China deal pushes RIM shares higher
Shares of Research In Motionhit new highs Thursday after the Ontario-based BlackBerry maker said it obtained clearance to sell its wireless e-mail devices in China.
As Wall Street traders returned after the July 4 holiday, RIM sharesadded $8.25 US to finish at $216.19 US on Nasdaq.Earlier, shares gained as much as $9.36 US, or 4.5 per cent, to hit a new 52-week high of $217.30 US.
And on the TSX, RIM finished up 3.9 per centat $228.59 after earlier hitting a new high of $230.10.
The company's co-chief executive, James Balsillie, said in a conference call last week that RIM obtained device certification and is completing plans to enter the Chinese market. It intends to serve corporate customers in Chinese cities such as Shanghai and Beijing, RIM said.
The company, based in Waterloo, has been trying to get permission to sell its products in China for eight years.
Morgan Keegan analyst Tavis McCourt said Thursday he thinks word of the company's entrance into China helped its stock, but he called the news more media hype than anything that will really affect RIM in the near term.
"China is obviously a large market, but the number of consumers likely to buy BlackBerrys is rather limited in China," he said. "Generally, it's Europeans and American ex-pats working in the major cities that are going to have the BlackBerry service."
Still, over time, RIM's Chinese market will grow as more consumers have jobs or lifestyles that require e-mail access, he said. In the meantime, "the opportunity in China is dwarfed by the opportunity still in front of RIM in North America and Europe," he added.
Peter Misik, an analyst with Canaccord Adams, said he thinks RIM could also be benefiting from competitor Apple Inc.'s June 29 launch of the iPhone.
Non-AT&T carriers are aggressively pushing BlackBerry products to consumers, he said. AT&T's wireless unit is the exclusive carrier for the recently released iPhone, which is a hybrid cellphone, media player and wireless Internet device.
"We're hearing cases where when the iPhone is selling out, AT&T is recommending the BlackBerry as an alternative," he said. AT&T is the exclusive provider of new BlackBerry model, the Curve.
AT&T spokesman Mark Siegel said the company is focused on getting iPhones to those who want them, not on recommending another device.