Research in Motion reports its fiscal third quarter results Thursday and the big question will be: Can RIM keep up?
Financially, RIM's third quarter will be solid on the surface. Wall Street is expecting earnings of $1.04 a share on revenue of $3.78 billion. Gross margins are expected to be 43 percent. For the fourth quarter, RIM is currently expected to report earnings of $1.19 a share on revenue of $4.24 billion.
Caris & Co. analyst Robert Cihra lays out the landscape.
iPhone/Android competition is real and RIMM needs to keep pushing its software development further/faster beyond core messaging...Our own fieldwork shows iPhone starting to have a real impact in enterprise IT accounts and especially their “future plans,” with PUSH from Apple sales but also now carriers’ own enterprise/biz accounts teams and third-party software/integrators, catalyzed by simultaneous PULL coming from customers.
Other analysts see a lot of challenges ahead. The biggest issue: RIM is in an increasingly competitive space and will see market share and pricing problems ahead. Without innovation, RIM could wind up playing a lot of defense and become a commodity player.
Phil Cusick, an analyst at Macquarie Research, said in a research note:
In 2010 we expect RIM's developed market consumer smartphone share to see continued challenges from players like Motorola, Palm and Apple, as iPhone exclusivity fades, and to hear increasingly about Nokia's consumer email solution pressuring RIM's growth in Europe and Asia.
The elephant on RIM's conference call will be competition and how the company plans to address it.
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