CNBC Stock Blog

RIM Could Consider a Merger with This Rival: Strategist


BlackBerry maker Research In Motion reported a stronger than expected quarterly profitand also provided a strong guidance for the current quarter. David Garrity, principal at GVA Research, shared his analysis on the firm.

Inside RIMM Earnings

“This is the calm before the storm, because you’ve got a situation for RIM where they are caught competitively in the middle,” Garrity told CNBC.

On the high-end, Apple’s iPhone is starting to break into the corporate area, a franchise that RIM had historically dominated. Meanwhile, Google’s Android platform is powering a broader range of competitors and driving down pricing on the consumer front, he noted.

“What [RIM’s] got in place does have a franchise which has some sustainability to it, but investors have to be cautious: looking at the technology market, product cycles can move very quickly,” warned Garrity.

Going forward, Garrity said he wouldn’t be surprised to see RIM considering mergers. He picked Finnish handset maker Nokia as a likely candidate.

“This may not be a bad time for the two parties to consider if not a merger, then some type of alliance,” he said.

Scorecard—What He Said:

  • Garrity's Previous Appearance on CNBC (Sept. 7, 2010)

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Garrity’s family own shares of AAPL.

Garrity does not own shares of RIM.