RIM: Is the growth gone?

RIM: Is the growth gone?

Summary: Research in Motion may find its user base boiled down to hardcore loyalist customers and out of the mainstream smartphone market. Will all subscriber gains over the last two years churn off?

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Research in Motion may find its user base boiled down to hardcore loyalist customers and out of the mainstream smartphone market.

That's the biggest takeaway from Wunderlich Securities analyst Matthew Robison. He downgraded shares of RIM to a hold from a buy and cut his price target from $76 to $46. Given RIM shares are now below the $43 mark, Robison's downgrade would have much better $30 ago, but he makes some interesting points.

Among the key items:

  • RIM's subscriber gains over the past two years will churn again, leaving the company with a business user base. Earnings will decline after 2013.
  • PlayBook retail sales are mixed. "We believe the PlayBook continues to sell well relative to tablets other than the iPad, with minimal returns. However, shipment rates have waned since initial volume from those that had been waiting for it," said Robison. "There is little indication that the PlayBook has registered with consumers outside the loyal BlackBerry installed base."
  • RIM's next generation BlackBerry 7 products will stabilize the user base, which will upgrade. But the products won't woo iPhone and Android loyalists. BlackBerry will be a traditionalist brand.
  • QNX and other efforts to play catch up are a case of too little too late.
  • BlackBerry Enterprise Server (BES) will lose its mojo. BES has nice security features, but it's unclear everyone needs them. Robison adds:

Nearly two-thirds of subscribers may be satisfied by IT features that can be delivered without the BES control that is the core element of the BlackBerry franchise. It also means that for a similar portion of subscribers, the large volume of BES applications that have been developed by corporate customers and system integrators— typically quoted to be of six-figure magnitude; comparable to applications in the Apple App Store (iOS) or Android Marketplace—are not relevant. Therefore, for the two-thirds of the RIM service subscribers that may not have critical security needs, RIM must go to market with product features and an applications ecosystem that, in terms of innovation rate, have been disadvantaged by the extra effort required to support the security and control mandate of the core BES user base.

Topics: Security, Enterprise Software, Hardware, Mobile OS, Mobility, BlackBerry, Servers, Software, Wi-Fi

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37 comments
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  • Message has been deleted.

    bobegan
    • RE: RIM: Is the growth gone?

      Readers might be more interested in THIS article, which I published last week for The Motley Fool. Unlike @bobegan's "note," which is in reality a set of questions about RIMM and an offer to sell a research report containing the answers, The Fool article contains actual information, educated opinion, and speculation - and links to other relevant analysis.<br><br><a href="http://www.fool.com/investing/general/2011/05/20/rip-rimm.aspx" target="_blank" rel="nofollow">http://www.fool.com/investing/general/2011/05/20/rip-rimm.aspx</a>
      GDF
    • RE: RIM: Is the growth gone?

      @bobegan <br>RIM need to exit the handset market where they are directionless, and so far behind the curve on QNX, and concentrate their efforts on developing a BES App for iPhone, Android and WP7 to deliver their famously secure messaging ecosystem to any smartphone/tab device.

      Anything less than this is terminal decline to Chapter 11 within 5 years.
      neilpost
      • RE: RIM: Is the growth gone?

        @neilpost
        good christ your short sighted. you think no one but apple can come up with a great phone. (look at what happened in the last 3 years) Rim is actually smart bringing out the playbook to update and test for their new superphone. And if they come up with a playbook type phone I know I'll be buying it.
        fraze8888
  • So Long RIM

    Last time I used you was 2006 when all I wanted was to access my email, carry my music, and browse the web... oh those days still make me cringe, talk about a bad experience LOL

    TGFIPHONE..
    Hasam1991
    • RE: RIM: Is the growth gone?

      @Hasam1991
      I dont think apple even had a phone in 2006. quit writing crap. everyone in my office has a blackberry and will be buying the latest and greatest. apple has set the bar watch all competitors chase them down.
      fraze8888
      • RE: RIM: Is the growth gone?

        @fraze8888 The Iphone came out in early 2007 so how is Hasam writing crap? He said the last time he used a BB wass 2006. You keep mentioning Apple but Android is eating RIM's marketshare and RIM continues to lose their dominant position in the corporate and government markets.
        murving
  • Nokia

    What if Nokia/mango flops?<br><br>It's nice to talk about RIM failing, but the reality is they haven't made a major misstep, they're just struggling against strong competition.<br><br>But what if their major competitor chokes in the marketplace? Suddenly there a lot of opportunity there.<br><br>Nokia has sacked their developers, they did predict Symbian market share flat, with users witching gracefully to the WP7 phone..... but of course having told people Symbian phones are dead, nobody buys them and the graph is a steep plummet instead.<br><br>They've sacked their developers, the existing WP7 phone interest is minimal. What if Mango doesn't turn that around? They won't have development staff, they're be tied to a Zune.<br><br>So I wouldn't write off RIM yet, a failing Nokia would give them a massive boost.
    guihombre
    • RE: RIM: Is the growth gone?

      @guihombre
      No missteps, but who's buying their phones? most people I know that have BB are looking to iPhone or Android as next phone..
      Hasam1991
      • RE: RIM: Is the growth gone?

        @Hasam1991
        Most people I know who are serious about getting work done on the road or on the move are dropping their iPads and iPhones for Blackberries and Playbooks.
        Apple services, software and hardware are way to expensive in comparison and give little real value back.
        From the IT standpoint I can say I cant stand being tied up to the Apple Store. Its a retrograde service from the mainframe age. The only reason people ask for Apple products is because they think they're cool. That lasts as long as the first bills arrive.
        Blackberries let me work the way I want to with the service I choose and without having to report back to the manufacturer.
        Apple to me now reminds me of the monolothic and centric business model IBM imposed during 70s/80s. It was a comfortable situation for most but restricted choice. It's just a matter of time before this generation of users comes to the same realization and get Blackberries or Androids.
        SinfoCOMAR
      • RE: RIM: Is the growth gone?

        @sinfoCOMAR

        "Most people I know who are serious about getting work done on the road or on the move are dropping their iPads and iPhones for Blackberries and Playbooks."

        HAHAHAHAH! Thanks for the laugh. People AREN'T switching to blackberry. Loyalists are staying, and that's it.

        "From the IT standpoint I can say I cant stand being tied up to the Apple Store."
        And that's better than being tied to Blackberry enterprise server? Android and Apple phones support remote wipe and security settings from Exchange server, which is enough security for a majority of corporate entities. All without the outrageous fees to license BES.

        Unless RIMM truly innovates, they are done. RIMM missed their opportunity and will be nothing other than a footnote in history.
        NetworkBankAdmin
      • RE: RIM: Is the growth gone?

        @Hasam1991
        get real!
        fraze8888
    • RE: RIM: Is the growth gone?

      @guihombre: I don't believe you can discuss this without including the Android ecosystem (and its Gmail client and other free Google services) and iOS. It isn't so much about Nokia or Windows (whichever version) any more. A lot of people have moved on.
      GDF
    • If I had to worry for anyone it would be RIM

      @guihombre
      but the truth is both Nokia and RIM will do fine. RIM had a few misteps, but the Playbook looks like it should be a real player in the tablet arena, and Nokia did the right move going with WP7 as the OS as the better choice for long term strength, so both will be around for some time.

      Android is the one I wonder about long term.
      Will Pharaoh
    • RE: RIM: Is the growth gone?

      @guihombre very true http://www.nodepositonline-casinos.com
      mamanga
  • RE: RIM: Is the growth gone?

    Yes
    james347
    • RE: RIM: Is the growth gone?

      @james347
      RIM is slowly chugging along, which is actually much better than Moto, SE, LG, Nokia, HTC or SAM.

      http://www.asymco.com/2011/05/25/a-disruption-is-not-sufficiently-described-by-the-success-of-some-others-must-fail/
      Synthmeister
  • RE: RIM: Is the growth gone?

    In my experience, RIM makes the worst phones. The quality of them is just dreadful. I have returned numerous phones under warranty and the replacements fail quicker than the original. The only reason I still have one is that it has a physical keyboard and I can type better on that than a touchscreen keyboard.
    CowboyJake
    • RE: RIM: Is the growth gone?

      @CowboyJake ... I don't know where you are getting yours from, but I have had one for over a year now, switching from the Iphone 3GS, I know a rarity, and I have not had any hitches whatsoever. the phone has performed like a champ.
      striker67
    • RE: RIM: Is the growth gone?

      @CowboyJake My co-worker went through 4 BB's in under 9 months and finally came up for an upgrade and jumped ship due to the high rate of failures.
      rdawson@...