We were expecting a new version of BlackBerry, running an upgraded operating system, as well as a possible new slider-type device. With the Torch, we ended up getting both of these in one. The verdict appears to be that the product is a solid improvement for RIM, compared with the company's current operating system, and that the new device has better functionality (considering the touchscreen).
Yet, there appear to be nagging doubts in most investors' and observers' minds on whether the new device will be enough to stem the tide of Blackberry defectors to Apple (AAPL - commentary - Trade Now) andGoogle (GOOG - commentary - Trade Now). From the moment the new Torch device was announced on Tuesday, when the stock got up to $58.53, RIM's stock price has dropped more than 9%.
Some of the $3 billion or so in lost market capitalization in two days can be attributed to the uncertainty around how the United Arab Emirates and Saudi Arabia will resolve their security issues regarding RIM. But, to be frank, I view that as a non-issue in the long-term. I fully expect RIM to find a resolution that is good both for them and for those countries -- the company would really be shooting itself in the foot if it did not.
More to the point, I believe the stock's decline is an early vote on how excited investors are by the Torch -- and that isn't good news for RIM.
Now, the stock market definitely is not all-seeing or all-knowing. Let's not forget that the market -- and crack Wall Street analysts -- completely underestimated how big the iPhone and iPad were going to be. (Remember the analyst who said - shortly after the product announcement - that Apple would be lucky to sell 1 million iPads this year? They're now selling a million a month. In my view, it's also ironic that the media snickered at the name iPad and that, at this point, it's universally accepted -- so much so that no one has said a word about RIM considering the name BlackPad for its new tablet device, which is supposed to come out later this year.)