The PlayBook hasn't been launched yet, but from the early so-so reviews you can already sense that it won't coincide with crazed consumers forming long lines outside Best Buy at midnight.
This is disappointing to say the least. It reinforces the impression that Research In Motion Ltd. has fallen behind in the wireless communications market and might have pushed out its much-anticipated tablet computer before it was ready.
Investors who hate risk and fear companies that aren't attracting rave reviews among consumers and analysts will no doubt stay away from RIM. For more intrepid types, though, this is a very interesting stock.
RIM's share price has slumped 24 per cent since mid-February, putting it back to levels seen five years ago and reflecting some pretty glum prospects for the PlayBook. The shares now trade at a mere 8.4 times trailing earnings, which is exceptionally cheap for any company – and particularly for a company that continues to produce record-high earnings and sales nearly every quarter.
Naysayers will argue that the company has lost its edge and that the only tablet computer anyone would ever want to buy is Apple Inc.'s iPad. So, the only sound investment is Apple.
This argument should be turned around: Why would anyone want to invest in a market leader, given that leaders tend to have the most to lose from rising competition and dashed expectations?
In 2008, RIM was the market leader in wireless communications, with a rock-solid hold on the business end of the market with its unassailable BlackBerry devices. The shares then traded at a high of nearly $150 and commanded a price-to-earnings ratio of about 54.
This era of high expectations and popularity turned out to be a terrible time to invest in RIM, though, given that its shares have fallen about 65 per cent since then.
Is now a good time to invest? Well, if you liked RIM at $150, you should love RIM at $52: The company's quarterly profits are up more than threefold on a per-share basis, it has diversified beyond the BlackBerry and it might have the most to win if Apple's grip loosens on the market for tablet computers.
It is never easy to buy when everyone else is booing. But it sure is more profitable.