Expectations for RIM's performance called 'overly pessimistic'
Summary: Is there room for RIM's BlackBerry operating system in a mobile space dominated by two players? One analyst believes that expectations may have gotten "overly pessimistic."
How is RIM, the beleaguered makers of once-coveted BlackBerry handsets, doing? Analysts' crystal balls appear to be malfunctioning, resulting in a rift between those who think the company is toast, and those who think it has a chance.
However, given the rally in share prices over the past few weeks, one analyst believes that expectations may "have gotten overly pessimistic."
According to Sterne Agee analyst Shaw Wu, the recent 30 percent rally could result in "upside surprises" given the "overly pessimistic expectations" that analysts, Wall Street, and pundits have had with regard to the company lately.
With this in mind, he is predicting $11.3 billion in revenue and a loss of $1.05 in earnings per share for the 2013 fiscal year, compared to the consensus estimates of $11.1 billion in revenue and a loss of $1.26 in earnings per share.
See also: Is Android too hard for the average user to figure out?
Another upside is carrier interest in the platform, which seem to be hedging their bets.
"Carriers are growing increasingly leery with the growing dominance of iOS and Android," says Wu, "and have been looking for a viable third or potentially fourth platform with the hope that either BB10 and/or Windows 8 takes off."
But it's not all good news. Wu is concerned that RIM has been able to hold on to a $2.3 billion cash balance despite big operating losses through, "changes in working capital and its conversion of accounts receivable."
"It is not clear how sustainable this is as this is an accounting maneuver as opposed to an improvement in its fundamentals," writes Wu. He also has concerns about whether there's room for another mobile platform, questioning the need for, "a third or fourth mobile OS touchscreen platform," and whether there is enough to differentiate what BlackBerry has to offer from iOS and Android.
"To us, it's not just the number of apps, but the quality of apps and whether developers are making money and customers are using them," concludes Wu.
Analysts seem to be undecided as to where RIM is headed, but ultimately it all rests on whether users -- both consumer and enterprise -- are willing to look beyond Android and iOS and put their faith in RIM to deliver solid hardware backed by a robust ecosystem.
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Talkback
re: 'overly pessimistic'
Analysts have been dead wrong for a year now on RIMM, why listen to them now? These analysts are more concerned with manipulating the stock price to cover their terrible $5-10 stock price targets rather than giving legitimate analysis, guess we can expect more of the same as long as people are gullible enough to listen to them.
Overyly Pessimistic..
RIMM has not helped itself with losing money for the first time in a long time, sliding sales, releasing a relatively unknown OS, delays in the OS, breakdowns and outages in their BES Services, and also coming out with a phone that is not managed by many of the new MDM's.
Could the possibly recover yes. Sure, do I think it's likely not really. It's funny how blackberry went from something cool with employees to something spoken with disdain.
Really?
Dream on John.
http://bits.blogs.nytimes.com/2012/11/28/rims-market-share-slips-some-more/
"Shortly after some stock analysts raised their ratings for Research in Motion, a new market share report showing that the company’s once iconic BlackBerry brand now holds just 1.6 percent of the American smartphone market sank expectations for the company.
A year ago during the same quarter leading up to the end of October, the Kantar Worldpanel ComTech report estimated BlackBerry’s share at 8.5 percent."
8.5% market share in 2011...1.6% market share in 2012. Yep...no correlation to the share price & market share here.
October 6, 2011 RIMM share price? 24.42. October 5, 2012 share price? 8.22
As of this posting? 11.52.
The WHY
Configure your BES properly
They also have a new MDM that can use EAS or harden it if needed. Considering the growth of other MDM solutions it seems the majority of companies are running a BES+1 model. The problem is these other solutions cannot match BES and are double the price. Basically all these other MDM's are a patch work of API's thrown together with no consistency across mobile platforms due to limited API by Apple, Android and Microsoft.
RIM seem to be doing the right things
1. The applications on a Blackberry 7 are all integrated unlike that of iPhone. I know coz I also use an iPhone as a back up phone. e.g. I read an article on another application and want to share it on Facebook requires me to setup my account again on some iPhone setting. Whereas on a Blackberry it is just seamlessly shared.
All information and updates of my contacts e.g. facebook, Linked-in, Live Msger, Yahoo Messenger, Tweeter, BBM, SMS, emails, etc are all easily accessible from my phone book. This is not possible on iPhone.
2. If BB 10 is also as integrated as the os7 then it is on the right track.
3. RIM is focusing on allowing the developer to earn a higher portion of the sales of the app, this will create a much higher incentive for developers as compared to iPhone App developers.
4. BB 10 will be able to use almost all Android apps, will create a wealth of applications for BB10.
5. RIM is also open to selling these devices in significant markets outside that of the US. This is a very strategic move as the US market continues to be more and more insignificant in the near future.
6. The Blackberry 7 Universal search function is far superior to the iPhone Search function. To know what I mean you have to try it.
Go RIM!
Pessimistic? October? You need to get updated info guys! RIM is going UP!
http://www.bloomberg.com/video/morning-movers-dell-facebook-rim-yahoo-ZULMhuqsRqWUPq5i00X43g.html
Byron Capital raises target on Research in Motion to $14
http://www.cantechletter.com/2012/11/byron-capital-raises-target-on-research-in-motion-to-141128/
And then he goes and spoils it all by saying something stupid.
Yes, we all know the fundamentals will not improve until the new phones come out. And what is wrong with getting rid of old inventory and getting people to pay you what they owe you?
As long as RIM has enough equity, (money and, if need be, property) then they will launch and we will see then if people accept them as an alternative to the other 2 or 3 current OSes.
"..."To us, it's not just the number of apps, but the quality of apps and whether developers are making money and customers are using them," concludes Wu..."
Is this a knock against BlackBerry 10 app count or the other systems, who have 1,900 flashligh apps and 400,000 apps that have never been downloaded? A little unclear.
Execution
"Another upside is carrier interest in the platform", year right.
Carriers go where the consumers go. The iPhone on Verizon and Sprint proves that. While I'm sure the Carriers would prefer that no be so, the fact that they fall all over themselves to pay Apple's subsidy demands and adhere to their client relationship demands shows that reality is something different. If either the Carriers or RIM think that the vast majority of those ex-Blackberry iPhone users will return to the fold then they're in for a rude awakening. Even if BB10 is as good as iOS whatever when it arrives, many of those ex-BB users will have substantial ecosystem lock-in.