samsung is getting shut out of market if they don't buy IDCC and counter sue apple soon
SEPTEMBER 6, 2011, 3:12 PM ET RIM: Samsung Troubles Already Helping OS 7, Says Scotia Nvidia Sees Tegra Growth In Q3, Says WSJBroadcom: No Hiring Freeze, Says CFO EMAILPRINTPERMALINK TWITTER
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Research in Motion (RIMM) shares have been a stand-out performer today, currently up 55 cents, or 1.8%, at $30.67 in a very poor market, following an upgrade this morning by Gus Papageorgiou of Scotia Capital, who raised his rating on the stock to Outperform from Sector Perform, and raised his price target $46 from a prior $35.60.
Papageorgiou sees RIM benefiting both from the introduction last month of new BlackBerrys based on “OS 7” software, and also from “ecosystem turbulence.”
On the latter score, Samsung Electronics (SSNLF) is “being eliminated in many markets by legal issues. ” Samsung’s second-place spot in smartphones (behind Apple (AAPL)) is in danger as the “Galaxy S” and “Galaxy S II” devices “will be blocked from European markets as of October 13th,” he writes, and the company’s “Galaxy Tab” tablet computer is being delayed in Australia and shut out of the German market because of suits by Apple.
The combination of new OS 7 models, and Samsung’s legal troubles, could not only stem subscriber losses for RIM in North America, but also help it take share in Europe and other overseas markets, Papgeorgiou thinks:
As RIM discovered with its case against NTP, the threat of legal action can often have a detrimental impact on sales. These initial victories for Apple do not bode well for Samsung especially in the European market where its market share has moved from 5.0% Q2 last year to 18.8% this year. In addition to these legal issues, we believe the BlackBerry Bold 9900 is already outselling the Samsung Galaxy S. Based on GSM Exchange’s website, which tracks the top 3 most actively traded devices in Europe, the Bold 9900 is now in the #2 position ahead of the Samsung Galaxy S II and behind the iPhone-4 16Gb.
He also thinks RIM has other cards up its sleeve. There is the forthcoming “QNX” platform for BlackBerrys — “We have great expectations for the new QNX device and believe a dual-core, TAT inspired UI running QNX’s microkernel OS can deliver a superior smartphone experience.” But there’s also its “BBM Music” service to accompany the BlackBerry Messenger instant messaging function:
After trialing BBMM we believe the service has great potential. The advantage of BBMM is its unique interactive capabilities. Listening to music on a handheld device no longer needs to be a solitary experience but a social one. BBMM allows subscribers to easily share their songs, be introduced to new songs, discuss artists’ albums or songs and even experience their friends’ playlists, all while on the go. We believe the service will be attractive to a large portion of the 45M BBM users out there
BBM will cost $4.99 a month per user, which means it could add $600 million in annual revenue for RIM for every 10 million customers who sign up, he notes.
Papageorgiou raised his estimate for this year to $22.2 billion in revenue and $5.44 in EPS, up from a prior $21.2 billion and $5.30 per share. For next year, he now sees $32.62 billion in revenue and $7.44 per share in EPS, up from a prior $30.65 billion and $7.01 per share.
Papageorgiou bases that on 60 million handsets this fiscal year and 88.5 million next fiscal year. However, he also sees the company shipping 3.75 million tablets this year and 4.56 million next year.
If apple really wants to put the squeeze on samsung they will be bidding up IDCC as well to keep them out of samsungs hands. HTC is in the same boat and really needs them too. You can see a bidding war developing here.