“RIM reported a fiscal second-quarter profit that exceeded estimates but it sold fewer phones, signed fewer subscribers, and made less revenue than expected,” Ray reports. “The results confirm some of the worst fears expressed by this column on June 19, namely that Research in Motion’s once high-profit margin business has collapsed permanently as smart phones have gone mainstream.”
Ray reports, “RIM failed in the quarter to deliver the kinds of volume expected by analysts despite falling prices for its wares. The company sold 8.3 million BlackBerries, below estimates for 8.5 million and added only 3.8 million subscribers, fewer than expected. The average selling price of the BlackBerry is expected to drop again this quarter, to $320, below estimates of $340. Margins will come under pressure because the company has been shipping cheaper phones such as the Curve 8520, but it will have higher manufacturing costs as it rolls out expected revamps of the high-end ‘Bold’ and the touch phone ‘Storm.’ It will only become harder to not lower prices with the $99 Apple iPhone showing up increasingly on episodes of House and 30 Rock, further swelling the Apple hype machine.”
“The second leg in RIM’s troubles could come if RIM’s network strategy fails to play out. For some time now, RIM co-CEO Jim Balsillie has contended that as data traffic rises on networks, RIM will be in the pole position because it can shoulder the cost of increasing capacity,” Ray reports. “But that proposition won’t mean anything if RIM can’t offer the phones people use to stream video, download applications, and, eventually, engage in videoconferencing.”
“Three things could help RIM: a takeout by a larger company with smart phone ambitions; RIM’s own acquisition of Palm; or new employment for millions of stock brokers, which would boost RIM’s enterprise sales,” Ray writes. “Take a bet on all that if you will. The fundamentals speak for themselves, and they only suggest that business will get tougher from here on out.”
Full article here.
Sounds like Jim Baldsilly should focus less on buying a hockey team…..and more on saving his sinking ship company.
ahhhhhhh ha ha ha ” research in sloe motion” tooooo funny !! I love it!!! I phone got the game on lock creating good compettion HTC android second best phone.
Everybody wants an iPhone. Even Blackberry users. And RIM executives too, I imagine.
The writings on the wall for RIM. However, competition is good to have. It keeps apple pushing forward and on it’s toes.
I know from a company perspective (@75000 worldwide), we’re piloting the iPhone for Execs, our Sales Force and general users. We’re currently a Blackberry shop, mostly because if its integration with Outlook. That has changed, however, with the iPhone’s new capabilities in OS 3. The iPhones, of course, are a huge hit, especially with in-house applications being built and tested for our Sales Force.
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Being that I joined the company when we were still all Mac, (they made a horrendous changed to WinTel in ’97), I’m ecstatic about the company seeing the light and “finally” coming around to address its mistake 12 years ago
RIM really needs to address the shortcomings of their OS. It’s not very good. Maybe they’ll buy Palm and use WebOS as the foundation for the next-gen Blackberry devices.
I reckon that Apple inc. is employing aliens rescued from area 51 or is it 52? to inject extra terrestrial technology into Apple inc. products!!!! Was there a Star Trek film to that effect?
I mean Apple are so far ahead in research & technology you could say that there scientists are living in the future, loook at what they have offered to Intel on a silver platter and how long it took Intel to wrap their heads around what they have been given?
You know things are not sunny in Blackberry land when Verizon has Storms BOGO @ $49. That’s gotta hurt. The App store that they have is a confusing POS as well.
Trouble is if RIM but Palm it will be obvious that they are in a woefully weak position.
Analyst’s need to go the way of lemmings and plunge over that cliff.
“Three things could help RIM…RIM’s own acquisition of Palm…”
Using your Palm for a RIM job sounds like an uncomfortable proposition.
Yeah, what a horrid quarter RIMM had – “only” 8.3 million units sold and “only” 3.8 million new subscribers. Yeah, wow, that just sucks. I don’t know of any company that can survive on that kind of sales and growth (rolling of eyes).
“Apple iPhone showing up increasingly on episodes of House and 30 Rock”
Huh? House’s phone is a POS …
@ mike
season opener has House’s friend, Dr. Wilson, talking to him on an iPhone 3G. It was in a case, but those of us that now the Iphone spotted it right away. When House returns to work in the next episode, it will be interesting to see who else is sporting an iPhone.
In all fairness. +8M phones sold is not bad. 3.8M new customers is not bad neither.
rim had very good numbers. are these writers nuts? 8,3 million phones! these inflated “expections” of clueless analysts have become dangerous to companies. wall street is hurting businesses and investores with these games. regulators have to hold these analysts responsible for their merciless manipulations of public expectations.
Boris Karloff stars in the horrifying film “The Bloodbath of the Blackberries”.
Jill – Where’s all the blood coming from?
John – IT’S DRIPPING FROM THE KEYBOARD!!!
Jill – Screams in terror.
It will keep you on the edge of your seat.
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(gee, Halloween’s only a month a way)
RIM buying Palm would be just fine – if they want to go down the toilet into oblivion together…
@Jamboy – look more carefully than on the face value of those numbers and you’ll begin to understand why things do not look so bright for RIM.
The iPhone starred on Dolllhouse too–Ballard was watching the news on it (somehow) and making calls. I hope it survived his beatdown-of-the-week.
@HMCIV “Using your Palm for a RIM job sounds like an uncomfortable proposition.”
Grow up.
I for one can empathize with RIM’s stockholders. RIM’s numbers are positive, showing significant growth – 45%, and the company has met it’s guidance. However because future guidance hasn’t met some ANALysts expectations, the stock tanks. It’s not like they are losing money.
Gee, if I could only place where I’ve heard this before. This sounds very familiar. Where have I heard this before?
Peace.
RIM reported a fiscal second-quarter profit that exceeded estimates but it sold fewer phones, signed fewer subscribers, and made less revenue than expected,”
That’s right. “Than expected”. RIM beat their own guidance.
This is the same stupid hysterical posturing that analysts blast Apple with. It’s unwarranted when they do it to Apple, and it’s unwarranted now.
For Apple to succeed does not mean every other manufacturer must suffer. No one should be giving aid and comfort to these hedge fund shills.
“In all fairness. +8M phones sold is not bad. 3.8M new customers is not bad neither.”
In all fairness this is exactly how ujninformed investors get clobbered in the market.
The smart phone market grew 27% year over year, the Blackberry didn’t come close to that. That means the market is moving away from the Blackberry in favor of its competitors. Further, the only way RIMM increased earnings was from massive cost cutting efforts. They did not come from increasing top line sales or by increasing gross margins.
Top Line Sales Down
Gross Margin Percent Down
Average Sales Price Down
Unit Sales Growth Did Not Match Industry Unit Growth
These are all clear signs that the market is rejecting RIMM’s offerings, and that portends a very disagreeable future for RIMM.
RIM and Palm need to start thinking about how they are going to survive with extremely reduced market share numbers (kinda like Apple in the mid and late 1990’s ironically enough). Otherwise, they will both go under or be bought.
Maybe make a line of relatively nice and cheap non-smart phones?
You sir are an idiot. Let’s see:
Revs UP quarter over quarter and about 40% from a year ago
GM UP a point
Device shipments? Well, if the industry grew 27% year over year and rim shipped 6.1 mln devices in the same quarter last year and 8.3 mln devices this quarter, what kind of growth is that?
Try 37%!!!! So RIM actually BLEW OUT industry growth. These are just hard numbers there sweet tits. Might want to do some research before writing stupid things.