Citi analyst Jim Suva has turned 180 on RIM’s stock due to the recent news between Nokia and Microsoft. With Nokia adopting the WIndows Phone 7 OS, carriers are seeing Nokia (a sell rated stock) as unstable with an unrealized product strategy. Suva thinks that this will push the carriers to promote other devices such as BlackBerry, Android and Apple.
We are upgrading Research In Motion (RIMM) to Buy from Sell. Carrier “Promotion Commotion” should start to flip to benefit Research In Motion at the expense of Sell-rated Nokia (CIRA analyst Zahid Hussein). Nokia is completely changing its strategy to now embrace the Microsoft mobile operating system thereby creating a multi quarter gap in Nokia products & carrier promotion support. We met with several international carriers at Mobile World Congress in Barcelona Spain this week who commented on their forthcoming shift to promote other handset OEMs (Android, Apple & RIMM) until Nokia’s product strategy is more realizable. Nokia currently has 35% global market share vs. 23% Samsung, 9% LG, 5% Apple, 4% RIMM, 3% Motorola, 3% Sony Ericsson, 3% HTC (4Q’10).
Analysts seem very reactionary and don’t seem to be very good at making long term predictions about stock valuation or the market. It’s important to step back from it all and realize that the smartphone industry is growing worldwide, and with relatively few players in the market, it’s unlikely that any one of them will completely die