Friday, 19 June 2009

RIM misses high expectations

(By Richard Holway 9.00am 19th June 09) I think if I, in the midst of the worst economic downturn since the 1930s, had just reported a 53% increase in revenues YoY, a 65% increase in my customer base, a 33% increase in nett profit and a share price that had doubled in three months, I would feel pretty pleased with myself. Maybe I’d be a bit peeved with 'missed expectation' type headlines and a decline in my share price as a result. But that’s what happened to RiM (the Blackberry people) last night. (For more detail see FT – RIM chief upbeat)

The ‘problem’ was both that they missed the even higher expectations set by analysts and, at 3.8m new subscriptions, this was the first quarter in RiM’s history where the number of new subscriptions added was lower than the last quarter (3.9m). On top of that RiM faces competition in the all important smartphone market from a host of new, and not so new, competitors. Most notable being the new iPhone 3GS and the Palm Pre.

Personally, I’ve been hugely happy with my Blackberry Bold. As a portable email device it has no equal. Typing on a touchscreen is not for me. Having mastered the art of two-thumb speed typing, I’m not going to give it up willingly!

Whereas Blackberry's past success was because it was the preferred enterprise solution, its future depends on its takeup by consumers. The fact that 80% of its new subscribers last quarter came from consumers is a pretty encouraging sign that it can compete in that tough market too.

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