RIM Has Now Doubled Off its Lows

Tickers in this article: AOL MSFT NOK RIMM
NEW YORK ( TheStreet) -- As of Tuesday, Research In Motion (RIMM) has now has officially doubled off its lows earlier in the year of $6.22.

It closed at $12.60, up 6% on the day. There was news that it had released the SDK for developers interested in building apps for the BB10 phones that will be released in February.

Investors are excited because they assume that if the new BlackBerrys sell well, the stock is extraordinarily cheap.

Yet, the bears on RIM who have been right since 2009, say the stock's rise is a mirage and it is doomed to retrace all its gains once it actually starts shipping. They say RIM is the new Palm.

I'm with the RIM bulls on this one -- and I have a long position, so I'm biased (although I was short for a long time from $70 to $20).

RIM isn't Palm.

Palm never really had an installed base. It had a "cool" phone according to the tech reviewers back in early 2009 with the Pre. Smart phones were just starting to take off in a big way and there really was only iPhone and BlackBerry at the time. (Back in 2009, Android was still way back in the rear-view mirror.)

So, the Palm Pre did look cool at the time. It had a cool interface. People began to dream how many units could be sold and at what average price. You don't have to sell too many into a huge global market that's growing like gangbusters to suddenly get to some compelling valuation numbers for Palm as a company.

That's exactly what happened as Palm's stock went from around $2 in January 2009 just before Palm announced the Pre to $16 just before the Pre started selling in June that year. Huge run. It actually makes the RIM run of the last few months seem puny.

And then came the crash in Palm's stock. That's what the RIM bears want to tell you is coming. The new OS is a mirage, they say. RIM's U.S. market share is so low now that no one is going to care about the new phones when they arrive. The Microsoft (MSFT) Windows 8 phones have been a bust for Nokia (NOK) .

But Palm never had 80 million subscribers globally like RIM. Of these subscribers, only eight million are in the U.S. RIM had 20 million US subscribers a few years ago and the smart phone market has doubled since then. So, RIM has certainly missed out on a golden opportunity in the U.S.

However, 80 million subscribers is still 80 million subscribers.

Imagine if you were one of these 80 million (I'm not). You've been laughed at and ridiculed for the last three years by your friends and family. Yet, you still like your BlackBerry.