RIM has its head in the sand and is delusional..
Analysts had a field day on Friday after RIM released its less than stellar Q2 earnings on Thursday. When addressing its future prospects, RIM warned that its gross margins in the Q3 will drop another three percentage points to 47% and that a further decline is likely into 2010. Ouch! In a letter sent to clients, Charles Wolf of Needham & Co had the most scathing assessment of RIM:
In their conference call, management dismissed the notion that new competitors, most notably Apple’s iPhone 3G and new smartphones running on Google’s Android platform, would materially slow the growth in new subscriber activations. We continue to believe that the company has its head in the sand. Yes, the iPhone and Android phones will expand the market as they lure mobile phone users to smartphones. But we believe it’s delusional to think they won’t cut into BlackBerry sales as well, especially in the consumer market.
Did he just call RIM delusional and say they had their head in the sand? Yes, indeed he did. The not-so-rosy forecast for RIM had an effect as its stock fell 28% by days end. Yikes, looks like RIM is suffering the consequences of venturing out of their comfortable enterprise market and entering the highly competitive consumer market. Congratulations, RIM, you just got your first royal smackdown!
Disclosure: I’m eagerly awaiting the Storm on Verizon.
Sux that they took such a hit, but I am still waiting for the storm to hit Verizon….Maybe they can come to market with this thing earlier then November and rebound from this ass kicking the stock took
Wow, little biased there aren’t you Kelly? Or are you in denial?? Surely you didn’t show this quote from the piece–> ” He notes that the downgrades reflect a fundamental change, with the industry “entering a more difficult phase,” with consumer and enterprise growth slowing”
Which shows the industry as a whole slowing. If I can remember correctly, Apple hasn’t been doing very well lately either, but we don’t see that plastered up here. True journalism is definitely not your strong suit. Maybe you should see if you could get a job with MSNBC…
The people who continually prop up the iphone as the bb killer are the delusional ones.
Apple has a great product and its been successful so far but….
They have a single form factor phone
They are on a limited number of carriers
Like clothing people have different tastes and when it comes to something as personal as a phone who here believe that everyone is going to want the same style that everyone they know has? They’re not and its as simple as that.
No amount of fanboy cheering is going to change that.
Apple will do quite well and Rim will continue to do well. The idea that one is going to decimate the others market share is ludicrous. The fact of the matter is that they are both going to devour moto and palm market share for dinner and have a little desert on behalf of Nokia
If there is a slow in consumer and enterprise sales I think the least impacted would be RIM. Why would enterprise be more likely to go with Android and an unknown OS..
Consumer market is a little different. If RIM can continue to be innovative with the Pearl (remember when every 12-29 year old wanted one) and anticipated products like the Storm/Thunder they will be ok.
At one point I thought they were becoming complacent which I no longer believe to be true in which case the company will continue to thrive..
Now with that being said Wall Street can suck ass. They are picking on a company that had an increase of 62% in revenue.. In my world that is okkkkkk
RIM will be fine. Let the analysts talk whatever trash they like cause it makes for a great time to purchase their shares!!
wow the more I read this site it seems as though is just fanboys for Apple…..
RIM and Apple should be able to compete and grow for the most part without stealing customers from each other. There are tons of places to poach people… Palm, Moto, Nokia, etc.
Posted from BGR Mobile on iPhone from: New York, NY
“Yikes, looks like RIM is suffering the consequences of venturing out of their comfortable enterprise market and entering the highly competitive consumer market.”
Did you just try to summarize RIM’s situation, which is actually terribly inaccurate and underplays the fact there’s a country (and world wide) consumer recession, with a poorly under thought one-liner? Someone mind getting this girl a copy of the WSJ, please?
P.S. Stop adding “disclosure” if you have no idea how to use it properly. If say you held a short position on RIM via stock or option, you’d disclose, not that you’re excited about a product release.
Honestly, you’re off to a very poor start writing for BGR. Step it up.
Funny, I have heard RIM is going down when Palm started releasing phones, then Windows mobile, the first Iphone and so on and so on..
Guess what? Doesnt seem that has or is going to happen.
If I had any spare money laying around I would BUY RIM now, that 28% decline will be erased in a month.
Kelly, are you related to BoyGenius? Or is this an alias of BoyGenius? When are we going to hear about all the thousands of people pissed at Apple about the 3G Iphone? Never. Why, because this is a pro-AT&T/Iphone site. You have no business talking about Verizon or CDMA related news.
Let’s take a look at these disappointing results:
Q2 Net Income of $495 million, that’s up 72% from a year ago.
Q2 sales of $2.58 billion, up 88% from a year ago.
Um, yea, Kelly – dismal results indeed. Something you need to learn Kelly, is the difference between poor results and missing expectations. RIM’s stock is down because they missed earnings expectations by a penny, not because their results suck. In fact, even with the added competition of the iPhone this has been by far their best quarter ever! It’s just that analysts expected a penny more.
The second thing is forecast earnings. Now if you bother to read their results, you will see that they revised their margins down for two reasons:
1) To spend MORE on R&D so they can launch more devices. Kelly, is that a bad thing?
2) To spend MORE on consumer marketing, because they are launching no less than four brand new devices. Kelly, is that a bad thing?
So, RIM is down because for short-term traders, lower margins is bad news. For the long-term health of the company, heck, the results couldn’t be better.
Oh, and about your disclosure – yea, sure, based on your article on the Storm yesterday, I don’t think anyone believes you are waiting for it.
Good ole’ corporate America again.
I wish I had the time to do a little investigating of Needham & Co and see what comments they made over the past few years about other companies, namely, large investment and banking firms in the United States that have now gone under.
Hrm…
IMO, these large companies need to STFU about everyone else and make sure they have THEIR shit in a row so that we (the taxpayers) aren’t having to send them a check in order to bail their company out because THEY can’t make decent decisions.
And I must admit. I am not sure who “Kelly Hodgkins” chick is, but since coming onto the site, she has done nothing but posted biased opinions, most of which are completely inaccurate, and IMO, damaging the credibility AND professionalism of this site as well.
Too bad there isn’t a way that I could put a filter on all the posts that she creates so that I can get back to the main reason why I started visiting this site in the first place.
Disclosure: Kelly needs to be sent on her merry little way.
Google’s Android will become what Linux has on the desktop – lots of high tech tinkerers will gravitate to it (and probably hurt Windows mobile) but the average laymen who walks into a store looking for a smartphone will gravitate to iPhone or Blackberry as it is fully supported out of the box and they are trusted brands. The analysts all got ahead of themselves and are kicking RIM’s stock in the teeth because they were wrong and are pissed. Am I the only one who listened to their last conference call where they telegraphed margins? The analysts ignored this. Also, Jim said that this is not a head to head against other smartphone makers, it’s a land grab amongst converts to smarter devices. Time will show that not only isn’t RIM’s head in the sand, the recent margin issues will be forgotten when they are selling 50 million devices a year…
Bottomline is that you get the opportunity to buy a great growth company
at a cheap price.
Lets hold off on telling RIM to stay out of the consumer market until their most ambitious consumer phones to date hit the market. The Storm and flip Pearl aren’t even out yet, and your pretty much implying their the reason RIM stock is falling. RIM stock plummeted because their earnings report for the last quarter didn’t stack up to forecasts. Now how could that be? Could it possibly have something to do with the Bold situation with ATT and Rogers?
I wish I had money to spend as I would definitely invest in a stock that is obviously going to rebound with the release of 3 new phones. FYI….many analysts were saying buy buy buy even when the stock was in the $95-100 range.
To quote Boiler Room:
“IF I liked it at $95 then I love it at $70.”
man when the author of an article get the smackdown from the boy genius himself, thats bad…
LOL!!
So are you getting paid to write for this blog because if you are that’s pretty sad.
Articles like this are exactly why the news world views blogs as such a poor resource of information.
It’s not just competition (though I’m sure they are aware that it exists), it’s the economy too. Where I work they are reviewing everyone with a Blackberry and whether or not it is essential, and this is happening at a *lot* of companies. That hits right at RIM’s bread and butter.
@jayjay… Boiler Room is a great flick.
@everyone… what’s with the Kelly hate? She’s just reporting what the analyst had to say, which I thought noteworthy given the pretty scathing words they had for RIM.
Its a blog people, she posts stories and adds her opinion. If you haven’t gotten that yet then its your own stupidity.
I agree with BG, the 3 bigs will continue to take users from Palm, Moto and Nokia.
CORRECTION!!!!
Your truly out to say anything negative about RiM. did you think writing a disclosure will make people think that you don’t hate RIM? This site just f**king loves to say anything negative about every company except the ones you work for.
BG and staff–Your weekly paycheck is waiting for you to pick it up from AT&T and Apple.
You guys should receive the award for bashing any new Blackberry phone that comes out
i think now would be a good time to release the bold lol
i could writ better stuff i don’t play favorites.
the anaisis is a bit biased there.
@Mike
Yikes, looks like RIM is suffering the consequences of venturing out of their comfortable enterprise market and entering the highly competitive consumer market.
This is what caused the Kelly hate on this post. How can you say they are suffering from entering the consumer market. Please note how many tweens and people who really dont need a Berry now have one.
Its not a matter of her giving her own opinion cause I think thats cool but if youre going to give an opinion on a Blog like this one make sure what youre saying makes some damn sense…..
Kelly, are you related to BoyGenius? You sure sound like it or maybe you’re just having your period right now?
such anger in the comments like she is personally insulting you, get over it.
Gal, everything you ay is biased or idiotic so no.