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Tickers in this Article: RIMM, AAPL, NOK, MMI, GOOG, MRVL
If Apple (Nasdaq:AAPL) is the smartphone company that can do no wrong, then Research In Motion (Nasdaq:RIMM) is the company that cannot seem to deliver what the Street wants. Now, with the company giving very iffy guidance for its next fiscal year and seemingly losing momentum at the high end of the range, the fear is that the company may be slipping past a point of no return.

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An Uninspiring End to the Year
The absolute details of RIM's quarter were not bad, but near-term stock market performance is almost always a game of performance relative to expectations. RIM did post 36% revenue growth, with device sales making up about 81% of the total. This top-line result did miss estimates, though. Below the top line, results were okay, but not exciting. Gross margin weakened from the year-ago level, dropping about 150 basis points. Likewise, operating income rose more than 22%, but margin contracted two and a half full points.

A Very Tough Year on the Way
Although RIM made the claim that the BlackBerry was the best smartphone in the U.S. in 2010, that is the sort of press release filler that makes absolutely no difference in the assessment of the stock. What matters far more is the fact that there will apparently be no new models in the first quarter, and that there were will likely be a lot of inventory-clearing in the front half of the year. That means that margins are going to take a hit, expectations will be back-end-loaded into the second half, and analysts and investors will have plenty of doubts about management's view of the company's earnings power.

Although management did confirm that the new Playbook will support apps that run on Google's (Nasdaq:GOOG) Android, that was about it for the good news.

The Next Nokia?
It seems only a matter of time before speculation begins on whether RIM is going the route of Nokia (NYSE:NOK) - a one-time darling of the growth crowd that has been largely written off as a has-been, even though it is technically still the largest cell phone maker in the industry.

RIM is seeing better performance on the low end of its product range, while losing share on the top end. Unfortunately, that is eerily similar to what ended up being the Nokia "model" - a failure to innovate and lead the market led to share loss on the high end, after which the company focused more on its lower-end offerings and never got back in the high-end game. Now, with the company talking about lower gross margins, there may be a real fear that those margins could be lost forever.

The good news, such as it is, is that the game is far from over for RIM. Motorola, now Motorola Mobility (NYSE:MMI), was written off as a has-been/never-will-be-again, but still managed to develop some appealing phones and get itself back in the game. Likewise, there were not too many predictions that companies like Samsung or HTC would contribute much to the high-end market. Better still, as Apple has shown over and over again, it does not require billions of dollars to develop an attractive product. What it really requires is creative and inspired engineering and design, coupled with management willing to support it. Time will tell if RIM has this.

The Bottom Line
For the here and now, RIM is likely to get treated like a piñata (and major suppliers like Marvel Technology (Nasdaq:MRVL) may get dragged down too). The stock looks cheap even on pretty bearish assumptions, but it will take patient and brave investors to step up ahead of real signs of renewed momentum. RIM is not doing as badly as the stock performance is going to indicate, but with the fear of a Nokia repeat weighing on investors' minds, it may not matter for a while. (For related reading, take a look at Dial Up Choice Telecom Stocks.)

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