RIMM: More afraid of Apple than it lets on?
Posted
Jun 26 2008, 01:37 PM
by
Kim Peterson
Rating:
Shares of Research in Motion are collapsing today, down nearly 13% after the BlackBerry maker reported disappointing quarterly results. Actually, the results seemed pretty solid, but they weren't good enough for analysts and investors who wanted to be blown away.
There's a lot to read into the numbers, particularly for people who were expecting a summer smartphone war between the BlackBerry and Apple's upcoming 3G iPhone. I think the war is still on, and it's moving to the marketing front: RIM said it's going to increase its marketing spending by nearly 30% this quarter.
Perhaps the iPhone is a bigger threat to the BlackBerry than RIM wants to admit. Or perhaps RIM's North American exposure is a weakness in today's economy. Here's what others are saying, now that we've had a day to digest the earnings news:
Silicon Alley Insider: "We think RIM is underplaying -- or worse, underestimating -- how significant a competitor Apple's iPhone 3G will be, especially among consumers, which are increasingly important to RIM. But we also think the smartphone industry is big enough and growing fast enough to support both of them -- likely at the expense of Motorola, Palm, Nokia, etc.
Tech Trader Daily: "RIMM said on its conference call yesterday that the weak dollar has triggered price increases from some of its component suppliers, pressuring margins. Some investors obviously think that the same factor could affect margins at Apple, Nokia, Palm and other handset makers."
Rob Sanderson, American Technology Research: "Investors hoping for a pull-back should not wait long; this may be the best chance left this year to buy weakness int he best growth story in large-cap tech,” he writes. “RIMM remains a must-own stock for growth managers.” (via Tech Trader Daily)
Charlie Wolf, Needham: "In contrast with management’s view, we believe growing competition in the consumer market poses a risk to Blackberry’s supercharged growth in this market." (via Tech Trader Daily)
Fund manager Romeo Dator, U.S. Global Investors: "We'll take any sell-off on RIM as a buying opportunity. The trend towards smart phones is a long-term opportunity."
Jim Suva, Citi: "We think RIM made the tough decision to forgo short-term profit for longer-term growth."
Related reading:
That big thud you hear? RIM's earnings
iPhooey! Time to buy RIM, analysts say
New BlackBerry coming. Iphone who?
Apple takes on BlackBerry for business users
