RIM Goes Through High and Low Tides in the Last Week of November

on Nov 29, 2012

Uncertainty around Research in Motion (RIM) has been pushing the stock (NASDAQ:RIMM) in conflicting directions for the past five trading days as investors struggle to wrap their heads around the future prospects of the BlackBerry maker.

**Nokia Wins Lawsuit against RIM**
On Wednesday 28 November Reuters reported that Nokia announced it has won a legal dispute against RIM over the usage of the Finnish company’s patents related to its wireless access network (WLAN) technology. Nokia has asked courts in the US, Britain and Canada to block the sale of the BlackBerry smartphones until the two companies reach an agreement on royalty rates.

In 2003 and 2008 RIM and Nokia signed and renewed a cross-licensing agreement that covered standard-essential cellular patents. In 2011 RIM appealed to the Stockholm Chamber of Commerce, arguing that the WLAN patent falls under the agreement. According to Nokia, the tribunal ruled in its favour, which means the company is still owed royalty fees from the BlackBerry maker.

**Yacktman Bids Heavily on RIM**
Yacktman Asset Management, a $19 billion (£11.9 billion) mutual-fund firm run by Donald Yacktmann, has doubled its RIM stake in the last quarter to 23.47 million shares worth around $252 million (£157 million), according to a filing with the US Securities and Exchange Commission. “People do like to use the keyboard, and there is a big embedded base,” Yacktman told Bloomberg in a telephone interview. “This company could be worth a lot more.”

The mutual fund has outperformed many of its peers in recent years through relying more on picking individual stocks rather than tracking indexes. According to Bloomberg, the $7.1 billion (£4.4 billion) Yacktman Focused Fund has returned 12 percent over the past five years, putting it in the top percentage of comparable funds.
The disclosure of Yacktman’s position in RIM’s stock has provided a boost for the share price as investors often try to mimic the strategies of large and successful mutual funds. “Anytime you’re got somebody taking an active stake, I think people will say at least there’s some buying support,” said James Faucette, an analyst with Pacific Crest Securities.

**Falling Market Share**
!m[](/uploads/story/933/thumbs/pic1_inline.png)This week Kantar Worldpanel released its smartphone market share estimates, showing that the BlackBerry brand now accounts for only 1.6 percent of the sales in the US compared to 8.5 percent a year ago.
Most disappoint was the fact that RIM lost market share in a number of countries outside the EU. In the UK sales of the BlackBerry fell from 19 percent to 7.9 percent and in crisis-struck Spain from23.7 percent to 3.4 percent. The brand remains unpopular in emerging markets as well with a 0.1 percent market share in Urban China and 2.7 percent in Brazil.
“We understand the competitive nature of the global smartphone market and the need for innovation,” Amy McDowell, a spokeswoman for RIM, said in an e-mail. “We are confident that BlackBerry 10 will provide our customers with an exciting alternative to our competitors, and we are committed to regaining market share.”


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