Research In Motion Ltd (BBRY) Has A Long Way To Go

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BlackBerry maker Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) has everything riding on its BB10 OS, launched late January. The rollout of new devices Z10 and Q10 has to go smoothly before CEO Thorsten Heins can see some positive signs.

Despite the positive reviews on the new products, investors remain skeptical about the company.

Research In Motion Ltd (BBRY) Has A Long Way To Go

The company has lost market share rapidly. In the fourth quarter of 2011, BlackBerry had about 9 percent share in the smartphone market. By the end of Q4 2012, its market share has fallen to a meager 3.5 percent.

Now Heins and his team are relying on BB10 to turn the company’s fortunes. Winning its lost glory and investors’ faith is a big challenge for Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB). With so much attention investors are likely to react negatively to any bad news, which we saw happen twice last week.

Last week, one of BlackBerry’s customers The Home Depot, Inc. (NYSE:HD) announced it would shift 10,000 of its executive to Apple Inc.’s (NASDAQ:AAPL) iPhone. That caused BlackBerry shares to plummet 5 percent within hours. Again, shares plunged rapidly after the news that former CEO Jim Balsillie sold off  his entire 26.8 million shares in the company.

To get an idea of how BlackBerry devices are faring in the markets, Deutsche Bank AG (NYSE:DB) (ETR:DBK) analysts conducted a survey of 30 carrier stores in the UK and 30 carrier stores in Canada. In BlackBerry’s home country, many stores reported being sold out of the Z10 devices, and their sales people were well-versed of the device’s features and attributes. However, the stores reported that they hadn’t received a large inventory in the first place.

None of the stores in the U.K. reported being sold out, but their sales force was better trained on the devices when compared to a week prior. Looks like BlackBerry formerly known as Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is focusing more on defending its home turf. And demand in Canada is better than in  the UK. Analysts believe that a strong sales in Canada is necessary to gain the traction globally.

Deutsche Bank analysts said that declining service revenue remains the primary concern, which could be the paramount risk with the stock. There are chances that consumer portion of service revenues won’t be any higher than its preceding platforms. Since, Android and iOS charge carriers nothing, BlackBerry too may follow suit. Analysts estimate 20 percent decline in service revenues this year and the next. That is far higher than their previous estimate of a 5 percent decline.

Deutsche Bank AG (NYSE:DB) (ETR:DBK) maintains a hold rating on the stock, as analysts think that the initial sings don’t indicate the strong sales they were expecting from BlackBerry.

While Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) (Blackberry now) is struggling to attract investors, the Internet subscription service provider Netflix, Inc. (NASDAQ:NFLX) is slowly inching towards $200 mark. In September 2012, the stock was at an annual low of $53.80, but it has added more than $130 to its price. Shares gained further after a District Judge dismissed a shareholder lawsuit. The suit claimed that Netflix didn’t disclose rising expenses in order to push the stock prices higher. Shares are currently trading at $188.50.

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