Tag: 2010 fiscal conference callPage 2 of 2

Save the date: RIM to announce 2nd Quarter Fiscal 2010 results


Back when RIM announced its first quarter fiscal 2010 results, we brought you a summary and we’ll be doing the same for this coming quarter. If you personally have money invested in RIM, I would recommend listening anyways.

On September 24th, 2009, RIM will be reporting results for the second quarter of fiscal 2010 after the close of the market. A conference call and live webcast will be held beginning at 5 pm ET, which can be accessed by dialing 800-733-7571 or by logging on at www.rim.com/investors/events/index.shtml.

A replay of the conference call will also be available at approximately 7 pm by dialing 416-640-1917 and entering passcode 21289982#. This replay will be available until midnight ET October 8, 2009.

Reuters is wrong about RIM’s stock valuation and market strategy



Yesterday, we heard RIM give its Q1 2010 fiscal conference call and I get the feeling Reuters wasn’t even listening. They had the following to say:

“Research In Motion offered investors an outlook yesterday that fell short of some expectations, sending the BlackBerry maker’s stock sliding five per cent even as the company reported a higher quarterly profit that topped forecasts.”

First of all, the stock sliding 5% is not necessarily correlated with the conference call. In my opinion, RIM did an excellent job of reassuring shareholders that the company was strong financially. The outlook they offered did not fall short of expectations. In fact, across the board, financial results were better than predicted and Jim addressed the question period adequately.

According to Reuters, the drop “may reflect concern over a competitive landscape that has become more cluttered with alternatives to the BlackBerry.”

The truth of the matter is that RIM does not see other smartphones as a threat. They addressed this issue very clearly in the conference call.

First, the new iPhone pricing is industry standard and nothing RIM can’t match. Apple is simply selling year-old hardware at a discount. This is nothing new and RIM has been doing this for all their handsets. Secondly, the smartphone market is growing fast enough to allow more device competition. The pie is getting larger and it’s not a matter of who gets what slice.

Reuters also points to the global economy as a reason for the share price drop. Sure, while the recession is affecting IT markets, this isn’t something unique to RIM and therefore shouldn’t be lumped together with saying that RIM didn’t meet expectations of shareholders.

As explained in the conference call, revenue is mainly affected by seasonal trends and the summer is inevitably going to be slow. As a shareholder listening to the call, I might want to move my stock out for the summer, and buy back when it has come down a little. My prediction is that you will see the stock jump significantly after the summer, when the fall and holiday seasons are sure to boost revenues.



Research in Motion 1st Quarter Fiscal 2010 Conference Call



Yesterday evening, RIM held their 1st quarter fiscal 2010 conference call. Adele Ebbs, RIM’s Vice President of Investor Relations moderated the call, while Jim Balsillie fielded questions of a strategic nature. The major news in this call included:

  • RIM sees a whopping 80% increase in consumer subscribers.
  • Enterprise subscribers are down for seasonal and architectural reasons.
  • Jim Balsillie dismisses iPhone and Pre as a threat.
  • International sales are strong and steady but come with risk.
  • Jim talks about the BlackBerry OS with respect to the smartphone market.

RIM sees a whopping 80% increase in consumer subscribers.

Overall, financial results from RIM are strong. Total revenue is up 3.4 billion, up 53% from last year. Revenues are slightly higher than predicted during RIM’s conference call last year. Revenues can generally be attributed to strong device sales in the consumer space, and new enterprise functionality.

Over 80% of RIM’s new subscribers this quarter came from the consumer base. The massive growth in the BIS subscriber base can be attributed to both local North American growth, and strong international sales, particularly in Latin America, the Middle East and Asia. These developing markets, tend to primarily use BIS, even in enterprise.

This new shift to the consumer side is increasing loads being put on the infrastructure. Consumers are demanding rich media services such as streaming video, which uses more than 100 percent the network capacity of a voice call. BlackBerry efficiency and network capacity are going to address this issue, as devices become more efficient, and carriers offer new technologies such as LTE.

The BlackBerry Tour is this quarter’s big step to address the consumer shift. The BlackBerry Tour has the media capabilities to address the power user market. While you may have seen very little from RIM in terms of promotion, I believe this is indicative of a marketing shift at RIM Corporate. The firm seems to be giving the promotional responsibilities to the carrier. The message from RIM seems to be: “we just make them, you sell them.”

While carriers will be the driving force behind device promotion, this transition hasn’t been fully realized as of yet. There seems to be a miscommunication between RIM and the leading carriers in that RIM mentioned several times during the call that carrier inventory levels are consistently low. They also predict these levels to remain low. So while carriers are taking more responsibility for sales and marketing, they don’t seem to be managing the logistics behind these new responsibilities very well.
Continue reading a detailed roundup of the information presented in RIM’s conference call