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Is it Time to Buy into Research in Motion?

In recent years, the once mighty Research in Motion (RIMM) has struggled to compete against Apple (AAPL) and Google (GOOG) in the highly competitive smartphone market, but so far has refused to admit defeat.

The company has placed a lot of hopes in its new Blackberry 10 operating system, and has confidently stood behind the upcoming update as the change that turns its fortunes around. Now, it seems as though the company is not as confident in its own future. It has been exploring its strategic options for the better part of a year now, and over the weekend the company's CEO, Thorsten Heins, reported that following the Blackberry 10 launch the company would consider selling its hardware division, and licensing Blackberry 10 to other hardware manufacturers.

Of course, in order for RIM to find someone to license Blackberry 10, it first has to prove that Blackberry 10 can be a success.

The possibility that the company could sell its hardware division, and license out Blackberry 10 has helped push the stock up over 9% today, but investors need to be careful. While it is possible that Research in Motion could use these strategic moves to bring value back into the company, it could also be seen as a company that is clearly in trouble.

My personally opinion is that investors should steer clear of Research in Motion. While Blackberry users are very passionate about their phones, Research in Motion just has not proven that it is able to compete in a world dominated by iPhones and Android powered smartphones.

At one point Blackberries were the phones to own, but that is not the case anymore. No matter how nice Blackberry 10 turns out to be, there is no way that Research in Motion will ever be able to win back enough of its lost customers to return the company to its previous glory.

This is definitely one stock I would keep out of my portfolio.

Disclaimer: The author of this article has a long position in Apple (AAPL).

Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.