Research in Motion will release earnings on Wednesday, and there's a fair amount of optimism swirling around these shares, even in the face of ever increasing competition and headlines from Apple and the iPhone.
Of course, Appleis the easy one on which to focus, but there's also competition out there from Nokia, and a host of handsets running Microsoft'smobile operating system too.
The mobile technology sector is easily tech's most exciting, and when it comes to the top name--at least today--no one comes close to RIM . Sure Apple continues to gobble up market share, and sure the new iPhone running 3G is grabbing big headlines, as well it should. But BlackBerry enjoys a kind of cult following among its users that almost equals the cult following Apple enjoys around the Mac. And with RIM's head start in the market, it continues to be the momentum leader. And I don't see that changing any time soon. Market share may ebb and flow slightly, but the conventional wisdom on Wall Street right now is that RIM's leadership is untouchable for the foreseeable future.
That's not to say that Apple isn't a better, broader play. I've said as much in earlier posts, thanks to the triumvirate of revenue streams it enjoys from Mac, iPod and iPhone. But if you're looking for a pure-play in wireless, RIM seems to be the pick among most analysts on the Street covering the sector, especially since Palm and Motorolahave disappeared as effective competitors.
This time around, analyst consensus is 85 cents a share on $2.27 billion, following RIM's own guidance in April of 82 to 86 cents on $2.23 to $2.3 billion in revenue. The more important numbers to watch for are units shipped and new subscribers added, and Mike Abramsky at RBC Capital anticipates 2.3 million new subscriptions and a whopping 5.5 million units shipped. We'll all be focused on guidance as well, and Abramsky expects an EPS range of 94 to 97 cents, way ahead of Street consensus of 90 cents, on $2.7 billion.
The big increases in RIM's second quarter will come from what Abramsky says is a "broad consumer assault," thanks to new devices like the upcoming Bold, the Thunder, a rumored flip version of the Blackberry, new Pearls. That's big news on the consumer side of things.
On the enterprise, RIM continues to innovate, and continues to enjoy elite status among business users. I have written extensively that Apple is making inroads here with big corporate clients like Disney, Genentech, the US Army, and so many others that Steve Jobs highlighted during the recent Apple Worldwide Developers Conference. But for every one, major corporate client that Apple touts, RIM has dozens and dozens and dozens. It is the entrenched leader.
The fact is, Apple and RIM will continue to leapfrog each other with new innovations here and there. RIM's already in China; Apple's headed there later this year. Apple's finally in India. Headed to Russia. Apple's playing catch-up, and well. But RIM continues to excel. Isn't standing still. And they will both continue to capture market share as more and more consumers and business customers realize that dumb, inexpensive handsets don't offer the capabilities, ingenuity, connectivity and efficiency that smart phones do. This market is more than robust enough to support both.
RIM shareholders have been rewarded handsomely for the company's performance with shares rising 34 percent this past quarter. With expectations already so high, if RIM can beat again, this stock will be off to the races. If not, "ugly" won't even begin to describe what happens to these shares. But I haven't talked to a single source about RIM who expects anything less than another blockbuster. Should be interesting to see just how "expert" these experts really are.
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