell the playbook as BB network compatible -unless they bring the price of data way down I am not biting.  The competition in this space is huge and pricing is going to come down real quick.  Side bar comment on this re: Apple.  they are going to bring down the price of the I-pad and their own profits will get squeezed.  Savvy consumers can buy a netbook for way cheaper than either of these devices.
- lots of free cash flow - heard of Dell?
- Playbook - I think they are too late to make a major profit on the device

Positives:
- Secure network - As long as they keep this up they should be able to keep their gov't and corp customers even with weaker devices.
- Management - tough as nails and used to being the underdog. A tech innovator from Canada? 
- Ubiquity of BB - Obama uses one;

All in all it is a better value at < 50/share when FFH bought and I bought - I have since sold at about BE - other better deals.

Despite the continual bashing of RIMM (RIM.TO) by Americans, they seem to offer a whole lot of upside for not too much downside.  One view (perhaps optimistic) is that RIM is on the cusp of a transition from a smartphone company to a computer hardware/software provider, with their Playbook tablet appearing to be much stronger than first believed.  I have voted with my wallet on this one now (the stock that is -- their tablet is not available for a few months yet). 

Yeah, I'd like to see it too. After using the Kindle, I'm more open to the idea of a 7-inch tablet.

Does there have to be a single 'winner' in wireless? The space is also evolving rapidly (look at where tablets were a year ago and where they will be a year from now). My read is RIMM will continue to grow its brand well enough (global focus with solid line extensions like Playbook) that it should continue to do well and grow their top and bottom line by double digits for the near future. Should this happen, the stock is grossly undervalued. Yes they have issues (they are not growing as fast in North America). I just see a market that is big enough and growing so fast that there is ample room for a number of players to do well.

Does there have to be a single 'winner' in wireless? The space is also evolving rapidly

This is correct but as the market consolidates, market will consolidate around three players. Who remembers "Packard Bell" and "Gateway"? The question is who will be the "Packard Bell" and "Gateway" in the mobile space? Will that be Nokia or will that be RIMM?

Apple, Android, Windows?

I think Windows is the wildcard and may end up surprising us.