now he'll be right as rain on BIDU. Here's what he said about RIMM in Barrons on 1/30/06 when trading in the $60's:
Samberg: Fred [Hickey] will go crazy when he hears my next stock. It's RIMM, Research In Motion. The bad news is in the stock. A patent dispute with NTP will be resolved in the next three months. There is a new BlackBerry product, the 8700, that looks terrific. Of all the other companies that have introduced BlackBerry-like products, Motorola [MOT] is the one I'd be most concerned about. The financial dynamics of Research In Motion have been misunderstood.
Samberg: The company has 75% of the market for wireless e-mail users. There are 5.7 million wireless e-mail users in the world. There are an estimated 550 million enterprise e-mail addresses, some 15% of them mobile. There is an available market of 80 million people. People who work on Wall Street think everybody has a BlackBerry. Everybody does not. The power of these things is increasing dramatically. There is no reason to schlep a notebook computer around anymore.
Research In Motion makes money on handsets, but not nearly as much as it makes on having a network and providing the service. There are over 60,000 BlackBerry enterprise servers. The business is growing like mad, and a lot of good stocks have walls of worry.
This one seems to have a big wall.
Samberg: The sequential growth rate of new shipments has been declining. There has been a lot of media hype over the patent suit. But there's more than $1 billion on the balance sheet. If the company loses the dispute, it could cost them $5 a share in cash. Any settlement under $1 billion and the stock flies.
Hickey: The lawsuit isn't the real risk. The settlement will be a certain dollar amount, from $450 million to whatever. The real risk is the competition, because the BlackBerry is expensive. When usage reaches a level that interests the likes of Nokia [NOK] and Motorola, they'll make them cheaper, and on a Microsoft standard that eliminates the server.
Samberg: People don't want a Microsoft solution. Corporate America doesn't want it.
Hickey: IT managers do want to be compatible with Microsoft software. It is the entrenched standard.
What will the price differential be?
Hickey: It's not so much the cost of the device but the cost of the minutes.
Samberg: The BlackBerry receives a message only when there is a message sent. Microsoft has to query the network every few minutes to see if a message has been sent. It is a total bandwidth hog. The [telecom] carriers hate the Microsoft solution because of that. It makes sense for Verizon Wireless to buy Research In Motion, to capture the whole service.
and Art Samburg will be right on Baidu. Art states the facts; Baidu has 60% market share and is growing 170% year over year with growth accelerating due to a new search algorithm far better than the competition. Also; he states a new direct sales force will reaccelerate strong growth as well.
I see Baidu as a long term hold as 4.2 million enterprise customers potentially become customers (Baidu has only 100,000 customers today). The 2008 Summer Olympics is coming to China and their entry into Japan is a bold and smart move. It's a win win on both.