Research In Motion Ltd., whose shares have surged since it unveiled a tablet computer to compete with the iPad, climbed again as analysts forecast growing demand for the BlackBerry PlayBook.
The PlayBook has a chance to compete with tablets such as Apple Inc.’s iPad because of its QNX operating system, Peter Misek, an analyst with Jefferies & Co. in New York, said in a note today. The software offers stronger security and faster Web browsing than rival products, he said.
“We now have confidence QNX will be a viable platform for carriers and developers,” said Misek, who raised his rating to “buy” from “hold” and lifted his price target to $80 from $55. He also predicted RIM will debut a larger PlayBook, with a 10-inch screen, next year to complement the first 7-inch model.
Separately, analyst Jeffrey Fidacaro of Susquehanna Financial Group forecast RIM will sell 8 million PlayBooks in the next fiscal year. He said investors appear to be assuming sales of 10 million units, a figure he said is optimistic.
RIM rose $2.84, or 4.8 percent, to $61.83 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have dropped 8.5 percent this year.
RIM shares have risen as the company has provided details about the PlayBook, including a 12 percent gain in two days last month after Co-Chief Executive Officer Mike Lazaridis demonstrated the PlayBook in action. The stock has climbed 28 percent since the device was unveiled Sept. 27.
In the tablet market, RIM is chasing Apple, which sold 4.19 million iPads last quarter. Still, tablet makers in general may benefit as the devices replace about 10 percent of the personal computers sold by 2014, according to researcher Gartner Inc.
RIM is winning customers for the tablet ahead of its debut, set for the first quarter. Toronto-based insurer Sun Life Financial Inc. has agreed to buy as many as 1,000 PlayBooks, and the Canadian banking unit of ING Groep NV says it will also purchase the device.
Fidacaro said in his research note that the sharp rise in RIM’s stock suggests investors assume PlayBook sales will reach the 10 million figure. That may be difficult given the growing number of tablets, from Apple Inc.’s iPad to Samsung Electronics Co.’s Galaxy Tab, and RIM’s narrow focus.
Selling so many units “may be challenging for RIM to achieve, particularly as the PlayBook is positioned as a ‘professional device’ and initially as a companion linked to a BlackBerry,” said Fidacaro, who has a “negative” rating on the stock.
Misek, who estimates RIM will sell 1.3 million PlayBooks in the next fiscal year, said the company’s QNX software should help in the tablet and smartphone markets. He said the operating system may be integrated into BlackBerry phones much faster than investors expect, beginning early next year.
RIM, based in Waterloo, Ontario, is losing share in its smartphone business to Apple and phones that run Google Inc.’s Android software. RIM’s global market share dropped to 15 percent in the third quarter from 20 percent a year earlier, according to researcher IDC.
RIM plans to report fiscal third-quarter results on Dec. 16 and said in September it expects revenue to be $5.3 billion to $5.55 billion and profit per share will range from $1.62 to $1.70. Analysts are expecting results at the low end of those ranges, with an average estimate of $5.38 billion in sales and per-share profit of $1.63 billion, a Bloomberg survey shows.
Investors will be watching for indications of how the BlackBerry Torch sold last quarter after going on sale in August. The phone, which features a touch screen and slide-out keyboard and is built on RIM’s new operating system, is designed to go head-to-head with the iPhone and Android touch-screen devices like the Droid.