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Don’t count RIM out

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With the iPhone coming, and initial positive review from personal technology Guru such as Walter Mossberg. It’s not easy time for RIM investors and Blackberry users. For one, your friend who gets new iPhone in a few days will laugh your Blackberry is so old tech, with his/her iPhone features touch screen, two fingers zooming in/out a picture, iPod for music and video, all of which a Blackberry can not do. 3G? The Blackberry Bold is coming but at least a month after iPhone launch. Ouch.

But not that fast. While RIM has all the disadvantages compared to iPhone, strangely the blackberries are still selling like crazy, and its subscribers base is also growing: it just added 2.3 million in the quarter ended May 31 (fiscal 1Q 09 call). One thing RIM and Apple users in common is they have kind of cult culture. Check out this and you will get an idea. Seriously I think compared to Apple/iPhone, RIM/Blackberry has the following advantages:

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RIM: bear case, bull case

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Bear case
RIM (Nasdaq: RIMM) missed both top line and bottom line in Q1, and issued not so strong outlook for Q2. Read news from Reuters for more details. Q1 revenue is $2.24 b vs. expected $2.27 b; earning was $0.84 vs. 0.85. While I think missing of bottom line is understandable because of spending in R&D, the revenue miss is not because its competitor iPhone was sold out going into the end of quarter.

Competition from iPhone will intensify. New 3G iPhone will be launched on July 11, and it is deceptively priced at $199. The reason I said “deceptively” is the real owner cost is much higher (see Christopher Null, How the half-price iPhone 3G actually costs you more).

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RIM, Mindray

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Crocs broke my heart; RIM made my day.

While CROX continued his downward spiral, today Research in Motion (RIM, Nasdaq: RIMM) is up 8% on the news it will beat its forecasted subscriber growth. Now I regret I did the swing last week, in which I cashed in some gain, and reduced the number of shares (RIMM) I hold. I only have a small position of RIMM, and I did not go ahead and chase it today. Thought its exposure to US market and the slowdown of US economy is still a concern. I understand the company is diversify both geographically and productwise (from business to consumer, the Blackberry Pearl).

I decided to get some Mindray instead. As the unoffical rule says: the stock goes down after Major bought it. Yes, it did: I bought at $34.87, and it’s about 34.20 now.

Mindray will report Q4 2007 earning on 8PM EST March 5. (source)

Mindray product pic

Dial-in details for the earnings conference call are as follows:

Hong Kong: +852-3002-1672
US Toll Free: +1-800-299-9086
International: +1-617-786-2903
Passcode for all regions: Mindray

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Blackberry down

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Yesterday one of the big news (Reuters) in the technology arena is the down of Blackberry (a.k.a., the Crackberry) email sevice in north America. This obviously has huge impact on the business and goverment users as they rely on device for email. But how could this happen? Isn’t blackberry supposed to be more reliable than the mobile phone network: one example is in 911, Dick Chenny got his Blackberry working while many cell phones users in White House and Congress stopped working.

Well, while the Blackberry is usually reliable, it is not perfect. According to the news, it appears the networking center of RIM had a glitch yesterday. As shown in the picture below, every email has to route through RIM’ networking center (or data center).

blackberry architecture pic
(source,, a full size architecture picture can be seen here.)

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Close AMZN puts, Portfolio update

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I closed the Amazon Feb $65 puts last Wed, when I saw the stock dropped to around $68, which is the low point the day after it released Q4 earning.

Lesson learned:
1) short/put a stock is much harder than I thought. I started this trade because I saw EDU, AAPL, and VMW all dropped big after missing earning. But I have hind-sight bias on them: things are always clearer on rear view mirror. I did not know EDU will issue a so-so guidance for this Q; I did not know iPod suddenly stopped growth, iPhone did not sell as fast as Steve wanted, and Mac computers are expensive considering consumer slow down.

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Flip flopper

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It appears Politicians are not the only flip floppers. The reason we should not follow analyst blindly.

Citigroup Global Markets analyst Jim Suva, talked about RIMM on early Feb (source: seekingalpha):

“Overall, we believe the points brought up during today’s call are highly supportive of our bull case on RIM. Concerns regarding financial services exposure have been largely debunked, in our view, and we think investors should be encouraged by what seems to be a very low replacement rate at Citi, and financial services in general…”

Mr. Suva reiterates his “buy” rating on RIM, and maintains a $140 price target.

Today, according to Barron’s, CitiGroup analyst thinks RIMM will go down significantly. Let me quote:

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Forgot to buy VMW puts

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I thought about it early Jan. after reading from San Jose Mercury News that VMW is the No. 4 software company, in terms of market capital (about $30 b as of yesterday). But I put down the earning date (Jan 28) on my Google Calendar (not Yahoo), and it did not send out reminder email as Yahoo does. So I missed buying the puts before earning. Interestingly, here is today’s price change of the puts options for VMW (expires Feb):

$60: $0.85 => $7.30 (up $6.45, or 759%)
$65: $1.40 => $11.00 (up $9.60, or 686%)
$70: $2.65 => $15.80 (up $13.15, or 496%)
$75: $4.30 => $20.60 (up $16.30, or 379%)

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