1. Economist101's Avatar
    your showing your clear lack of knowledge here. BlackBerry smartphones need either a BIS or BES connection for email/browsing etc, this means paying the carrier (who in turn pays RIM) a monthly set fee.
    On the contrary, that post was intended to show how ridiculous the comment I cited was. That's all. Slow your roll.

    also your comparing ASP`s, how about comparing a profit margin instead? yes apple have a high profit margin on devices, but nobody knows what the margin gained on BIS/BES subscriptions are. so you cant make a net profit example, which is what companys need to be able to run.
    You're kidding right? Let's do some simple math:

    RIM's last quarter: $700 million (rounded up) profit on $4.9 billion sales, $0.15 of every dollar is profit

    Apple's last quarter: $7.31 billion on $28.57 billion in sales, $0.25 of every dollar is profit

    I don't know what their profit margins are, but I do know that those numbers aren't close. And before you say that Apple's making a ton of money from PCs, the iPhone generated $13 billion of that revenue, and the iPad generated another $5.5 billion. Computers, iPods and other income sources contributed a mere $10 billion out of the nearly $29 billion total.
    lssanjose likes this.
    09-07-11 01:55 PM
  2. Rooster99's Avatar
    ah i understand now, apple must be very worried then, as their tablet computing marketshare has dropped from over 95% to somewhere suggested to be nearer 70%.

    or they could be saying `we sell more and more every quarter`.
    Apple should be aware of that, but it's very different going from over 95% to 70% of a brand new market and maintaining clear market leadership to going from 40% - and clear market leader - to 23% - and third place - in a more mature market.

    Selling more and more is good. It's just not good enough.

    When you compare the numbers behind the "more and more" to the competition, it's clear RIM may have to accept being a has-been niche player on an ongoing basis. And that's fine too - that can be a highly profitable business model. But then customers and partners/developers need to assess that new position for its impact on their purchasing and product development decisions.

    - R.
    branflakes likes this.
    09-07-11 02:17 PM
  3. Tre Lawrence's Avatar
    Apple should be aware of that, but it's very different going from over 95% to 70% of a brand new market and maintaining clear market leadership to going from 40% - and clear market leader - to 23% - and third place - in a more mature market.

    Selling more and more is good. It's just not good enough.

    When you compare the numbers behind the "more and more" to the competition, it's clear RIM may have to accept being a has-been niche player on an ongoing basis. And that's fine too - that can be a highly profitable business model. But then customers and partners/developers need to assess that new position for its impact on their purchasing and product development decisions.

    - R.
    Even if the co-CEOs came out and wore tighty-whities saying "We are struggling" on the backsides, there would STILL be people here saying RIM is A-okay.

    I greatly agree with your niche player/profitability synopsis. Well said.
    09-07-11 02:26 PM
  4. Paul Brand's Avatar
    When you have new competitors that you didn't have before, loss of market share is expected. Apple and Google aren't small competitors by any measure.

    I see Apple and Google expanding the smartphone market, not just simply taking away RIM's lunch (though that also exists to a significant degree). If Apple and Google weren't around, RIM would have a larger market share within a smaller smartphone industry. Market share is relevant in seeing how RIM is doing compared to Apple, but as a (relatively new) RIM investor, I'm more interested in how much money RIM is making relative to its share price.

    And while I would like to see RIM become #1, I'm not at the current time trying to justify why RIM is worth $300. I only need to justify it has value at $31. I wouldn't be surprised if it hits $60 in the next 18 months, but uncertainty does exist.
    09-07-11 07:06 PM
  5. Paul Brand's Avatar
    Although not a very positive article it does reveal that RIM now has over 76 million subscribers.

    They had 55 million subscribers at the end of November 2010. That means they have added over 20 million subscribers in 9 months. That's about 7 million new subscribers every 3 months! That translates into subscriber growth of about 36% over the same period. It also means they will have doubled there subscriber base in 2 years to 110 million by Nov 2012 at this pace.

    Do you remember in july they tweeted that they had added over a million new subscribers in the 3 weeks accross the EMEA.
    I'm trying to fill in the blanks, but having a tough time coming to a conclusion other than Q2 is going to far exceed expectations.

    Q1 2011 11.2M phones sold, 4.9M net new subscribers (~46M total)
    Q2 2011 12.1M phones sold, 4.5M net new subscribers (> 50M total)
    Q3 2011 14.2M phones sold, 5.1M net new subscribers (> 55M total)
    Q4 2011 14.9M phones sold, X net new subscribers
    Q1 2012 13.2M phones sold, Y net new subscribers
    Q2 2012 ? phones sold, 21 - X - Y net new subscribers (76M total)

    It seems like the termination rate was growing in the first 3 quarters (15.5%, 16.7%, and 18.2% respectively. So, if we assume that it stays at 18.2% (which at first glance seems conservative to me), then X = 4.9M, Y = 2.1M, leaving 14M net new adds in Q2 2012, and 25.3M phones sold.

    Let's try 15.5% instead. X = 6.4M. Y = 3.7M, leaving 10.9M net new adds in Q2 2012, and 21.0M phones sold.

    We have one other hint in that EMEA had 1M new adds in 3 weeks, and if you extrapolate that, you get 4.3M new adds excluding North America, South America, and Asia for the quarter. Still don't see how the numbers add up.

    If the stat is true, short sellers are going to be experiencing a lot of pain.

    But, I have to admit, these numbers just don't seem plausible.
    Last edited by Paul Brand; 09-07-11 at 08:09 PM.
    09-07-11 08:07 PM
  6. BBisthefuture's Avatar
    That's my point exactly! If RIM has increased it's subscriber base from 55 million to 76 million or by 21 million in 9 months the stock price is going to soar! Short sellers will get fried!! It is hard to believe but that is what the article is saying. If they have achieved this without introducing any new phones since last fall it's remarkable.

    Now consider they are in the middle of the biggest global launch in their history, they are going to be re-launching the Playbook with some added functionality and they will soon be launching QNX phones...
    09-07-11 08:30 PM
  7. Paul Brand's Avatar
    That's my point exactly! If RIM has increased it's subscriber base from 55 million to 76 million or by 21 million in 9 months the stock price is going to soar! Short sellers will get fried!! It is hard to believe but that is what the article is saying. If they have achieved this without introducing any new phones since last fall it's remarkable.

    Now consider they are in the middle of the biggest global launch in their history, they are going to be re-launching the Playbook with some added functionality and they will soon be launching QNX phones...
    I think optimism is justified, particularly after the confirmation of the EMEA tweet, and slightly early O7 release, but I'm having trouble believing >50% increase in sales in a quarter where the company said 3 months ago it was expecting a sales drop. Such a beat would be literally unprecedented.

    But, if you are confident, and think share prices are going to $40 the day after earnings, I would recommending loading up on some call options. Buy a $35 option at $0.91. If it goes up to $40, you more than quintuple your investment. If 50% growth in sales is true, I would expect the share price to go well above $50 within a day.

    Anyway, I'm definitely not going to sell before earnings. Maybe I'll add some.
    09-07-11 09:13 PM
  8. BBisthefuture's Avatar
    It's also possible that RIM's sales over the last 3 quarters have been more from new subscribers and less from upgrades. This might make sense considering most of the growth has come from areas outside North America.
    09-07-11 09:38 PM
  9. Paul Brand's Avatar
    Apparently we have a more recent estimate since Nov 2010. 67 million subscribers as at the annual meeting (see Reuters or Toronto Sun article, google "67 million subscribers balsillie").* That was July 12, 2011. (I'm assuming Balsillie had up-to-date data on that). Korean article was published September 5. Implies 9 million adds in <2 months?

    The 67 million subscribers data point seems plausible for End of June or mid-July, and in line with my calculations.

    76 million is

    *I'm too much of a newbie to be allowed to post links.
    09-07-11 09:49 PM
  10. Paul Brand's Avatar
    It's also possible that RIM's sales over the last 3 quarters have been more from new subscribers and less from upgrades. This might make sense considering most of the growth has come from areas outside North America.
    That would still imply an assumption of low termination from existing users. I'm not seeing low termination as plausible, especially in the US.

    I'm going to go with the theory that the 76 million was a typo, and it was really 67 million, as per Balsillie's July stat. Seems more plausible.
    Last edited by Paul Brand; 09-07-11 at 10:00 PM.
    09-07-11 09:56 PM
  11. BBisthefuture's Avatar
    I found the article you mentioned. it does seem to cast doubt about the 76 million subscriber number published in the Korean times? Even if the 67 million subscriber number was as of the end of the June quarter and not as of July 12 it would still seem unlikely that they could add 9 million subscribers in 3 months.
    09-07-11 10:18 PM
  12. BBisthefuture's Avatar
    If the Korean times did mix up the numbers as you suspect and meant to write 67 million users instead it begs the question as to why RIM staff would be mentioning a figure that is 2 months old and clearly not relevant to today. Especially when they were trying to impress the crowd of journalist. Obviously they have added new subscribers in the last two months.
    09-07-11 10:52 PM
  13. FMB8900's Avatar
    yea, i already clearly answered that i think
    Dont bother replying to Economist, hes a big-time troll. Trolololol Just ignore him.
    09-09-11 11:08 AM
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