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As I Have Anticipated, There is Absolutely No Fire in the Torch, Except for the One That’s Frying RIMM’s Share Price
So it has been a month and a week since turning bearish on Research
in Motion, and after more than 100% gains in ATM options, a launch of
the companies most pivotal product and the figurative obliteration of
market share by competitors Apple and Android, Rethink Wireless reports:
After a
burst of enthusiasm around RIM’s launch of its latest BlackBerry, the
Torch, the firm’s shares have slid again, amid reports of disappointing
initial performance. The Torch 9700, the first smartphone to run the
company’s upgraded operating system, BlackBerry OS 6, is seen as RIM’s
crucial device to fend off the rising attack on its market from Apple
and Android.
But online retailer Amazon has already slashed the price of the device
to $99, less than a week after the phone shipped in the US on August
12, with an AT&T exclusive. It will soon appear in some European
markets with Vodafone. According to estimates from analysts at Stifel
Nicolaus and RBC, as reported by The Wall Street Journal, the Torch has
sold just 150,000 units since launch, compared to 1.7m iPhone 4s in
the first three days of that handset’s availability (and despite
‘Antennagate’).…
But at
launch, many analysts questioned whether it was enough to move ahead of
Apple, HTC and other companies currently leading the field – or merely
a catch-up device for a range that had fallen well behind the cutting
edge.
In a new
research note, analyst firm Gartner says it believes the Torch will
appeal mainly to traditional BlackBerry users in the business world,
and stop them defecting to other smartphones, but is unlikely to
attract new users. It may fare better in Europe, where the BlackBerry
has been making significant progress in the youth market, depending on
carrier pricing and marketing.
Shares in
RIM have fallen steadily since the launch of the Torch, dropping
almost $5 per share since August 12. One analyst downgrading the firm
was Scott Sutherland of Wedbush, who moved shares from outperform to
neutral and wrote in a client note: “We continue to believe that RIM’s
strategic positioning in the enterprise, alignment with carriers, new
products, and international expansion will allow the company to
participate in the solid growth of the smartphone market. However,
while the Torch launch was decent, we do not see it slowing the
oncoming rush of Apple and Google long term, and see risks to its
enterprise positioning.”
Hmmm, shares drop from the $80s to the high $40s and the sell side
changes their recommendations from outperform to hold!!! With friends
like these, who needs enemies. The writing is on the Wall (Street) for
RIM unless management can pull a seriously sized rabbit out of their
ass. The iPhone is selling more than 10x times the rate of Torch (if
the sell side estimates quoted in the article are to be believed) and
Androids are outselling the iPhone. These sales are at full price
(between $199 and $299 , US) and the top of the line Androids and
iPhones are consistently sold out – at FULL PRICE! You literally have
to join a lottery to get an Evo, two months after launch. Ditto with
Droid X, and iPhone 4. Two weeks after the launch of the Torch,
retailers are ALREADY dropping the price, and doing so by a whopping
50%. I hope RIM has a Blackberry 10,000 model they can launch in the
upcoming weeks.
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For those hopelessly optimistic types (you know… Those who probably smoked saw green shoots throughout the government induced rally of 2009), I query, “What
does it portend when the most pivotal product of your company’s
existence is released to a lukewarm reception than discounted 50% —
FIFTY PERCENT!!! — just 2 weeks after launch? All while the competition
can’t keep their shelves stocked at full price after 2 and even three
months??? The discrepancy stems, in part, from
the feature set. The Torch is a significant leap ahead of the legacy
Blackberry devices, but was obsolesced at launch by the competition that
started shipping TWO months before. DOA!!!
Click to enlarge
If you were an insider, would you be selling right now? Would you be using an iPhone or an Android to make the sale order?
As for the analyst in the article above and his assertion that the
Torch will stop defections to other platforms, the research that we
performed says otherwise.
As can be seen from this chart, Android is just about there. Apple
will probably show better numbers in Q3 with additional evidence of
iPhone 4 adoption as well.
Additional writings on Research in Motion:
- After Getting a Glimpse of the New Windows Phone 7 Functionality, RIMM is Looking More Like a Short Play
- RIM Smart Phone Market Share, RIP?
- This Quarter Offers a Lot of Challenges for Smart Phone Vendors with Fruit in Their Names!
- Many More Black Eyes for the Blackberry? A Complete Forensic Analysis of Research in Motion
- The BoomBustBlog Multivariate Research in Motion Valuation Model: Ready for Download
- As
Research in Motion Continues Its Inevitable Downward Descent In Both
Equity Value and Market Share, Investors Should Tweak Their Assumptions
Accordingly
Subscription content (click here to subscribe):
RIMM Forensic Analysis and Valuation – Professional & Institutional
Smartphone Market Model – Blog Download Version- advertisements -
As a personal note, I've always hated RIMM for turning email into what used to be a passive experience to a IN-YOUR-FACE expectation.
"Why didn't you answer my email?"
"You mean the one you sent at 2:30am?"
"YES!!!"
Type-A managers will always ride their staff, but with these obsidian little wedges of plastic RIMM has fostered an entire new way to extract every little bit of "productivity" from already overworked employees.
I look forward to their subsequent death and Blackberry bonfire parties when it is all over.
Email was never intended to be a *PUSH* service. *grumble*
Did you type that on your blackberry? :)
Alas, no. I have been spared by the Blackberry scourge, but know too many friends who haven't.
Good try, though :)
Are smart-phones part of the minimum set? Lyric for you!
Microsoft will come a knocking. Outlook Exchange plus smartphone would be killer combo for them. Businesses that want security aren't going to switch to the Iphone/Android for corporate email with all the apps people download on those phones.
Same reason why some companies will not use Salesforce because of servers out of company's control.
Reggie,
I love your commentary. I always look forward to your posts on this website knowing that I am getting REAL information. I haven't made the leap to your website and service yet but I'm intrigued.
With regards to RIM, I look at them as the "IBM" of phones. Businesses are comfortable using them. They have good security. Apple is'nt there yet. However, which is probably what your research shows, Apple has the "people" and they are buying them like crazy. As a Blackberry user they are ALWAYS behind the curve (no pun intended). It's a very good product but it does not have the "cool" factor. Something that is VERY important in getting people to adapt to any new technology. IF Apple can get businesses to buy in to having their product be a true business tool, then you can stick a fork in RIM. Otherwise they will always have a niche as the "business phone".
Thoughts?
Microsoft owns Exchange Server, literally. They are about to be put out of the mobile business and must fight back by any means necessary. If that means puttin RIMM out to pasture, then so be it. Blackberries are only as secure as the server they are serving data from, ex. Exchange, so it is a stretch to believe they can outdo, or even match MSFT if the giant gets serious. Windows Phone 7 is a serious undertaking.
Wow ... I've barely typed my comment and I find the following ... http://www.bloomberg.com/news/2010-08-31/rim-falls-as-survey-shows-blackberry-corporate-loyalty-starting-to-fade.html
RIMM is doomed! Short it till the cows come home?
"Like I've said before." "Last week I said X and now X has happened" "If you will recall, I stated X and X has happened"
Jesus Christ guys! Give it a rest! Okay, you were right, but you're wrong enough times to make up for it so get off your damn high horse, and try to come up with an original introduction before you begin your yapping!
I think RIM would take $60 to get out of this alive.
RIM is for sale. The only questions are who is the buyer, and what kind of deal can they cut for the IP?
when the economy takes a real swan dive and Americans actually lose purchasing power, the first thing to go will be all the "smart-phones" that none of the peasant class really needs.
Nobody needs a smartphone except pros and the pros still like their Blackberries
Oh, I disagree. I think the unwashed masses will give up their cellphones when you pry it from their cold, dead hands.
Or when they just stop being able to pay the bills. I guess pre-paid phones will hang on longer, but the whole damn cell phone craze is such folly.
To survive these cell phone producers urgently need to come up with new stuff! FAST!
and it already looks like the Chinese are about to win that race!
http://www.chinavasion.com/product_info.php/pName/machismo-cigarette-lighter-cellphone-touchscreen-dual-sim/
I'd like to see my Iphone do that!
You have NO idea of what you are talking about!!! The iPhone has had that feature for months!!!
Jul 6, 2007 ... Photo caught by a passerby with their ZUNE players built in camera, just as a victims head catches fire from her exploding iPhone. ...
zoilus.newsvine.com/_.../821977-iphone-blows-up-a-catches-fire-to-womens-head - Cached
Aug 18, 2009 ... EU's exploding-iPhone investigation heats up. by Matt Hickey .... Transponder and iPod both had their batteries blow. They weren't left in a ...
news.cnet.com/8301-17938_105-10312537-1.html
iPhone Blows Up Car!
42 sec - Jan 21, 2010
Uploaded by benjaminjtaylor
www.youtube.com
iphone blow up
Aug 9, 2009
www.ebaumsworld.com
Oké, I'll grand you that one.
But what about this little feature on the new Nokia phones?
Swedish quality baby!
http://4.bp.blogspot.com/_E-HBtGdxmL8/SVS61gm7XmI/AAAAAAAACy0/ksZQYUF-Huo/s320/cell-phone-with-security.jpg
Ok. That's COOL.