RIM: Canary in the enterprise spending coal mine?

RIM: Canary in the enterprise spending coal mine?

Summary: There's a bit of a tug of war over Research In Motion's prospects. First, Bear Stearns cuts RIM from "outperform" to "peer perform" in a move that's largely based on the theory that RIM shares are too expensive.

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TOPICS: BlackBerry
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There's a bit of a tug of war over Research In Motion's prospects.

First, Bear Stearns cuts RIM from "outperform" to "peer perform" in a move that's largely based on the theory that RIM shares are too expensive.

But the one notable item is that Bear Stearns analyst Andy Neff reckons that RIM will suffer first from any economic slowdown.

Check out the dance here. Neff writes:

"From a fundamental standpoint, we like RIM's outlook given strong demand for smartphones, RIM's business model (hw+sw+svcs) and its competitive position. In addition, channel checks indicate continued robust demand, with product launches (Curve/Wi-Fi, Pearl II) progressing on schedule."

From there, Neff even raises RIM's fiscal year earnings estimates. But Neff highlights some risks:

"While we have not seen any weakness in demand for RIMM, we're concerned about potential exposure to macro-related demand given high financial (30-40% of sales) and enterprise (75-80%) sales but small-ticket items are often affected first."

In other words, BlackBerry sales will be the proverbial canary in the enterprise spending coal mine. If RIM stumbles other enterprise technology companies could follow.

Neff may have a point since many technology companies sell heavily to financial services firms. And given that Wall Street layoffs are likely it's not clear that CrackBerries will be as addictive if your employer isn't paying for the devices.

Keep in mind that Neff's call is clearly in the minority here. Merrill Lynch analyst Vivek Arya said in a research note that RIM demand is strong and new Wi-Fi features on devices such as the 8820 are potentially a killer app for BlackBerry adoption.

For more BlackBerry information see Russell Shaw's blog and all ZDNet resources.

Topic: BlackBerry

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  • Pushback against CrackBerry...

    I know a lot of people who use a BlackBerry. Most use it as their primary mode of communication, both as a phone and as an email client. Many have dubbed their new appendage a "CrackBerry" because once you pick it up, you're hooked. Unfortunately, as with most hooked fish they eventually realize that they are being pulled this way and that against their wishes. That euphoria of being able to respond instantly to office emails from the crapper fades and becomes resentment at the constant invasions into personal life. Anyone who thinks cell phones have become more of a detriment than a boon to society had better hope the future isn't more devices like this. We'll be pining away for the days when the idiot in front of us was talking away on their cellphone when that same idiot is now trying to send an email. What I think is going to happen is you're going to see a general pushback against the proliferation of this type of technology. The workplace has intruded into the personal life enough that a movement is building to halt and eventually turn back that encroachment.
    jasonp@...