Blackberry-maker Research In Motion, Ltd., (RIMM) plans to launch its much-hyped Wi-Fi-based PlayBook tablet on April 19, 2011. The company will launch three different models with storage capacity of 6GB, 32GB or 64GB and will cost $499, $599 and $699, respectively. The starting price of PlayBook is at par with the starting price of Apple Inc’s (AAPL) iPad2.
PlayBook tablet will be available at more than 20,000 retail outlets across the US and Canada from next month onwards. The device works on user-friendly QNX operating system.
The communication equipment industry is characterized by rapidly changing technology, so the companies always need to upgrade themselves. With the growing popularity of Samsung’s Galaxy Tab and Apple’s iPad, Research In Motion was losing its current market share. Hence, the company expects PlayBook to be its savior amidst a stiff competitive environment.
Recently, Research In Motion successfully launched product brands like Curve, Bold, Pearl, Storm and Torch. The launch of PlayBook tablet will be a significant addition to its strong portfolio. We believe that the launch of PlayBook will create huge demand among the company’s loyal customers.
Booming foreign markets and strong fundamentals, coupled with Research In Motion’s new PlayBook and QNX-based smartphone line ups will act as positive catalysts for growth. Despite these positive factors, we expect stiff competition from Google Inc.’s (GOOG) Android-based smartphones and Apple’s iPhones to result in loss of market share.
Moreover, launch of iPhones from Verizon Wireless (VZ) along with the launch of Blackberry look-alike handsets and smartphones at cheap rates will pose serious threats 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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