Its quite ironic that RIMM (Nasdaq: RIMM - 168.00) will be reporting earnings the day prior to the release of the iPhone. For all those who do not know, RIMM is the maker of the ever popular Blackberry smartphone/PDA. With all the hype surrounding the iPhone, the market will be looking on their earnings like a rabid dog. One hint of a chink in its armor and RIMM may be taken to the cleaners. RIMM is sitting almost at its 52wk high and what a ride it has been. I am not one to enter a position a couple days before earnings (especially with an impending Fed Meeting on Wednesday — same day as earnings), so I would sit on the sidelines and wait for a pullback. If nothing happens, well I will just have to pass. I have seen some earnings massacres and they can get pretty brutal. Heck, I would NOT be surprised if RIMM printed $154.00 (providing it doesn’t live up to the street’s gargantuan expectations). If it breaks that level, then the $130’s could be in the cards.

The stock has been on earnings run with momentum traders and day traders riding the wave along with the more long term traders. These shorter term traders will be looking for ANY reason to sell, whether the news is good or bad. They may decide to hold IF the news is so overwhelmingly good, it pays to hold on. But if they decide to cash in and drive the price down (“sell on the news” activity), I would be willing to put a position on, providing that the earnings warrants the buy.

Apple is aiming for the retail consumer market with its first iteration of the iPhone. I don’t think this will cut deeply into RIMMs marketshare as their primary focus is business customers. Of late, RIMM has been trying to penetrate the retail consumer market with phones such as the Blackberry Pearl and the Curve. If anything, the appeal and hype of Apple’s iPhone may drive many retail consumers to the smartphone market and when they look at choices, they may decide to go with a Blackberry instead…after all, the iPhone isn’t exactly cheap at $499 to $599. Based on this reasoning, there is still credible danger to RIMM if the iPhone’s price dropped to $299. But before that happens, I feel there will be a drive to newer more feature laiden/affordable products to combat the iPhone. RIMM is the type of company that will rise to the challenge.



Some analysts are very positive on RIMM, with Lehman issuing a $175.00 price target. This morning, a $210.00 price target was thrown out by UBS. They expect results to come in at/above higher end of guidance. Price target’s even go as high as $240.00, courtesy of Goldman.



My take, lets take a wait and see approach with this one!

Disclaimer: I have no position in RIMM stock as of the posting date of this article. This post is merely to present an idea and not to try to persuade you to buy/sell any security within. Please do your own Due Diligence BEFORE making any trades. 

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