RIM has its head in the sand and is delusional..

By on Sep 27, 2008 at 2:21 PM
News September 27, 2008

Analysts had a field day on Friday after RIM released its less than stellar Q2 earnings on Thursday. When addressing its future prospects, RIM warned that its gross margins in the Q3 will drop another three percentage points to 47% and that a further decline is likely into 2010. Ouch! In a letter sent to clients, Charles Wolf of Needham & Co had the most scathing assessment of RIM:

In their conference call, management dismissed the notion that new competitors, most notably Apple’s iPhone 3G and new smartphones running on Google’s Android platform, would materially slow the growth in new subscriber activations. We continue to believe that the company has its head in the sand. Yes, the iPhone and Android phones will expand the market as they lure mobile phone users to smartphones. But we believe it’s delusional to think they won’t cut into BlackBerry sales as well, especially in the consumer market.

Did he just call RIM delusional and say they had their head in the sand? Yes, indeed he did. The not-so-rosy forecast for RIM had an effect as its stock fell 28% by days end. Yikes, looks like RIM is suffering the consequences of venturing out of their comfortable enterprise market and entering the highly competitive consumer market. Congratulations, RIM, you just got your first royal smackdown!

Disclosure: I’m eagerly awaiting the Storm on Verizon.

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  • Rosario

    Lol, its funny to come to the comments and read what fight is going on now. Most of the time its usually bias this, you didnt quote that. Kinda crazy how people get worked up over little stuff. But it does get too much sometime. I mean if you dont like what their saying then just ignore it. Why constantly yell BIAS at every turn, things are not going to change.

    And for the record, I see some bias but its not just oh Apple and AT&T are the greatest everyone else sucks. Of course things are going to be bias or lean a little towards whichever way the author thinks, because surprise surprise this isnt some hard hitting newspaper. Its a blog. And I know I come here because I enjoy reading this site.

  • theta think

    Better said…Fox News

  • http://www.k5live.com Likeabite

    I was about to get at the apple fanboys and Kelly for a little biased outlook on this article but had a little epiphany I would like to share with you all. The iphone is a great looking device and very iconic. It’s UI is fantastic and the simplicity of its design makes it look extra appealing. However, you have to wonder where do they go from here?? There literally was no difference between the iphone and the iphone 3g, except the inclusion of the faster 3G network, which some might argue made no significant difference.

    That said, they might try and make the design different the next time around but it will still be an all touch screen iphone again, with still not much difference. The only next logical step would be to add an external keyboard, a la blackberries to either appeal to a different market or have a new form factor. In its current state and being limited to only one network, the iphone’s impact will stay stagnant unless something dramatic is done and the only logical step would be a different form factor with a keyboard since it already is all touch screen. That is, unless Jobs and Co. comes out with something revolutionary like a phone that folds into a watch or that has a virtual keyboard or something. Any thoughts on where the iphone can go next??

  • sooooo

    So Apple stock is down about $17 so far today.

    I wonder why this isn’t being reported?

    Oh ya, I forgot, the people at BGR are Apple nuthuggers.
    :)

  • sooooo
  • sooooo

    make that $22 now :)

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