BlackBerry-maker, Research In Motion, Ltd., (RIMM) signed a contract with patent holder Intellectual Ventures (IV). As per the agreement, Research In Motion will be allowed to access about 30000 patent rights in IV’s portfolio apart from its own. However, the terms of the deal were not mentioned.
In the technology field, patent infringement is a very common practice. The recent patent battle between the two giants Nokia Corp. (NOK) and Apple Inc. (AAPL) is an eye-opener for other technology companies. Earlier, Research In Motion was involved in wireless email patents litigation with NTP, Inc., which cost them around $612.5 million. Hence, holding 30000 patent rights will give them the extra mileage in this competitive arena.
Currently, we believe that Research In Motion is going through a period of evolution, where the company is either teaming up with Google (GOOG) to offer Android operating system for their new PlayBook tablet or acquiring new companies like TinyHippos Inc that develops software for mobile applications. Research In Motion is all set to launch their new PlayBook tablet on April 19, 2011, which we believe will help them to retain their market share.
Booming foreign markets and strong fundamentals, coupled with Research In Motion’s new PlayBook and new smartphone line ups, will act as positive catalysts for growth. However, weaker outlook and stiff competition from Motorola Mobility Holdings, Inc.’s (MMI) XOOM tablet series and Apple’s iPhone and iPad series will result in loss of market share. Moreover, the launch of Blackberry look-alike handsets and smartphones at cheaper rates will also pose a serious threat to the company’s market share.
We, thus, maintain our long-term Neutral recommendation for Research In Motion Ltd. Currently, Research In Motion Ltd has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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