Last week Research in Motion reported a less than stellar Q2 Fiscal 2010 and their stock price took pretty big stumble. Just last Wednesday RIM’s stock price (ticker RIMM) was up over $85. This morning it sits at $67.10.
I am not an investment professional nor do I offer any financial advise. I do wonder, however, with all the new BlackBerry devices about to hit the market, with OS 5 seemingly right around the corner, with the reduced prices on the high end prosumer devices and especially the lower end consumer devices, is Research in Motion ready for a run?
A lot of folks are saying that RIMs problems are all due to the iPhone. Although I agree that the iPhone has definitely made it’s mark on RIM, their biggest issue, in my opinion, is that they aren’t getting the new low end sub $150 devices onto the carriers with the most subscribers quickly enough.
What would RIM’s quarter have looked like if the BlackBerry 8520 also came out on AT&T and the 8530 on Verizon and Sprint? The days of dumb phones is all but over. Everyone now wants devices with keyboards that they can get to the web and easily check email on, but, not everyone is willing to shell out $200 – $400 for higher end smartphones.
BlackBerry devices enjoy exceptional user loyalty, so, if RIM is able to capture first time smart-phone buyers in the sub $150 market, they may be able to keep them as they upgrade to higher end devices in the future. There is no doubt that the iPhone is the biggest competitor to the BlackBerry here in the States, but, the iPhone is still exclusive to AT&T and the device is expensive. If RIM can seed all the carriers with inexpensive BlackBerry models by the time the holiday season gets kicked fully into gear, Q3 Fiscal 2010 may be a lot better than Q2.
That’s my opinion… What is yours…
Not looking like it….
Research in Slow Motion: The worst is yet to come
= The iPhone factor is just starting to effect RIM.
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Rob… I would take your point even farther and say that RIM, for the next two quarters, should focus on first time smartphone using consumers and try to get a BlackBerry into the hands of everyone even thinking about buying an inexpensive smartphone.
I think that there is more to it than just getting inexpensive BlackBerry devices out more quickly. Don’t let the name fool, you I’ve used a BlackBerry everyday for the last 8 years and until my BlackBerry Tour which had trackball issues, I really haven’t had complaints as a business user.
The BlackbBerry is not terribly consumer friendly. Leave out the iPhone… Compare it to the Palm Pre. For what most consumers use smartphones for, even, the Pre crushes the BlackBerry when it comes to the OS, the polish of the UI, browsing the web, and playing games, etc.
I can hear die-hard BlackBerry users saying to themselves that if they wanted to play games, they would buy an iPhone. Well, consumers do, and… they are.
If RIM really wants in on the consumer market, going after first time users with lower end devices is not a bad idea. Pulling the flash out of a BlackBerry Curve, in the case of the 8520, and telling the press that it is a consumer product isn’t going to cut it though.
Lets face it RIM has done things to bring this down turn on themselves. The failure to support other platforms than windoz is a big one. However now RIM has a even bigger problem on their hands than bowing to every wish of the four orifices. RIM’s OS and UI are being shown as way behind the times when compared to the current generation of smart phones out there. With the current generation of smartphones there are just too many things which the other devices can do and do well that the BB can’t do, or can’t do well. RIM and the others have been shown to be behind ever since January 9, 2007.
What planet are you living on? In this one, the Blackberry continues to sell extremely well. Last year in the quarter they sold 6.3 mln phones and this quarter they sold 8.3 mln phones. That’s a 35% increase! And then they guided to 9.2-9.7 mln devices for the current quarter. This is a huge jump. RIM is faring very well. No one matches a Blackberry as a communication tool for utility, efficiency, and battery life. The iPhone, Pre are very capable devices but shine if you want ancillary services such as games and fart apps. The truth is that most users buy a device for communication purposes first and everything else second. The Blackberry will fare just fine and be highly successful over the coming years. The stock is in a show me mode as the analysts got way ahead of themselves and upped the expectations to ridiculous levels and RIM delivered a perfectly decent quarter within every one of their own guided metrics. The only dissapointment was net adds at the low end of guidance but eps at the top end. So it will take some time for the analysts to lick their wounds and let their egos heal and you can bet they’ll be cautious next quarter and then RIM will come in over the top and the stock will levitate again.
Hmm. Just closed at 35.33. Down another 5 afterhours. I think the answer to your question is: “no”