Expect RIM Turnaround in Back Half of 2009 - UBS

BlackBerry maker Research in Motion Ltd. (RIMM) has suffered from investors expecting slowing revenue growth and competition from Apple (AAPL), Palm (PALM) and Google (GOOG), but that may change with a slew of new product launches in the back half of 2009 and an aggressive advertising push from Sprint (S), UBS says.

Phillip Huang, UBS analyst, said in a note Monday:

We believe RIM’s revenues are — unsurprisingly — being impacted by the economic slowing. However, despite this, RIM continues to see strong top line growth.The back half of the calendar year should also see more BlackBerry launches with the Storm 2 at Verizon Wireless (VZ) in October and the 8520.

Of even more interest is a commitment from Sprint to push the new BlackBerry Tour when it launches in July, at about the same time as Verizon Wireless.

Sprint has historically lagged behind Verizon by about six months in product launches, but has promised certain unit volume sales to RIM to secure a launch at the same time, Mr. Huang said.

Sprint, of course, also recently debuted the Palm Pre to much fanfare. UBS figures the Tour will go for $199 at launch.

As well, UBS is predicting an optical trackpad in place of the physical trackball for the upcoming Curve 8520, which may lead to less warranty accruals long term and therefore stronger gross margins.

In any case, Mr. Huang maintains his Buy rating and $90 target price.

Comments

[JamesApple]

In the past when Rim was the only enterprise phone in the market, Rim sales would rise and fall. But now that the market is loading up with Apples, Palms, Motorolas and Nokias, Rim can no longer rise from their falls. As competition increase and strengthen exponentially.

When BES clones hit the market, Rim will no longer be relevant to the American enterprises or the marketplaces. Time: 1 to 1.5 years from today.

2009 Jun 29 03:07 PM

[EJL]

So I guess we'll see RIM gone by the end of 2010? Funny, because the sales trends just don't bear this out - but let's wait and see.

When will BES clones hit the market? You talk a lot about this, but fail to back it up with facts/knowledge about, well, anything. But I would like to know when this will happen nonetheless. Please advise.


On Jun 29 03:07 PM JamesApple wrote:

> In the past when Rim was the only enterprise phone in the market,
> Rim sales would rise and fall. But now that the market is loading
> up with Apples, Palms, Motorolas and Nokias, Rim can no longer rise
> from their falls. As competition increase and strengthen exponentially.
>
>
> When BES clones hit the market, Rim will no longer be relevant to
> the American enterprises or the marketplaces. Time: 1 to 1.5 years
> from today.

2009 Jun 29 04:33 PM

[JamesApple]

Nortel was a bigger company than Rim and how is Nortel doing now?

2009 Jun 29 06:35 PM

[hardymaine]

First, It seems like only the full time analysts like Mr. Huang appreciate RIMM these days.

Second, I had a Motorola smart phone and if my experience is typical RIMM has nothing to worry about.

Third, I wouldn't bet on Palm's chances of outlasting RIMM. What amazes me is that a lot of people want to make that bet, which is of course their right. But I for one will take the other side of the trade esepcially given the price I can get RIMM for vs. Palm.

2009 Jun 29 07:27 PM

[JamesApple]

Rim is handing out blackberries like there is no tomorrow with Buy1 blackberry Get1 blackberry + a SAMSUNG for $45 a month + unlimited data and voice plan. With these deals Rim should have flooded the whole world with blackberries ten times over already - that's if the blackberrries are any good. But since that's not nearly the case, it means only one thing: blackberries are junk. Facts speak louder than anything. I worked at Rim before for a long time. Rim is neither a good manufacturer nor a good employer.

2009 Jun 29 08:14 PM

[.crazylegs..]

I still don't understand the point you are making here. This 2 BB, 1 samsung for $45/month unlimited just doesn't exist, at least not on earth. James, which planet are you from? Obviously the conclusion you arrive at based on "facts" is wrong, as the "facts" are just made up by you. I'm thrilled to know that RIM got rid of you, they are a much better organization because of it. I think you are just being an idiot for idiot's sake. That is the only rational explanation. Good luck with that.


On Jun 29 08:14 PM JamesApple wrote:

> Rim is handing out blackberries like there is no tomorrow with Buy1
> blackberry Get1 blackberry + a SAMSUNG for $45 a month + unlimited
> data and voice plan. With these deals Rim should have flooded the
> whole world with blackberries ten times over already - that's if
> the blackberrries are any good. But since that's not nearly the case,
> it means only one thing: blackberries are junk. Facts speak louder
> than anything. I worked at Rim before for a long time. Rim is neither
> a good manufacturer nor a good employer.

2009 Jun 29 09:00 PM

[Frank Castle]

I've been supporting mobility since the days of Palm Professional and when BES came on the scene nothing was even in the same leauge. Now it's 2009 and no one is still able to replicate what they provide the enterprise. I've looked into every "solution" the comes along and the lone that came close is Good - which failed as the Treo's were just awful and cost wise BES just made more sense and it's what users wanted so it was win-win.

Microsoft has pretty much failed and Windows Mobile along with their Mobile Device Manger 2008 is just way too confusing, expensive and still not equal to what BES provides, the other solutions are a hodge-podge that support devices that have little to no market share in the US. Good has been bought and sold and it's too bad as when I had it to demo it was decent. Now iPhone is enterprise - lite as it's got the start but still missing out of the major enterprise feature set.

So James - in the next 1-2 years who is going to come out and take over that market? Apple? How many companies are going to sunset the major investment of their Blackberry and BES to switch to something not equal to the control they presently have?

I would love a solution that supports all devices but it doesn't exsist - each platform has it's own flavor so you balance this all out and pick the platform that makes the most sense for your needs - in large enterprise Blackberry is going to win that head to head against anyone most of the time.

RIM has a strong line up coming with major devices across all carriers plus BES 5.0 that put them further ahead of everyone else.

2009 Jun 29 09:22 PM

[JamesApple]

Look for the $45 combo deal with 2 blackberries and 1 Samsung. You will find it.

BES license fee is too high. I have associates in China's Beijing University who are working with 87 others in researching and developing BES clones. They said there are 6 more similar projects in Russia, Hungary, USA, India. Not all the projects are BeS clones, some of them are for handling different makes.

2009 Jun 30 01:25 AM

[Frank Castle]

Keep us posted on how that open sourced clone is going. There's likely a VC or two around here that might want to fund you.

2009 Jun 30 06:25 AM

[EJL]

This makes zero economic sense. What carrier would give away three phones for 3 new lines of service for a total of $45/month unlimited. This just doesn't pass the common sense test. Please provide details where this is being offered. Further, RIM would have nothing to do with this type of deal given that the samsung somehow is in the mix.

Your clone story is wonderful - when these things eventually come to market (if ever) I guess we'll see what happens. I'm just interested to see how an open source software project will be able to match what the BES truly offers AND how BES is interconnected with RIM's NOC providing that secure third party verification and link between device and corporate servers. That requires a huge infrastructure investment which RIM has developed over many years. I won't make a bet on something that may or may not eventually hit the market but I will bet on a proven solution with a huge competitive advantage.


On Jun 30 01:25 AM JamesApple wrote:

> Look for the $45 combo deal with 2 blackberries and 1 Samsung. You
> will find it.
>
> BES license fee is too high. I have associates in China's Beijing
> University who are working with 87 others in researching and developing
> BES clones. They said there are 6 more similar projects in Russia,
> Hungary, USA, India. Not all the projects are BeS clones, some of
> them are for handling different makes.

2009 Jun 30 09:15 AM

[JamesApple]

That $45 blackberry combo ad is all over the place. Look again, try Yahoo also, look for the $45 deal.

2009 Jun 30 11:38 AM

[EJL]

It's not anywhere. This is a flat out lie or else you would simply say company "x" or site "y" offers this. As usual, long on rhetoric, short on fact. Prove me wrong, I'd like to see that deal somewhere, I just don't believe it given how uneconomical it is for the carrier.

What's funny is that even if this existed, it is most likely being pushed by some unaffiliated, tiny third party that has nothing to do with RIM, yet you extrapolate a trend for the entire market for smartphones out of this one example as if it has a meaningful impact (if you yourself believe some of the crap you write). Myopia at its finest.


On Jun 30 11:38 AM JamesApple wrote:

> That $45 blackberry combo ad is all over the place. Look again, try
> Yahoo also, look for the $45 deal.

2009 Jun 30 03:14 PM

[Math]

Frank, I'm trying to get a hold of you. [e-mail]

Thanks

On Jun 30 06:25 AM Frank Castle wrote:

> Keep us posted on how that open sourced clone is going. There's
> likely a VC or two around here that might want to fund you.

2009 Jun 30 05:31 PM