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Research In Motion Limited (RIMM) |
HenryTo
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 Posted: Sat Jun 26, 2010 9:15 pm Post subject: Research In Motion Limited (RIMM) |
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Morningstar's earnings notes on RIMM:
| Quote: | | After reviewing Research in Motion's RIMM first-quarter results, we are keeping our fair value estimate unchanged. Although shipments looked a little light (a fact that management attributed to new product delays), growth was still very respectable at 25%, and gross margins held steady at 44% on a year-over-year basis. Operating expenses were held in check, so the company also saw a strong increase in operating margins. We think the beating being taken by the shares today is based less on actual first-quarter results and management's second-quarter projections, and more on a growing realization among investors that the iPhone and Android platforms are a growing threat to RIM's customer base. Our view has been that iPhone and Android remain more consumer-centric pl atforms than the BlackBerry, and we're seeing growing evidence that the iPhone is starting to gain some traction in the corporate market. While we still believe that the BlackBerry remains the best overall communications device (e-mail, SMS, and voice), we think the BlackBerry platform remains a distant third to the iPhone and high-end Android phones when it comes to applications and media, two areas that we think are of growing importance to the consumer market. |
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HenryTo
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| Posted: Fri Mar 30, 2012 11:54 am Post subject: |
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What a difference a few years make. Morningstar's bleak outlook on RIMM.
| Quote: | | Research in Motion RIMM delivered fourth-quarter results that were slightly below consensus expectations, despite having set an extremely low bar. With few reasons to be optimistic about RIM's ability to rebound from its current uncompetitive positioning, we are maintaining our fair value estimate of $14 per share. RIM shipped approximately 11.1 million smartphone units during the quarter, representing a 21% sequential decline. Revenue was just $4.2 billion, down 25% year over year as unit shipments tumbled, sale prices declined, and low-end phones accounted for a greater portion of unit shipments. In a sign of how stale and uncompetitive RIM's current phone lineup is, the company took a $267 million inventory write-down and still ended the quarter with inventory 60% higher than the year-ago period. Of greater consequence than the uninspiring results, however, is what the firm did not say. Management declared it would no longer provide forward-looking guidance in a quantitative form, citing limited visibility. The next several quarters will be difficult for the firm, with continued deterioration of unit shipments, revenue, and profitability expected. Lacking guidance from management, investors must expect the worst. The delay in launching a competitive platform is eroding the existing user base and damaging RIM's long-term prospects. In a smartphone market that is growing at more than 50%, without a competitive device RIM is sending users who are entering the smartphone market for the first time straight to the competition. Poaching a smartphone user from a competing platform is significantly more dif ficult than capturing that user as he or she enters the market for the first time. Every user converted by Apple AAPL, Android GOOG, or Microsoft MSFT is a lost opportunity for RIM. BlackBerry's fate remains tied to the success or failure of the BlackBerry 10 devices. New CEO Thorsten Heins did stress that BlackBerry 10 devices are still on track for a launch in late 2012. However, until there is more tangible evidence to support that the BlackBerry 10 devices will be competitive, on time, and supported by an ecosystem of applications and content, we are hesitant to take the leap of faith required to believe in the firm's successful turnaround. In the meantime, RIM is focused on damage control. Heins is shaking things up and putting his own team in place, with many high-level executives leaving the firm, including the CTO and COO. Additionally, Heins signaled that RIM would keep an open mind to strategic alternatives including licensing, partnership, and possibly even acquis itions, though he maintained that priority one remains putting the firm back on track with the BlackBerry 10 launch. We welcome the open-minded approach, but the introduction of strategic alternatives at this point, without any specifics, raises more questions than it answers. |
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HenryTo
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| Posted: Mon Jan 23, 2012 5:35 pm Post subject: |
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Morningstar on the RIMM CEO transition.
| Quote: | | A change in Research in Motion's RIMM management team was warranted and is an incrementally positive step, but it does little to address the challenges facing the firm. Our fair value estimate is unchanged. RIM announced that chief operating officer Thorsten Heins will replace co-CEOs Jim Balsillie and Mike Lazaridis. Balsillie and Lazaridis built the firm into a top device manufacturer during the past two decades, but have struggled in recent years to compete with Apple AAPL and Google GOOG in the smartphone market. The co-CEO structure has turned into a handicap during this time, with mixed visions leading to p oor execution. A change in the top role is an opportunity to bring a more focused direction to the firm. The change at the top does not alter RIM's disadvantaged competitive position, though. The firm's smartphone market share has plunged from 20% to 12% in the past eight quarters, indicating that RIM has failed to deliver compelling devices. RIM is now betting its future on a next-generation operating system acquired from QNX. However, the BlackBerry 10 smartphones based on the new operating system will not be available until the second half of 2012. In the meantime, RIM is trying to compete with the latest-generation iPhone and Android devices, with BlackBerry phones that represent the last gasp of design from a dead operating system. This makes it difficult to hold on to existing customers and limits the firm's ability to court developers, putting the BlackBerry ecosystem further behind the competition. To survive, RIM must deliver compelling devices with the BlackBerry 10 launch. Even then, the firm will still be late to a game where momentum is critical, but compelling devices could spark a turnaround. It is difficult to have confidence in the design and execution around the BlackBerry 10 smartphone launch, which is still two quarters away. Furthermore, as we have detailed in previous notes, we view an acquisition of RIM as unlikely and see few short-term solutions to bail out investors. |
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HenryTo
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| Posted: Fri Dec 16, 2011 11:30 pm Post subject: |
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Morningstar on RIMM. RIMM still making money of course but is spending it on its troubled tablet strategy.
| Quote: | | Many of the results from Research in Motion's RIMM third quarter were previously disclosed, but the firm's bleak outlook for the fourth quarter does little to convince us that this firm's turnaround is on track. Weakness in North America continues to haunt the firm, though unit growth in international markets is currently offsetting. Unfortunately, replacing corporate users in North America with emerging market consumers is not the way to build customer lock-in or drive average sale prices higher. Management spent a great deal of time discussing operational tactics they are employing to address the situation, but ultimately, RIM is asking investors to take a leap of faith on devices that won't be launched until the second half of 2012. We are not convinced RIM's problems can be solved with aggressive marketing or corporate restructurings. If RIM is going to survive, it must roll out compelling devices. If BlackBerry 10 devices fail to win the hearts and minds of consumers, RIM's unit sales will fall at a startling rate. Even before BlackBerry 10 devices launch, we believe the current generation of BlackBerry 7 may have trouble attracting enough users to offset growing churn in the customer base. RIM's tablet, the Playbook 2.0 is still on track for a February launch, signaling management's commitment to what we believe is an unconvincing tablet strategy. There are clear advantages to spreading development and marketing costs across multiple devices, but as evidenced by the massive write-down in inventory this quarter, RIM's tablet strategy has been a dismal failure. With Apple dominating the high end of the tablet market and Amazon's Kindle Fire making it difficult for anyone else to compete above the $200 price point, we anticipate t hat despite management's current commitment to tablets, RIM may have to shutter those efforts. |
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HenryTo
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| Posted: Fri Dec 16, 2011 11:28 pm Post subject: |
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Here's the run-down on Blackberry's security.
http://www.technologyreview.com/business/37680/
The fact is that corporate IT departments are allowing their employees to use Android or iPhone--and the former could still control email access through third-party programs. |
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rffrydr
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| Posted: Fri Dec 16, 2011 6:33 am Post subject: |
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...but they still seem to be making plenty of money. I know next to nothing about this company but leadership is probably the last thing I'd blame--or, only blame to the extent that they tried to "compete" with Apple.
Privacy plays far more a role in the rest of the world. And corporate culture is its own economy. The President still uses one. I'd buy RIM debt here and have the "soft-power" patents to fall back on if worse comes to worst.
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HenryTo
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| Posted: Thu Dec 15, 2011 6:44 pm Post subject: |
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| RIMM down 70% this year and makes a new 52-week low of $14 in AH reading. Blackberry's market share down to 8% from 22% this time last year. Next gen phone delayed to latter part of next year. Shows how things can quickly change if leadership isn't on the ball. |
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rffrydr
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| Posted: Tue Jul 26, 2011 8:07 am Post subject: |
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Dropping 14K employees....don't get any better than that 
Correct me if I'm wrong but crackberry is still that last vestige of electronic privacy. All they need is a facebook app and they'll be raking it in for a very long drawn out "terminal value."
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nodoodahs
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| Posted: Mon Jul 25, 2011 1:20 pm Post subject: |
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RIMM seems to have stabilized over $25. Poked below intraday, but never closed below, its June 20 low. Announcing layoffs. Price ratios look cheap. Interesting idea at this point.
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rffrydr
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| Posted: Tue Jun 21, 2011 5:49 am Post subject: |
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While we're all watching Apple's jesus phone call another carrier to heaven the disruptive force of the iPad is shaking things up for laptops:
http://www.businessweek.com/magazine/content/11_16/b4224031138429.htm
| Quote: | | Low-end machines from Taiwan couldn't match the appeal of Apple's (AAPL) tablet, which cost about the same. Global laptop sales, which had been rising by double-digit rates before the iPad, collapsed; they grew just 1 percent in the first quarter of 2011. The post-PC era began last year, and Taiwan got blindsided. |
No doubt this is part of the evisceration of the QQQQ's we've been treated to.
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rffrydr
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| Posted: Fri Jun 17, 2011 5:48 pm Post subject: |
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They're talking about the "Barron's Curse" and putting RIMM as the period of a long sentence: Motorola, Sony-Erickson, Palm, HP, LG, Nokia....
All understandable, but the phones do really work as phones and the secured emails are the favorite of criminals/corporations all over the world. That's a killer app mac can't yet match. I'm seeing negative targets at $25. Oughtta be worth something here. Probably go with Nokia's 3rd world delivery and get the microsoft phone free!
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nodoodahs
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nodoodahs
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| Posted: Fri Jun 17, 2011 1:43 pm Post subject: |
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Not that I'm a fan of 'fair value estimates' and not to make endorsements of M*'s actual estimate, but if they cut it 10% off from $45 and it takes two years to revert to fair value, then that makes $28 a heckuva buy.
Disclaimer, no positions, not personally engaging in discretionary value trading.
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HenryTo
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| Posted: Fri Jun 17, 2011 11:30 am Post subject: |
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FWIW. Morningstar's latest notes on RIMM:
| Quote: | We think that RIM's smartphone strategy is problematic, and we're skeptical about its tablet
Analyst Note 06/17/11
We're putting our fair value estimate for Research in Motion RIMM under review. We've been concerned about RIM's competitive position for some time now, and it appears that management's complacency in the face of strong market share gains by iOS and Android is finally starting to hit home.
We expect to cut our fair value estimate by about 10%. Our previous fair value estimate of $45 per share already represented a grim scenario for Research in Motion, in which revenues decline and margins contract in 2012-13. So we don't expect a radical change in our estimates.
Although the company has a strong balance sheet, respected brand, and carrier relationships that could allow it to avoid a precipitous decline, management has thus far given us no confidence that it has a handle on the challenges the company faces. If Research in Motion fails to deliver handsets that are competitive with high-end Android phones or the iPhone by the Christmas season, things could get far worse. |
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nodoodahs
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| Posted: Fri Jun 17, 2011 8:18 am Post subject: |
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RIMM starting to look like appealing value at these levels. If we get some price stabilization then the split-adjusted late-2004-to-mid-2006 range of $20 to $30 might make a good entry trading range.
Price levels today are implying that the company is more destined for doom than it was at the height of the crisis in March 2009; ratios are implying that it's essentially a buggy-whip manufacturer.
We've seen some companies like this fail to recover after missing significant market shifts, but there's a basic foundation and a chance for a turnaround here, some product and restructuring is due.
Key is avoiding the value trap. Technicals would be useful. Stabilization of price and/or establishing a base or range over the next months would be worth waiting for.
Bottom line, if I were still a discretionary value guy, I'd be adding RIMM to my watchlist and looking to see if it might fill a roster spot on my lineup later this year.
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rffrydr
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| Posted: Sat May 07, 2011 7:07 am Post subject: |
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Killer app. How long can corporate security withstand the new normal: the app ecosystem?
Ironic, as I spent an hour last night looking to expand my personal app universe and was surprised and appalled how many that I know I wanted were deficient--usually with all the promise of the home page and very little of its content. And as far as the social networking, I had high expectations for Yelp--jeezus, give me a newspaper critic please!!
How to account for it? Laziness, apple killler cut...or, smart phones guts are not as smart as we think they are. Watch out ARM investors. 
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