SAN FRANCISCO (AP) -- Research in Motion Ltd.'s stock rallied Monday on hopes that the BlackBerry maker will be able to build on its recent momentum to mount a more serious challenge to Apple Inc.'s iPhone and rival mobile devices running on Google Inc.'s Android software.
THE SPARK: The stock gains came after investors had more time to digest RIM's most recent quarterly results, which were announced on Thursday, the final day of stock trading last week.
The quarterly numbers offered signs of hope as well as distress. On the plus side, a new Blackberry model got off to a solid start in sales, helping the company post a profit that hadn't been anticipated by industry analysts. But the company also lost about 3 million subscribers in the last quarter, signaling the company is still losing market share to the iPhone and Android-powered phones made by Samsung Electronics and other handset manufacturers.
THE BIG PICTURE: Investors snapping up RIM's stock Monday evidently believe the Canadian company's positives will outweigh its negatives as it converts more users to its new BlackBerry 10 software. The redesigned the operating system has the multimedia features, Internet browsing and apps experience that have been staples on the iPhone and Android devices for several years. The BlackBerry Z10, the first RIM device running on the new software, was only sold in international markets in the past quarter. The Z10 is now being sold in the crucial U.S. market.
Another new model with a physical keyboard, the Q10, is expected to be released in international markets next month, although it might not be available in the U.S. until June or July. That delay opens a window for Apple and Android device makers to win over longtime BlackBerry users tired of waiting for a more dynamic smartphone.
The rise of the iPhone and Android devices is the main reason that RIM's stock price has plummeted by more than 65 percent from its levels six years ago. The company is punctuating its faith in its revamped product line by changing its name to BlackBerry. That proposed switch still needs shareholder approval.
THE ANALYSIS: In Monday research note, Wells Fargo Securities analyst Maynard Um predicted RIM will sell 3.5 million BlackBerry 10 phones in the current quarter ending in early June. He previously had projected 2.5 million BlackBerry 10 phones would be shipped in the period covering RIM's fiscal first quarter.
He also expects a smaller loss of 7 cents per share rather than 22 cents per share for the entire fiscal year. Analysts polled by FactSet had expected a loss of 47 cents cents per share late last week. After the release of the most recent quarterly results, they now expect profit of 10 cents per share for the year.
SHARE ACTION: RIM's stock gained 61 cents, or 4.2 percent, to $15.05 in afternoon trading. The shares have ranged from $6.22 to $18.32 in the past 12 months.