Friday, November 25, 2005

RIM numbers may not add up: analysts

CNET reports that analysts are scratching their heads after Research In Motion announced it will "have fewer subscribers but revenue should be in line with estimates."

According to the article, RIM has lowered "its forecast for new subscribers for the third time this year. Third-quarter numbers have been cut back by 8 percent for the rest of the year. The company blamed the revision on two new BlackBerry models that failed to ship on time."

Brad Akyuz at Current Analysis said, "Honestly, I do not see them meeting their objectives without adding subscribers and releasing these products on time. The 7100 from Cingular is nearly a year old and people have been looking for the 8700 with Intel inside, so RIM needs those devices."

According to Todd Kort at Gartner, the 7100 series comprised 20 percent of RIM total shipments, and "RIM shipped 188,000 of its 7100t (as in supported by T-Mobile) in its fiscal second quarter."Kort pointed out that "the more than 862,000 traditional PDA-style units that RIM claims it shipped in the same time period and the shipping slip up will hurt RIM but not kill Q3."

Kort said, "They do have a substantial server business and just released BlackBerry Enterprise Server version 4.1, so they could make their revenues up in that area. That will in effect lock in their customers even more because it should lower the cost of ownership of a BlackBerry system."

Akyuz added, "Going forward, you might see an increase in the software part of the business, but that won't happen in one quarter."

The last concern is the pending patent litigation and the threat of "an injunction forcing RIM to stop shipping product to U.S. customers until it repairs relations with Virginia-based NTP."

Kort said, "There is concern by some clients but we've told them to proceed as usual and not panic. We tell them it is prudent to consider the alternatives, but the other ones out there are not that good right now."