Investors love to fulfill their own prophecies. In 2011, they believed in Apple (NASDAQ: AAPL), bought into the company’s story and turned it into one of the most successful stocks of the year. In 2012, they expressed doubt and abandoned the stock even as new Apple products continued to break sales records worldwide.
Now investors seem to be giving Research In Motion (NASDAQ: RIMM) the prophecy fulfillment treatment. On Friday the stock jumped more than 10 percent. This rise came despite a global outage that affected BlackBerry customers on Vodafone’s (NASDAQ: VOD) network.
Investors seem to be unfazed by a new report from BMO Capital Markets, which lowered its Price Target on Research In Motion from $12 to $9.
The investor love fest (which has raised the stock’s value by 60 percent since September) should continue for the next few weeks. After that it will be up to Research In Motion — and the long-awaited BlackBerry 10 operating system — to ensure the company survives.
If it has any chance of overtaking Apple’s next iPhone, however, BB10 must have the following five things.
Exclusive and Revolutionary Apps
On January 3, Harris Interactive released the results of a new poll that asked consumers about their smartphone priorities. Social media, texting, e-mail, navigation and free downloads proved to be the most popular features.
While all of those features are different, there is one thing they have in common: none of them are exclusive to Android or iOS.
If Research In Motion wants to attain and maintain a large fan base, it needs to create at least one exclusive and revolutionary feature to add to that list. It must produce something that no other smartphone maker has thought of, and it must be a feature that is not easy to copy. It needs to be something as big as social media and as important as texting and e-mail. With it, Research In Motion would instantly grab the world’s attention.
The World’s Best Camera
In developing the new Lumia phones, Nokia (NYSE: NOK) worked hard to provide them with the best smartphone camera every created, among other unique features. Dallas Mavericks owner Mark Cuban was particularly pleased by the Lumia 920, arguing that it “crushes” the iPhone 5.
This is a solid endorsement. However, while Lumia sales are beginning to pick up, they are still a far cry from the iPhone. The Nokia brand — which has been damaged by a plethora of lackluster releases — will take time to recover.
If Nokia had chosen to develop a less-than-stellar camera for the Lumia handsets, it would have had one less standout feature to attract customers. Consequently, unit sales may have been lower.
Unfortunately for Research In Motion, BB10’s camera is currently laggy and glitchy. If these problems are not fixed by the time the first BB10 devices are shipped, the company could be in trouble.
Seamless Controls
One of the best things about iOS is that it is instantly intuitive. There’s no learning curve. Consumers are able to pick up the iPhone and start using it without second-guessing their actions.
If at any time they have to stop and think about what they are doing while using BB10, the OS is doomed.
An Operating System that Changes Everything
Android and iOS are popular because they changed the way consumers interact with their phones. Prior to their release, mobile phones were limited to RAZR flip phones and other primitive and repetitive concepts.
Research In Motion cannot afford to simply release another “good” or “great” OS. It needs to build the best mobile OS of all time. That is no easy task, but it is vital if Research In Motion has any hope of taking the lead.
Genuine Consumer Appeal
One of the biggest problems with BlackBerry is that it does not have any consumer appeal. While the brand may have a few million loyal followers, most people prefer Android and iOS. Both platforms have cool phones, cool commercials and likable manufacturers. iOS is obviously limited to Apple smartphones, but Android can appear on any device.
This is a bigger problem for Research In Motion than investors may realize. Unlike Microsoft (NASDAQ: MSFT), which can afford to spend five years catching up to Android and iOS, Research In Motion no longer has that luxury. It must compel users to buy its devices right now. Research In Motion needs to come out with the coolest and most attractive phones ever produced. It must launch them with the most brilliant marketing campaign in the history of smartphones. Otherwise there is no way that the company will be able to convince consumers to part with their Android or iOS handset.
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Tags: BB10, Blackberry 10, Research in Motion
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