RIMM

Our Reports on Stocks in the Computer Hardware Industry

by

Structure of the Computer Hardware Industry The computer hardware space, which spans the personal computer to the iPhone and iPad, is highly competitive. The industry is characterized by frequent product introductions and rapid technological advances that can cause dramatic market share shifts. Though some firms benefit from a strong brand, participants often price aggressively, pressuring margins. Firms are also subject to potential component shortages/disruptions, which can punish performance. Obsolescence may be an eventuality for some, and services revenue has become critical for others. We’re neutral on the space. We’ve optimized our tehnology coverage. To access the reports, please select here.

Take the Money and Run: Fairfax Bails Out Blackberry

by

Late last week, smartphone maker Blackberry (click ticker for report: ) preannounced terrible second quarter results. Revenue likely declined approximately 43% year-over-year to $1.6 billion, which is nowhere in the ballpark of consensus estimates in the $3 billion range. This amounted to 3.7 million phone sales, far less than the number of units Apple (click ticker for report: ) sold during the first weekend of its iPhone 5S/5c release. The firm will post an operating loss of $950 million to $995 million driven primarily by a pre-tax inventory charge of $930 million to $960 million. Cash fell to $2.6 billion, and the firm announced that it would lay off 40% of its global staff, leaving the company with 7,000 total … Read more

Blackberry: Strategic Alternatives Signal Failure

by

After the launch of its new phone and operating system came and went without much fanfare, smartphone maker Blackberry (click ticker for report: ) announced that it is exploring strategic alternatives for the company. Although most tend to associate strategic alternatives with selling the company, Blackberry is also open to partnerships and joint-ventures. Let’s start with the obvious inference out of this news: Blackberry 10 didn’t save the company. If this wasn’t clear enough when Blackberry reported weak results for its fiscal year 2014 first quarter, we think the situation is obvious now. Consumers, particularly of the high-end smartphone variety, simply do not want Blackberry products. The app world is far inferior to competitors Apple (click ticker for report: ) … Read more

Intel Punished for Investing in the Future

by

Thursday afternoon, semiconductor giant Intel (click ticker for report: ) reported better than expected fourth quarter results. Revenue declined 3% year-over-year to $13.5 billion, roughly in-line with consensus expectations. Earnings easily exceeded modest estimates, falling 25% year-over-year to $0.48 per share. Due to the weak PC market and the firm’s desire to clear inventories, gross margins were down significantly in the fourth quarter, falling 650 basis points year-over-year to 58%. Gross margin declines were the primary driver behind the lapse in profitability, but research & development costs increased $300 million compared to the same period of 2011 to 19.5% of sales (up 290 bps Y/Y). On a segment basis, the PC Client Group, not surprisingly, drove the majority of revenue … Read more

We Take a Deep Dive into the Future Prospects of Best Idea Google

by

Before the meteoric rise in the price of Apple (click ticker for report: ), Google (click ticker for report: ) stole most of the tech-stock headlines and, according to some, was pretty much a sure bet to become a $1,000 stock. However, looking under the hood, the company has had some turmoil during the past few years. In addition to bringing back founder Sergey Brin as the CEO, the company has created the world’s most successful mobile operating system to date (Android), a social network with over 100 million users, and failed to purchase Groupon (click ticker for report: ), which at the present seems like it was a blessing. Additionally, the company is working on cars that drive themselves, shuttered Google Wave … Read more

Are Apple’s Fundamentals Deteriorating?

by

Given Apple’s (click ticker report: ) recent share price performance during the past 3 months, we’ve heard whispers questioning the strength of the company’s fundamentals. It first started with the Google Maps (click ticker for report: ) debacle when somehow replacing the default maps program on the iPhone with an inferior product was going to sink the entire company. Then fears of the iPad Mini–either not selling or cannibalizing sales of the full-sized iPad and subsequently crippling margins–became the next fear. Apple’s Fundamentals Remain Sound However, there is no evidence of a product slowdown at Apple. The iPad Mini sold out its first run in a short amount of time, and data over the Black Friday weekend showed that the iPad … Read more

Why We Continue to Like Apple and Microsoft

by

In yet another negative blow to the PC market, Gartner reports that PC shipments fell 13.8% year-over-year during the third quarter. The big losers, yet again, were the PC giants Dell (click ticker for report: ), HP (click ticker for report: ), and Toshiba. Of course, the shocking loser was Apple (click ticker for report: ), which saw shipments fall 6% (considerably lower than the 25%+ drops of competitors), though market share increased 110 basis points to 13.6%. With the entire industry slumping, who’s to blame? Not surprisingly, we’re labeling Apple as the major disrupter in the PC market. Since the inception of the iPhone and subsequent iPad releases, computing has shifted more and more toward mobile consumption, with the … Read more