It doesn't get much worse than this. Stocks in a freefall, a hockey mom is running for Veep, and I don't like my new iPhone. Now my gadget troubles may not seem particularly germane in the context of this wild and wooly stock market but it does speak to RIM's (and Apple's) fortunes going forward so here is the story.
I have always been a Mac person so it was natural for me to buy an iPhone at the first opportunity. It's sleek, it's slick, it's colourful, and it comes with all kinds of great features. Unfortunately, it also comes with a number of very serious problems. They include:
Battery life. Frankly, it's brutal. On my BlackBerry, I could go three days without recharging the battery. I can't make it through one day with the iPhone. Plus, the battery is sealed in the unit so you can't carry a spare. You can with a BlackBerry.
For a casual user who stays close to home, battery time may not be a huge concern but for business travelers it is a major issue. Last week, I had eight flights in ten days. I had to spend time between flights trying to find a plug to charge up the iPhone for a few minutes. It conjured up images of hundreds of iPhone users battling over the few available outlets in airports around the country.
Data costs. Since signing up for the iPhone, I have had three voice mails and two text messages from AT&T urgently asking me to call because I was running up a huge data bill. It turned out I had incurred data charges of over $350 in one week and that did not include phone charges. AT&T agreed to backdate me on an all-in data plan for $60 but since then I have had two more text messages with dire warnings.
Last week, The Wall Street Journal gave the explanation for why the BlackBerry Bold has not been launched in the U.S. yet. Apparently, the iPhone is hogging so much data space on the AT&T network that they will have to spend over $1 billion to add capacity. In the meantime, they have delayed the launch of the new Bold. RIM hosts e-mail for the BlackBerry on its own servers but the iPhone has to ping ATT constantly for mail and Internet activity.
E-mail searches. With the BlackBerry I can search for old e-mails on the fly. I can't do that on the iPhone and contact search requires a third party application.
Cut and Paste. With the BlackBerry, a user can perform many of the functions that you can do on your laptop but the iPhone still doesn't work well with those basic workplace functions. It takes a number of steps to perform such simple tasks as looking up and calling a contact. If you have over 1,000 contacts, as I do, it's very slow and tedious.
Typing. Just try typing on the fancy iPhone screen with even medium-sized fingers. Go ahead, I dare you. Every e-mail ends up with multiple mistakes and there is no built-in spell check. Believe it or not, many users have decided to embed an apology in their e-mail signature as a way of placating frustrated recipients.
Yes, there are some very cool features on the iPhone, including its groundbreaking interface and big screen. The Apps store is a great idea and of course it integrates well with all your Macintosh applications if you are on that platform. However, if you are a heavy e-mail user or business traveler then stick with the BlackBerry.
So what does all this mean to an investor? Both Apple and Research in Motion are exciting companies with good growth potential. But Apple worries me for a couple of reasons. The recent announcement of some new colors for the iPod line and an upgrade to iTunes didn't excite anyone and the stock dropped even before last week's market dive.
Second, Steve Jobs looked very thin at the announcement. For those of you who don't follow Apple, Jobs has been battling cancer this year. If he has to step down, the stock will tank. The company still has great products and will likely rally when this chaos is over, but the uncertainty about Jobs' health and the problems that we are now seeing with the iPhone concern me.
On the other hand, Research in Motion (TSX: RIM, NDQ: RIMM) has a number of new products in the pipeline and continues to roll out globally. There is no founder risk on this stock and the product works flawlessly. They have plenty of cash and a clean balance sheet so even though they have exposure to the financial industry they should continue to thrive going forward.
RIM shares fell below $100 on the TSX last week for the first time since spring before rallying $13 on Friday to finish at $109.50. However, even with that bounce RIM is trading below its 50-day and 200-day moving averages. Normally, I'd be tempted to buy now but given the volatility of the markets and the fact that RIM is due to release its quarterly results on Sept. 25, I suggest we hold off for a while. However, if the shares fall below $90 on the TSX or US$85 on Nasdaq, aggressive investors may want to start taking positions.
Action now: Watch and wait. We don't know if we've now seen the bottom and a new bull is in place so things are still in a state of flux. So put RIM on your watch list for now and I'll continue to monitor it. Aggressive investors may buy below C$90 or US$85
I have always been a Mac person so it was natural for me to buy an iPhone at the first opportunity. It's sleek, it's slick, it's colourful, and it comes with all kinds of great features. Unfortunately, it also comes with a number of very serious problems. They include:
Battery life. Frankly, it's brutal. On my BlackBerry, I could go three days without recharging the battery. I can't make it through one day with the iPhone. Plus, the battery is sealed in the unit so you can't carry a spare. You can with a BlackBerry.
For a casual user who stays close to home, battery time may not be a huge concern but for business travelers it is a major issue. Last week, I had eight flights in ten days. I had to spend time between flights trying to find a plug to charge up the iPhone for a few minutes. It conjured up images of hundreds of iPhone users battling over the few available outlets in airports around the country.
Data costs. Since signing up for the iPhone, I have had three voice mails and two text messages from AT&T urgently asking me to call because I was running up a huge data bill. It turned out I had incurred data charges of over $350 in one week and that did not include phone charges. AT&T agreed to backdate me on an all-in data plan for $60 but since then I have had two more text messages with dire warnings.
Last week, The Wall Street Journal gave the explanation for why the BlackBerry Bold has not been launched in the U.S. yet. Apparently, the iPhone is hogging so much data space on the AT&T network that they will have to spend over $1 billion to add capacity. In the meantime, they have delayed the launch of the new Bold. RIM hosts e-mail for the BlackBerry on its own servers but the iPhone has to ping ATT constantly for mail and Internet activity.
E-mail searches. With the BlackBerry I can search for old e-mails on the fly. I can't do that on the iPhone and contact search requires a third party application.
Cut and Paste. With the BlackBerry, a user can perform many of the functions that you can do on your laptop but the iPhone still doesn't work well with those basic workplace functions. It takes a number of steps to perform such simple tasks as looking up and calling a contact. If you have over 1,000 contacts, as I do, it's very slow and tedious.
Typing. Just try typing on the fancy iPhone screen with even medium-sized fingers. Go ahead, I dare you. Every e-mail ends up with multiple mistakes and there is no built-in spell check. Believe it or not, many users have decided to embed an apology in their e-mail signature as a way of placating frustrated recipients.
Yes, there are some very cool features on the iPhone, including its groundbreaking interface and big screen. The Apps store is a great idea and of course it integrates well with all your Macintosh applications if you are on that platform. However, if you are a heavy e-mail user or business traveler then stick with the BlackBerry.
So what does all this mean to an investor? Both Apple and Research in Motion are exciting companies with good growth potential. But Apple worries me for a couple of reasons. The recent announcement of some new colors for the iPod line and an upgrade to iTunes didn't excite anyone and the stock dropped even before last week's market dive.
Second, Steve Jobs looked very thin at the announcement. For those of you who don't follow Apple, Jobs has been battling cancer this year. If he has to step down, the stock will tank. The company still has great products and will likely rally when this chaos is over, but the uncertainty about Jobs' health and the problems that we are now seeing with the iPhone concern me.
On the other hand, Research in Motion (TSX: RIM, NDQ: RIMM) has a number of new products in the pipeline and continues to roll out globally. There is no founder risk on this stock and the product works flawlessly. They have plenty of cash and a clean balance sheet so even though they have exposure to the financial industry they should continue to thrive going forward.
RIM shares fell below $100 on the TSX last week for the first time since spring before rallying $13 on Friday to finish at $109.50. However, even with that bounce RIM is trading below its 50-day and 200-day moving averages. Normally, I'd be tempted to buy now but given the volatility of the markets and the fact that RIM is due to release its quarterly results on Sept. 25, I suggest we hold off for a while. However, if the shares fall below $90 on the TSX or US$85 on Nasdaq, aggressive investors may want to start taking positions.
Action now: Watch and wait. We don't know if we've now seen the bottom and a new bull is in place so things are still in a state of flux. So put RIM on your watch list for now and I'll continue to monitor it. Aggressive investors may buy below C$90 or US$85
