Design World

  • Home
  • Technologies
    • ELECTRONICS • ELECTRICAL
    • Fastening • joining
    • FLUID POWER
    • LINEAR MOTION
    • MOTION CONTROL
    • SENSORS
    • TEST & MEASUREMENT
    • Factory automation
    • Warehouse automation
    • DIGITAL TRANSFORMATION
  • Learn
    • Tech Toolboxes
    • Learning center
    • eBooks • Tech Tips
    • Podcasts
    • Videos
    • Webinars • general engineering
    • Webinars • Automated warehousing
    • Voices
  • LEAP Awards
  • 2025 Leadership
    • 2024 Winners
    • 2023 Winners
    • 2022 Winners
    • 2021 Winners
  • Design Guides
  • Resources
    • Subscribe
    • 3D Cad Models
      • PARTsolutions
      • TraceParts
    • Digital Issues
      • Design World
      • EE World
    • Engineering diversity
    • Trends
  • Supplier Listings
  • Advertise
  • Subscribe

Analysts Split on RIM’s Outlook

By atesmeh | June 8, 2009

It’s a basic principle of capitalism: Increased competition can hurt a company by putting pricing pressure on products while forcing the company to boost marketing expenditures to sell the product.

But when it comes to Research In Motion (RIM), the picture is a bit more murky. Analysts say the company’s financial figures could be both harmed and benefited by the release of the Palm Pre, whose qwerty keyboard seems to make it a BlackBerry competitor.

Equities research firm Morningstar says that competition from new entrants like the Pre could ” pose a formidable challenge” to the company in its upcoming quarters, especially as demand remains soft and competing operating systems growth in strength.

One the other hand, the company’s first-quarter sales likely will benefit from Verizon Wireless’ extended “Buy One, Get One” offers on BlackBerry phones.

UBS analyst Maynard Um goes one step further, boldly arguing that the launches of the Palm Pre and latest iPhone will help rather than harm the company: “Although perhaps a little counter-intuitive, we believe the launch of the Palm Pre and Apple iPhone will benefit RIM due to increased carrier competition. We believe Verizon will continue to promote BlackBerry and think RIM can also benefit from potential renegotiations between AT&T and Apple,” Um said in a report. “We believe RIM’s guidance for the August quarter is likely to exceed our [estimates and Wall Street estimates], driven by new device launches as well as increased operator competition in the quarter.”

Indeed, shares of RIM have risen about 19 percent since early May, which UBS says reflects optimistic expectations and guidance for the first half of 2010. And despite its more cautious outlook, Morningstar says that strong BlackBerry sales bode well for the company.

The Pre effect won’t have a presence on RIM’s first-quarter results, which will be released after the market closes on June 18. A poll of 36 analysts conducted by Yahoo! Finance shows that the market expects the company to continue its gains. The company is expected to generate earnings of 93 cents per share on sales of $3.41 billion.

As for the second quarter, when the effect of the Palm Pre launch is more fully felt, those analysts predict RIM’s sales will rise to $3.58 billion, generating earnings of 95 cents per share.

UBS’s final comment: “While competitor launches will likely raise the bar for all handset vendors and has the potential for increasing volatility in the space, over the near-term, we expect RIM to benefit from the increased carrier competition given its strong position at Verizon and AT&T.”

More FirstNews 06/08/09:
•  WWDC Anticipation: New iPhone?
•  Analysts Split on RIM’s Outlook
•  Low Stock Keeps Pre in Demand
•  Qwest to Keep Long-Distance Business
•  S.D. Lawmakers: Cell Phone Rules Might Be Tried Again
•  Russian Bailiffs Set to Sell Telenor Stake
•  Japan Explores Using Cell Phones to Stop Pandemics
•  FirstNews Briefs for June 08, 2009

 

You Might Also Like


Filed Under: Infrastructure

 

LEARNING CENTER

Design World Learning Center
“dw
EXPAND YOUR KNOWLEDGE AND STAY CONNECTED
Get the latest info on technologies, tools and strategies for Design Engineering Professionals.
Motor University

Design World Digital Edition

cover

Browse the most current issue of Design World and back issues in an easy to use high quality format. Clip, share and download with the leading design engineering magazine today.

EDABoard the Forum for Electronics

Top global problem solving EE forum covering Microcontrollers, DSP, Networking, Analog and Digital Design, RF, Power Electronics, PCB Routing and much more

EDABoard: Forum for electronics

Sponsored Content

  • Sustainability, Innovation and Safety, Central to Our Approach
  • Why off-highway is the sweet spot for AC electrification technology
  • Looking to 2025: Past Success Guides Future Achievements
  • North American Companies Seek Stronger Ties with Italian OEMs
  • Adapt and Evolve
  • Sustainable Practices for a Sustainable World
View More >>
Engineering Exchange

The Engineering Exchange is a global educational networking community for engineers.

Connect, share, and learn today »

Design World
  • About us
  • Contact
  • Manage your Design World Subscription
  • Subscribe
  • Design World Digital Network
  • Control Engineering
  • Consulting-Specifying Engineer
  • Plant Engineering
  • Engineering White Papers
  • Leap Awards

Copyright © 2025 WTWH Media LLC. All Rights Reserved. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media
Privacy Policy | Advertising | About Us

Search Design World

  • Home
  • Technologies
    • ELECTRONICS • ELECTRICAL
    • Fastening • joining
    • FLUID POWER
    • LINEAR MOTION
    • MOTION CONTROL
    • SENSORS
    • TEST & MEASUREMENT
    • Factory automation
    • Warehouse automation
    • DIGITAL TRANSFORMATION
  • Learn
    • Tech Toolboxes
    • Learning center
    • eBooks • Tech Tips
    • Podcasts
    • Videos
    • Webinars • general engineering
    • Webinars • Automated warehousing
    • Voices
  • LEAP Awards
  • 2025 Leadership
    • 2024 Winners
    • 2023 Winners
    • 2022 Winners
    • 2021 Winners
  • Design Guides
  • Resources
    • Subscribe
    • 3D Cad Models
      • PARTsolutions
      • TraceParts
    • Digital Issues
      • Design World
      • EE World
    • Engineering diversity
    • Trends
  • Supplier Listings
  • Advertise
  • Subscribe
We use cookies to personalize content and ads, to provide social media features, and to analyze our traffic. We share information about your use of our site with our social media, advertising, and analytics partners who may combine it with other information you’ve provided to them or that they’ve collected from your use of their services. You consent to our cookies if you continue to use this website.OkNoRead more