“Head in the Sand”? That’s a Euphemism, Right?
by John Paczkowski
Posted on September 29, 2008 at 8:41 AM PT
iPhone is launching in one carrier in one country. We’re in about 100 countries and 300 carriers. … The momentum we are seeing in terms of product launches, carrier support in terms of product launches of BlackBerries, and subscriber additions is exceptional, and we believe it will continue on into the second half of the year.”
– Research in Motion Co-Chief Executive Officer Jim Balsillie, June 2007
Looks like somebody’s got a case of the Mondays–Research in Motion. Shares in the company slipped more than 6 percent to a new 52-week low today. This after charting a new 52-week low last Friday driven by the 27 percent drop RIM took after it issued a lower-than-expected forecast for the current period. That decline was the company’s steepest in eight years, belying CEO Jim Balsillie’s claims that emerging competition from new handset makers isn’t undermining its competitive position. And though RIM’s product roadmap is relatively strong heading into the fall season, the company still has its work cut out for it scrapping with Apple (AAPL) and its iPhone and now T-Mobile (DT) and the Android-based G1.
“RIM’s business model is starting to show its pressure points. The company has become increasingly dependent on hardware sales. As a result, the timing of new product launches can have a big impact on their results,” wrote Brian Modoff of Deutsche Bank in a report. “We think this trend will only worsen and their numbers are now, more than ever, dependent on a steady stream of hit products.”
Needham and Company analyst Craig Bisagna was even more dubious of prospects for Research in Motion (RIMM), criticizing the company for its foolishly dismissive attitude toward new rivals. Just because Windows Mobile handsets haven’t proven themselves worthy competitors to the Blackberry doesn’t mean the iPhone or the G1 won’t.
“We continue to believe that the company has its head in the sand,” Bisagna said in a note to clients. “It’s delusional to think [Apple and HTC] won’t cut into BlackBerry sales as well, especially in the consumer market.”
Comments
It would be good to see how stocks for competitors have been going. It’s not like the stock market at this point is an indication of a company’s prospects in the near term.
Having said that, I’m dumping my Blackberry the minute I can for an iPhone. My contract runs out in November. And on the day after it runs out, I’m getting rid of this phone which has a ghastly web browser that locks me into “special” websites and not the full Internet, and which drives me to T-Mobile’s websites and not the websites I need.
As for the email? It’s a pain to use. URLs wrap to make up the whole screen! Who could possibly think email should work like that?
Posted by Eric Welch at September 29th, 2008 at 9:05 amJohn – I know that your job is to “poke fun at the tech industry” and I know that the Needham analyst served up a colorful quote (gee, I wonder if he thought that might get his name in the blogs and newspapers), but is this really the best you can do on a day like this? I’m long on RIMM and I hate the volatility as much as anyone, but repeating this type of misinformed trash talking isn’t helping anyone. I read the Needham report and I listened to the RIM conference call, and I think it’s clear that the Needham analyst wasn’t paying very close attention. Believe what you want about whether RIM’s pricing strategy is designed to catalyze adoption and whether their elasticity theory is sound, but give me a break with the sky-is-falling competition routine. Since when is this a zero-sum game? Try talking with people who actually understand the wireless market. Too many people think in binary terms and buy into all the hype. Trust me, the analyst will get paid talking it up and down and up again and the little guy will get screwed trying to time the market, but us RIMM longs have done just fine even with the volatility. By the way, Apple’s stock is down too, so I guess that must mean that Nokia or Moto or Palm is eating their lunch! Whoops, they’re all down too. Oh well, I can’t explain it, so I’ll just find someone that says something colorful and run with that. Yeah, that’s the ticket!
Posted by Bill Carlin at September 29th, 2008 at 1:52 pmPoint taken, Bill. That said, RIMM has dominated a market in which there are few worthy rivals — at least in enterprise. That’s now changing, and quickly. Which isn’t to say that there’s not plenty of room in the market for everyone, just that RIMM’s going to have to have to work a bit harder to retain its piece of it. Finally, Balsillie’s hubris is just silly at this point. He shouldn’t underestimate Apple’s or Google’s (Android) power to sway consumers.
Oh, and here’s that broader market piece you were looking for:
http://digitaldaily.allthingsd.....-week-low/
Stay well,
J
Posted by John Paczkowski at September 29th, 2008 at 2:40 pm