BlackBerry Isn't a 10 for Investors

TheStreet.com
The BlackBerry 10 operating system isn't about panache, but rather "cold, mechanical efficiency."
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The BlackBerry 10 operating system isn't about panache, but rather "cold, mechanical efficiency."

NEW YORK (TheStreet) -- Like many tech geeks, I have spent the last week reading everything I can about BlackBerry 10 and the various reviews. Research In Motion RIMM took its sweet time delivering to consumers (assuming they deliver on their latest release date promise).

It sounds awesome at every level. Cool language features, separate work and personal modes, peek-a-boo camera app, cascading (wish my phone did that), cool camera face adjustments through time travel and a smooth running experience.

OK, I admit the camera doesn't enable the user to travel through time, but short of time travel, the phone appears to bring RIM back into the game as a world-class producer, for now. It's the now that is the problem.

If you delare "BlackBerry 10 is as good as -- or better than -- any other phone on the market", you won't get much of a fight out of me. BlackBerry 10 may even be the best phone on the day it's released, but how long does that matter? One, two, maybe three months?

>>Also see: More BlackBerry 10 Rumors Swirl Around RIM

Nokia NOK released a "must have" phone about a year ago, and we haven't heard much since. During the summer of 2009, PALM also released the hottest phone. We all know how well that worked to bring PALM back. Do you even remember the name of the phone? (PRE)

Nokia has Microsoft MSFT to develop and provide an operating system for free. Imagine the cost advantage a phone maker has if the operating system is built and paid for by another company that is pushing for the phone maker to succeed.

It's a big cost advantage and one that Samsung is taking advantage of in its battle with Apple AAPL . While Apple incurs the development costs of iOS, Google GOOG is happy to provide Android phone makers with as many copies as they can sell.

It's hard to say if Microsoft and Nokia's slight bump higher in market share gives RIM hope that it will regain lost market share, or if one more effective competitor will result in a much more difficult sales environment.

Since Apple is expected to deliver the next iPhone well before the holiday shopping season in 2013, and Google releases an updated new Android version every time I turn around, I believe BlackBerry 10 will need a follow up before the holiday season. Otherwise, as great as BlackBerry 10 is, it will become stale by the end of this year.

Maybe Nokia will release a new hot phone before the shopping season, but it appears the smart money is on RIM trying to sell yesterday's newspaper again this fall. Even if RIM's new phone is evergreen and remains popular, is it enough?

I don't think we can tell at this time. The BlackBerry 10 may fill the sails with air for now, but one-hit wonders won't keep the price of the stock moving from the bottom left to the upper right on a chart. You still may be able to buy RIM and make a buck or two, though.

RIM's shares are likely to spike higher during the week of BlackBerry 10's release. What may turn into the biggest catalyst for what may be a significant rise is short sellers and not the phone.

>>Also see: The Mobile Payments Revolution Is Here

About 30% of the float is sold short, based on the last report. Even if for only a short-lived boost higher, you have to anticipate upward price pressure like a soda after being shook up for over a year straight.

As a result, shorting RIM here is filled with peril, but buying for an investment hold appears equally hazardous. The best play with RIM appears to be buying shares now, and closing out the position either the day before, day of, or day after RIM releases the new phone. This is a classic buy-the-rumor, sell-the-news type of event. Just don't get caught up in the hoopla of the phone and believe it will last more than a month or two. Remember, it only took a short period of time for AT&T T to put the Lumia on sale (AT&T had an exclusive) after reporting they were selling out in many of the stores.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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