1. Buzz_Dengue's Avatar
    Analysis: Canadians Who Follow RIM Take Pity on a Local Hero
    8:58am EDT By Alastair Sharp


    TORONTO (Reuters) - Wall Street and Silicon Valley have issued verdicts on Research In Motion, and they are mostly damning for the BlackBerry maker. Canadians, on the other hand, are eager to give their compatriot the benefit of the doubt.

    In both the smartphone and tablet computer markets, the momentum belongs to Apple, which edges ever closer to the title of world's most valuable stock, and Google, its Android software embraced by an army of device makers.

    By contrast, RIM's shares have fallen 60 percent from a February peak, hammered by a litany of bad news. The company has missed its own limp quarterly forecasts, suffered crucial delays in bringing advanced smartphones to market and elicited yawns when it launched its long-awaited PlayBook tablet.

    In the latest sign of decline, RIM said on Monday it will cut 11 percent of its workforce, even as it rushes to pull off a tricky transition to a new Blackberry operating system.

    Against that backdrop, there is a discernible gap between Canadian and non-Canadian analysts covering the struggling Ontario-based technology leader. Put simply, the Canadians have a lot more time for their national champion.

    One in five analysts covering RIM currently suggest buying the stock. But the ratio is one in three for Canadian analysts, and many Canadians think the stock sell-off is overdone.

    "The pessimism of the big U.S. bulge-bracket firms is really what presumably has driven the stock to the levels that it's at," said Paul Taylor, chief investment officer for BMO Harris Private Banking. The Bank of Montreal unit manages C$14.5 billion ($15.3 billion) for wealthy Canadians and holds less than C$100 million of RIM stock.

    "It irks them to think a Canadian company could possibly have the backbone to compete with the likes of Apple," said Taylor, who clearly thinks investors aren't giving RIM a fair shake.

    RIM has long been a source of Canadian pride, a start-up that beat giants like Ericsson and Motorola to make the BlackBerry's secure mobile email an essential tool. Now a global firm with billions in quarterly sales, RIM faces a new generation of users besotted with its touchscreen rivals.

    Still, Canadian enthusiasm runs deep. A prime example is Scotia Capital's Gus Papageorgiou, who kept an "outperform" rating on RIM since before the iPhone launched in early 2007.

    Papageorgiou's price targets since early 2009, on average, were 80 percent higher than the stock's close that day.

    Just before RIM issued disappointing quarterly numbers and a weak outlook last month, leading to the stock's sharpest one-day decline in years, Papageorgiou forecast a price above C$80 a year later.

    Even now he expects the stock to trade at C$57 in 12 months, while at least six U.S. firms (and one Canadian bank) see it staying under $30. The average target is $38. The targets differ slightly depending on whether the Nasdaq or Toronto-listed stock is quoted.

    Papageorgiou declined to comment for this article.

    Not everyone has held on so long. At RBC Capital Markets, analyst Mike Abramsky abandoned his "top pick" rating in April and slashed his target price to $55 from $90. Two months later he dropped it to $35 and this month he urged RIM to split into two separate businesses.

    FEW RIM BEARS IN CANADA

    Opinion is sharply divided on RIM's long-term prospects. The company, which earned $6.34 a share in the financial year to late February, is expected to make between $4.10 and $6 a share this year, after it abandoned a $7.50 target in June.

    Seven of the nine Canadian analysts expect RIM's earnings for fiscal 2012 to beat the average of all 55 analysts covering the stock, a bias some see as difficult to shake.

    "You find a few bulls on RIM in the U.S. but you generally don't find many bears in Canada," said Eric Jackson, founder of hedge fund Ironfire Capital, which covered a short position -- a bet that the price will fall -- in RIM a few weeks ago.

    "I think there is more hometown bias than they realize in Canada."

    To be sure, not everyone agrees it's the Canadians who have misjudged RIM.

    "The Canadian investors have far more of a global picture in terms of what is driving RIM's business," said Geoff Blaber, a London-based analyst at CCS Insight. "A lot of the U.S. investment analysts can be somewhat focused on what is happening on their doorstep."

    RIM is finding the United States a particularly tough market as its leading position withers in the face of an onslaught from Apple's iPhone and then the phones Android.

    Verizon, once a predominantly BlackBerry service provider, turned its attention to Android-based handsets from Motorola Mobility and HTC in late 2009.

    ANAMOLY OR LEADING INDICATOR?

    It remains to be seen whether the United States, where handset subsidies hide the upfront costs of expensive phones such as the iPhone, is an anomaly or a leading indicator.

    "The reality for RIM is probably somewhere in between what those investors are seeing," said CCS's Blaber. "They've still got a lot of questions to answer."

    Shareholders lobbed tough questions at RIM executives at a July annual meeting held near RIM's headquarters in Waterloo, a university town 90 minutes drive from Toronto. But they also appeared generally content with the responses.

    In Waterloo, it is easier to blame outsiders for RIM's troubles than to turn on RIM's management, which narrowly avoided a vote on whether co-chief executives Mike Lazaridis and Jim Balsillie should relinquish their other shared role as board chairman.

    "What I find ironic is that analysts who are sitting in this room will criticize this company while typing out that criticism on a BlackBerry," one shareholder said to laughs from the audience, "And I think that that's the most self-serving, most despicable activity on this planet," he said.

    ($1 = $0.94 Canadian)

    (Editing by Frank McGurty)

    http://www.reuters.com/article/2011/07/26/us-rim-canadians-idUSTRE76P2Z320110726
    Last edited by Buzz_Dengue; 07-26-11 at 09:05 AM.
    01itr likes this.
    07-26-11 08:24 AM
  2. _StephenBB81's Avatar
    I Enjoyed the read, and very much agree with the Authors take on US analysts focused far more on their door step than globally, and Canadian Analysts being more globally aware, as a country Canada has always had to be far more involved globally than the US has had to, so we are just used to it.

    I have my hopes for RIM , They have a lot of steps to climb and can't really afford to miss any.
    01itr likes this.
    07-26-11 08:43 AM
  3. BaconMunch's Avatar
    [B][SIZE="6"]
    ($1 = $0.94 Canadian)
    Enough said...US Markets is so blind with what's about to hit them broad side in the face and that's the global economy that they don't care about.
    07-26-11 09:40 AM
  4. Economist101's Avatar
    I Enjoyed the read, and very much agree with the Authors take on US analysts focused far more on their door step than globally, and Canadian Analysts being more globally aware, as a country Canada has always had to be far more involved globally than the US has had to, so we are just used to it.
    Of course Canadians think globally; you have no real option. Canada is the 35th most populous country in the world. It's between Algeria and Morocco on the list, and honestly, I'm not sure I could find either of those latter two countries on a map. Meanwhile, the U.S. is 3rd, and California alone has a larger population than Canada as a whole. So, while the world view is admirable, it's not as a though a reasonable person could sit back and claim that "as goes Canada, so goes the world."
    07-26-11 09:59 AM
  5. Economist101's Avatar
    I love this line in the article:

    ""It irks them to think a Canadian company could possibly have the backbone to compete with the likes of Apple," said Taylor, who clearly thinks investors aren't giving RIM a fair shake."

    Or it could be that Apple makes $10.50 in profit for every dollar RIM makes, or that Apple's got $76 billion in cash compared to RIM's $3 billion. But let's ignore all that objective, hard data and instead latch onto blind nationalism.
    psufan32 and brucep1 like this.
    07-26-11 10:03 AM
  6. JAGWIRE's Avatar
    thanks for the article man it was a good read
    07-26-11 03:02 PM
  7. gord888's Avatar
    I love this line in the article:

    ""It irks them to think a Canadian company could possibly have the backbone to compete with the likes of Apple," said Taylor, who clearly thinks investors aren't giving RIM a fair shake."

    Or it could be that Apple makes $10.50 in profit for every dollar RIM makes, or that Apple's got $76 billion in cash compared to RIM's $3 billion. But let's ignore all that objective, hard data and instead latch onto blind nationalism.
    RIM is competing on a global market with so much less... how about that efficiency?
    and
    There's nothing wrong with a nationalism and/or patriotism in the article. National pride is something every Canadian must have, and i think rocking a BB should part of that.
    07-26-11 05:08 PM
  8. _StephenBB81's Avatar
    Of course Canadians think globally; you have no real option. Canada is the 35th most populous country in the world. It's between Algeria and Morocco on the list, and honestly, I'm not sure I could find either of those latter two countries on a map. Meanwhile, the U.S. is 3rd, and California alone has a larger population than Canada as a whole. So, while the world view is admirable, it's not as a though a reasonable person could sit back and claim that "as goes Canada, so goes the world."
    I DID say HAD to, I know all to well as Canadians rely on world markets because of Economy's of scale.
    I wasn't saying it like we are just being better for it, we do it out of requirement which forces us to have a more global look, where as the US has never really as a country looked beyond their boarders unless oil interests are concerned,
    07-26-11 05:16 PM
  9. PsyCorps's Avatar
    Of course Canadians think globally; you have no real option. Canada is the 35th most populous country in the world. It's between Algeria and Morocco on the list, and honestly, I'm not sure I could find either of those latter two countries on a map. "
    maybe you should have payed better attention in class than?
    And no this is not to insult you, it's just the first thing that came to mind and made me laugh
    07-26-11 05:39 PM
  10. Economist101's Avatar
    RIM is competing on a global market with so much less... how about that efficiency?
    Yeah, okay. In that case, RIM is really showing Apple how it's done.

    FYI, let's consider this. Apple's R&D spending was just 30% more than RIM's last year ($1.8 billion to $1.4 million). Let's consider what Apple has released since August of 2010:

    iPod Touch
    iPod Nano
    Apple TV
    MacBook Air (twice)
    iMac
    MacBook Pros
    Mac Pros
    Networking hardware
    iPhone 4 (CDMA)
    iPad 2

    During this time, RIM has released the PlayBook and nothing else. Yeah, they're efficient alright.

    There's nothing wrong with a nationalism and/or patriotism in the article. National pride is something every Canadian must have, and i think rocking a BB should part of that.
    It's not that there's a problem with nationalism; it's that it's irrational to suggest that RIM's stock is in the toilet because analysts are "irked" by the idea that RIM competes with Apple.
    psufan32 and southlander like this.
    07-26-11 07:04 PM
  11. gord888's Avatar
    Yeah, okay. In that case, RIM is really showing Apple how it's done.

    FYI, let's consider this. Apple's R&D spending was just 30% more than RIM's last year ($1.8 billion to $1.4 million). Let's consider what Apple has released since August of 2010:

    iPod Touch
    iPod Nano
    Apple TV
    MacBook Air (twice)
    iMac
    MacBook Pros
    Mac Pros
    Networking hardware
    iPhone 4 (CDMA)
    iPad 2

    During this time, RIM has released the PlayBook and nothing else. Yeah, they're efficient alright.



    It's not that there's a problem with nationalism; it's that it's irrational to suggest that RIM's stock is in the toilet because analysts are "irked" by the idea that RIM competes with Apple.

    I don't believe that creating laptops and ipods require nearly as much R&D as mobile phones and tablets. But sure, throw it into the mix. RIM does need to handle infrastructure components in addition to enterprise software, security and encryption, and hardware devices. So yes, they are spending, but in areas less visible to consumers.

    Back on topic though - do you deny that there is bias in from American analysts?
    07-27-11 09:40 AM
  12. Economist101's Avatar
    Back on topic though - do you deny that there is bias in from American analysts?
    There is bias in all analysts, even Canadians (as is shown in the article).

    Do you deny that there are legitimate reasons why a stock analyst would have AAPL rated higher than RIMM based on objective data?
    07-27-11 09:48 AM
  13. slicx's Avatar
    There is bias in all analysts, even Canadians (as is shown in the article).

    Do you deny that there are legitimate reasons why a stock analyst would have AAPL rated higher than RIMM based on objective data?
    agree with you mate!!
    07-29-11 10:11 AM
  14. 1488's Avatar
    There is a huge difference between Canada and the US when it comes to phones. I recently took a trip into Idaho, Washington and Montana there was a definite lack of blackberry phones, at the stores and in people's hands. I went to target, a few malls, Fred Meyers, Costco and I didn't even see a single playbook. In stores, they had maybe one blackberry and then a bunch of the droid large touch screen phones. Even when watching tv, there were lots of adds for the Motorola tablet, but nothing for playbook.

    In Canada, I see Blackberry everywhere. Phones, tablets, advertisements.
    07-30-11 10:12 PM
  15. technology_fanboy's Avatar
    Enough said...US Markets is so blind with what's about to hit them broad side in the face and that's the global economy that they don't care about.
    These are the same analyst that did not see the collapse of Lehman Brothers, Bearsterns and the rest of the financial crises that ensued. These are the same analyst that did not foresee the turmoil that GM and Chrysler were in and these are the same analysts that did not only not foresee the housing collapse but greatly underestimated its effects and still do.

    I suggest that people stop following analyst and start doing their own research!
    Today's analysts are no better than gypse fortune tellers.
    PsyCorps and Phil DeLong like this.
    07-31-11 10:13 AM
  16. BergerKing's Avatar
    During this time, RIM has released the PlayBook and nothing else. Yeah, they're efficient alright.
    Uh, actually, factually incorrect. Since August of 2010, there have also been the 9670 Style and the 9780 Bold. (Sept and Nov) neither device was spread through enough carriers to make much of an impact on the scale of the big picture.

    Posted from my CrackBerry at wapforums.crackberry.com
    07-31-11 10:37 AM
  17. satanberry's Avatar
    Uh, actually, factually incorrect. Since August of 2010, there have also been the 9670 Style and the 9780 Bold. (Sept and Nov) neither device was spread through enough carriers to make much of an impact on the scale of the big picture.

    Posted from my CrackBerry at wapforums.crackberry.com
    Don't forget the Torch, August 12, 2010. I count 3 phones released by RIM to 2 iPhone 4. As for people comparing RIM to Apple, RIM makes smartphones. Apple makes a lot of other products. Is it really fair to compare stock prices and earnings? That would be like comparing Audi sales, cars, to Honda sales, which includes bikes, equipments, generators, lawnmowers and now airplane. Seems unfair.

    Posted from my CrackBerry at wapforums.crackberry.com
    07-31-11 11:36 AM
  18. southlander's Avatar
    There is a huge difference between Canada and the US when it comes to phones. I recently took a trip into Idaho, Washington and Montana there was a definite lack of blackberry phones, at the stores and in people's hands. I went to target, a few malls, Fred Meyers, Costco and I didn't even see a single playbook. In stores, they had maybe one blackberry and then a bunch of the droid large touch screen phones. Even when watching tv, there were lots of adds for the Motorola tablet, but nothing for playbook.

    In Canada, I see Blackberry everywhere. Phones, tablets, advertisements.
    Even in the US it seems regional. I was in California last week and noticed a majority iPhones, probably 60-70%. Then I got on a plane to fly back to Atlanta and as boarding I counted phones that were out. 6 out of 6 on the way to my seat were BlackBerrys. I also remember a study some time back that mentioned Android is stronger in the mid west, BlackBerry on the east coast, and I would assume (though I can't remember) Apple out West (in CA). But Apple is likely gaining everywhere, for now.
    07-31-11 11:51 AM
  19. samab's Avatar
    It's more to do with Canadians with more hands-on experience with QNX.

    If you are a Canadian from Ontario (the province with close to 40% of the Canadian population) in mid to late 30's, then you have used QNX when you were in high school in the mid to late 1980's.

    ICON Computer

    For us in that age group, QNX is not an abstract construct of an OS behind nuclear power stations, traffic light systems or space shuttle's robotic arm --- we actually used it daily in high school. If you are a senior stock analyst in Toronto, you are in that age group. If you are a junior analyst, you may have older siblings in that age group. Sure, that's a vague memory from 20 years ago. But remember that most analysts don't have a computer degree, so they need to talk to some engineering people --- and if you are talking to an average Canadian engineer, chances are they have a much more understanding of QNX than your average American engineer.
    07-31-11 03:40 PM
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