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RIM shines on Wall Street--for now

ZDNet Senior Editor Sam Diaz talks about Research In Motion's recent praise from UBS analyst Jeffrey Fan and whether his notes are merited. Diaz believes the company's successful first-quarter was due to some special promotions and that the second quarter will be a better gauge of RIM's long-term health as competition in the smartphone market heats up.

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>> There's nothing like being the darling of Wall Street, and these days, that title belongs to Research In Motion, the maker of the BlackBerry. After all, what's not to love? In recent weeks, a UBS analyst spoke highly of the company's long-term health noting that the enterprise market will have a pent-up demand for replacement devices once the economy recovers. And then research firm, MPD Group, revealed some first-quarter data that found that RIM BlackBerry outsold Apple's iPhone jumping 15 percent while both Apple and Palm saw declines of ten percent each. That's nice for RIM, but you'll have to forgive me if I don't jump on this cheerleading bandwagon. First, that big first-quarter jump can largely be attributed to a big one, get one free sale on BlackBerry through Verizon Wireless. It's a turbo kick for RIM in the smartphone race, but that was a one-time shot that likely won't be repeated anytime soon. And after that pent-up demand, I don't think it's going to be pent-up as some might think. There's a flood of people out there by iPhones and Google phones and BlackBerry's of their own. And many will want to use that same device for their work e-mails. And wait until other smartphones start hitting the market later this year including the new Palm Pre. RIM may still be the king of smartphones, but the competition is heating up. Let's see how long Wall Street continues to say nice things about RIM.

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