Blackberry 10 To The Rescue?

Cecil is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Research in Motion (NASDAQ: BBRY) recently revealed that the company will showcase the first of its two Blackberry 10 devices on January 30th. Though the first phones won't go on sale simultaneously worldwide, RIM is aiming for a release on multiple continents within 30 days of the unveiling, CEO Kristian Tear said.

As I have mentioned earlier, I believe the smart phone market is dominated by Google (NASDAQ: GOOG) with its Android OS. This is revealed in the Q3 report by research firm IDC that says that the Android OS is present in 75% of smartphones shipped globally. The demand for Android based smartphones is immense as demonstrated when the Google Nexus 4 was sold out in the UK less than an hour after its launch. It is the same story for the Nexus 7 and the Nexus 10.

Certainly it is too ambitious for Blackberry to target the Android OS at this moment. Research in Motion’s Blackberry is expected to compete with Microsoft (NASDAQ: MSFT) for the third spot in the smartphone race, behind Google and Apple. Microsoft recently launched Windows 8 for smartphones.

The Windows 8 phones have a ton of features, but the obvious problem with it is the dearth of apps in its App market. Microsoft and its partners now offer about 120,000 apps in the Windows Store. Eventually of course, the company will overcome this constraint, as they have recently tried to woo developers into developing Windows 8 apps. The lure for developers is that the apps will be compatible with laptops and tablets running with Windows 8.

New features on the Windows 8 software include “Rooms” and “Kids Corner.”  Rooms is an invitation-only area where you can conduct private chats restricted to the members of a group, or share calendars, notes and photo albums. The Kids Corner feature lets parents be reasonably confident the data on the device will remain secure, behind the lock screen and an optional PIN. The company says that two thirds of parents let their kids operate their smartphones. Parents get to choose the games, movies, and other content the child can access. Children can't make in-app purchases, phone calls, or browse the Web.

The other regular features for the OS include Bing, Xbox Live, and Internet Explorer 10. Skype is also available, but needs to be downloaded. Office 365 is also available and will be a big lure thanks to familiarity with the features of Office. However, Research in Motion, while also trying to lure the corporate market for whom Office might seem tempting, has also managed to expand into a different market that might become a key.

On Nov. 8, RIM said BlackBerry 10 had won security certification from the U.S. government, the first time that the company's handsets have been certified for FIPS, or Federal Information Processing Standards, before their commercial debut.

That will be key to cementing RIM's reputation as the most secure smartphone on the market, said Michael Brown, RIM's vice president for security product management. That will help maintain the support of government agencies, a key market, he said. Emerging markets in Latin America, Africa, and Asia have helped the company increase its customer base in recent months, even as North American users switch to other phones. Chief Marketing Officer Frank Boulben said in July that the introduction of BlackBerry 10 devices would be widespread. He didn't name countries and didn't say whether the U.S. would be included initially.

RIM alone can't set BlackBerry 10's release schedule, since it's relying on carriers to offer the devices, said Carl Howe, an analyst at research firm Yankee Group in Boston. The stock rallied on Oct. 31 after the company said that more than 50 carriers have begun lab-testing the phones, a process that typically takes 60 to 90 days.

There are quite a few good reasons to take a chance with Research in Motion. The short percentage of float stood at 13.7% in June. As of Oct 15, 2012 this figure has risen to 19.6%, which makes it a very good candidate for a short squeeze. If the phone is received well on the Jan. 30, it could be the driver that leads to a very nice short squeeze. The company has a quick ratio of 1.7 and a current ratio of 2.2, indicating sound financials. The company’s government contract could be a good reason to be optimistic regarding the long term as well, thanks to its entry into a new market.

ceciljohn2002 has no positions in the stocks mentioned above. The Motley Fool owns shares of Google and Microsoft. Motley Fool newsletter services recommend Google and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.

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