What are the bears saying now?

By Chris Umiastowski on 27 Nov 2012 12:25 pm EST

BlackBerry or BlackBeary?

Yesterday I mentioned the fairly bullish report from Scotia Capital, talking about upside in Research In Motion shares based on a successful BlackBerry 10 launch.

I've gone on a bit of a data-gathering rampage since last night. So between tons of reading and thinking, and plenty of coffee this morning, I have a much clearer picture of how analysts are thinking (and financially modeling) the next few quarters.

The big upside scenario is based on BlackBerry 10 device shipment volume and rebuilding of channel inventory. Gus at Scotia Capital outlined that scenario nicely.

So does everyone feel the same way? No. And that's what makes a market. You have buyers and you have sellers. At the risk of angering the few folks who do not understand this concept, let's look at the bear case as outlined by two analysts yesterday. I'm pulling the quotes from these reports (shown below) from Barrons. I do not have the full reports from these analysts so I'll restrict my commentary to the portions of the reports posted here.

Morgan Stanley

Here's what Morgan Stanley published, followed by my thoughts:

We continue to believe BB10 has a low chance of success. While some of the new features on BB10 seem innovative, we had a similar reaction to Palm's WebOS when we saw it at CES in ‘09. Ultimately we believe BB10 is too late, and subs continue to shift to competitive devices. According to a global mobile workforce survey in mid-Oct, just 5% of respondents expect to upgrade to a BB, even below MSFT at 8%.
We continue to believe FQ2'13's relatively healthy results were a temp respite driven by a mix-shift to BB7 and growth in lower-end subs. With the competitive environ only tougher, fundamentals should deteriorate.
We expect services rev to begin declining in the Nov qtr accelerating thereafter as BB10 does not use RIM's NOC in the same way prior versions did, reducing service ARPU. We believe services biz is RIM's most important asset, and value services at $12/sh in a near-term wind-down scenario but $0/sh in our $7 SOP PT, as it supports the loss-making devices business.
Our developer checks continue to indicate limited interest in supporting BlackBerry. An IDC survey found that just 9% of developers were "very interested" in BB apps in Aug ‘12, down from 40% in Jan '11, after surveying 5,526 enterprise app developers globally.

My thoughts: Comparing RIM to WebOS is an overused and insane activity. Palm ran out of cash. Period. They did not have the funding to do a real launch. Without a marketing engine you have almost no chance of success. So this argument doesn't hold water in my opinion.

Notice his comments on service revenues? He's saying they'll start to decline (which worries me too), but his reason for saying this differs from mine. I don't think it has anything to do with how the NOC is used in BB10 versus BB7. The NOC is still used, and the only real change is the use of Activesync to push email and PIM data. Everything else is still proprietary to RIM. The NOC fees (aka service revenue) have everything to do with how carriers see its value today compared to when they originally signed deals with RIM. It has nothing to do with how BB10 uses the NOC "differently".

Boiling it all down, Moran Stanley is saying BB10 won't catch on, and service fees will drop. Those are definitely risks, but I do not agree with most of his reasoning.


Now let's take a look at Macquarie's comments: 

Our carrier checks indicate that North American carriers are each likely to take one or 2 BB10 devices and that the company is likely to benefit from channel fill in the February and possibly May qtrs. Given low levels of RIMM channel inventory, the company could post upside to our above-consensus 8.0mm smartphone units in the Feb. qtr. As a reminder, RIM sold 11.1mm units in the Feb. 2012 qtr. with a stale product.
Our current break-even EPS forecast for Feb. qtr. assumes 8.0mm units, $233 ASP and 33% gross margin. Each additional 1.0mm units would result in $.11 per qtr in EPS, each $10 increase in ASP would create $.02 and each 1% improvement in gross margin would be $.04. Our blue sky scenario, assuming 36% gross margin, 9.5mm units and $250 ASP, would be $.39 in qtrly. EPS.
Even if BB10 is successful and annual earnings recover to the ~$2.00 level, we wouldn't expect RIMM to trade up to more than $16-$20 or 8-10x PE. If BB10 does not sell well, RIMM stock could easily revisit its $6 lows, so risk/reward is now balanced, in our view.

My thoughts: What's he saying? He believes carriers will support BB10. Ok, that's good. He believes we'll see channel fill in the first couple of quarters. That's also good. He points out that his own forecast (above consensus) may be too low since RIM did pretty well last Feb on stale hardware. All true.

He then explains his sensitivity analysis, illustrating that device volume, ASP (average selling price) and hardware gross margin are the biggest controlling variables in the profit equation. I agree. Keep in mind his gross margin numbers are overall (hardware + software + services). Those are not hardware-only estimates.

The bearish part of the discussion is really at the end. He's saying that even if RIM succeeds, earnings go to $2.00 per share. So in his opinion, the price of the stock today reflects a fair balance of upside to $16-20 and downside of $6.

Like I said, I haven't seen the entire report. I don't know what else he wrote. But you can see from these two analyst reports that the focus on hardware shipments, ASP and gross margin is what the Street cares about now. That's the primary concern. Beyond that, everyone wants to know the dynamics on service revenue

The BlackBerry 10 Financial Model

From most of the reports I've looked at, analysts seem to expect an ASP of $400ish on the new BlackBerry 10 hardware coming out in Q1. Gross margin estimates range from 20-30%, which tells us that the estimated manufacturing cost (all in) will be $280 to $320.

If we look at BlackBerry 7, my rough math suggests current all-in manufacturing costs are about $250. This jives with the fact that ASP is just under $230, and we know RIM is losing money on hardware today.

So what does it cost to build a BlackBerry 10 devices over and above a BlackBerry 7 device? Considering the higher screen quality, faster processors, better cameras, and the addition of LTE I think a cost bump of $50 seems reasonable.

This leaves us with ASP. Can RIM sell these suckers for over $400? Apple commands over $600 for an iPhone 5, so that defines the high end. Nobody else gets there aside from Apple. Who can tell me what carriers pay for Samsung Galaxy S3, or other high end Android phones? I'm not talking about subsidized prices or non-contract retail prices. I'm talking about what Samsung is paid by the carrier. Is it well above $400? If so, why shouldn't RIM be able to price its awesome new phones at the same level?

Reader comments

What are the bears saying now?


I'm sure the off contract price will be higher than that to consumers. I think Chris is referring to what RIM will sell them to carriers for. iPhone 5 to consumers off contract is even more.  

I have been talking to my financial guy and he is definitely bearish on RIMM. He says it is too little too late and thinks they are dead in the water. He is suggesting that I dump my stock and cut my losses before it drops back to $6. I told him I am in it for the long haul and that since I purchased some of the stock at near 50 and much more at 16, selling now seems foolish given the potential upside. In a little while he will either say, "I told you so." or he will say, "Well done." I am banking on the latter.

The only guy who wins if you sell now is your financial guy or broker, unless they're one in the same!!


Good for you, you didn't get sucked into the "game". RIM did a near double in price as of late (BB10 looking good! ) and as is natural there will be some profit takers, the stock will also retract some after a near double ( again natural), the stock will consolidate .... yet this is also a time when the shorts will ramp up their "game", silly shorts,lol.

You will see negative ANALysts coming out of the woodwork to coincide with this consolidation,take it for what it is, a game.

BB10 still ramped up for Jan 2013 and more upside to come, watch and learn! ;) { " Can your phone do this? " }

Hi Chris, I like the way your posts always open up more questions and discussions. I may be off here, but I believe the S3 is at ~400 bucks a pop for the carriers, likely higher. And this scenario holds true where contracts are made on cellular devices. There are many other markets, (where RIM is strong, India, Indonesia, South Africa) where contracts do not come into play. Do we consider the ASP in such markets as well? Ruling these markets out of the BB10 equation is wrong or at least myopic imho.

Another thought that pops up is how well RIM can make viable their OS7 inventory, do they continue to sell at a loss, or they keep their ASP the same, but reduce hardware costs so they are at least at the break-even mark for OS7?

Cesare21 - you might be misunderstanding me (you can tell me when you reply).  The off-contract price is controlled by the carrier.  The ASP is what the carrier pays RIM.  So contract or non-contract I don't care so much.  I want to know what RIM takes from the sale.  So YES, yes yes ... we care about what the carriers in developing markets are paying too.  There's nothing that makes AT&T, Verizon and other developed-market carriers special here.  Whatever Indosat and Vodafone South Africa is paying, I care.  

FYI usually pricing to the smaller emerging market players is higher than to the big boys we all know.  It's a scale thing.  You commit to larger volume,  you get better pricing.   

Then that must be why a 8900 is still more expensive than almost all Android devices here in Brasil. A 9900 right now, on a contract is around R$ 990. That's about $495. If I remember right, that is enough for a device off contract in the US.

Off contract, they are going for R$ 2000 - $1000 (the 9860 being the affordable option, at R$ 1250 - $625).

You cant compare Brasil with the rest of the world. Taxes and profit margins are absurd.
Claro Brasil sells the 9900 by $700,00 on a $ 100,00 per month contract.

+1... i go to brazil quite often and that's the right word, absurd... take this example: a car made in brazil is more expensive in brazil (national product) than buying the same car in argentina (imported product)... so you cannot compare brazil prices with almost anything in the rest of the world...

I do not know much about these business stuff, but what i do know carriers do not control the off contract price of phones here in malaysia and also in indonesia. Many are selling phones at lower price than carriers' off contract devices as they import the devices from other countries. And most people will get their devices from these shops not from the carriers.

I hope i'm making sense when writing this reply. Lol.

Thanks for the reply Chris, I was looking at the price RIM sells to retailers for both OS10 and OS7 inventory where contracts do not come in the equation. To elaborate, when if I want to buy a 'berry, I would walk in to a retail store, ask them the price, buy the device if right and walk away. My carrier doesn't ask me any questions on why I changed my device. And we have too many people doing it this way since we get better deals in retail stores than carriers. My current 9810 was bought online, and once delivered I went to my carrier's website and updated my new PIN to get BIS.

In this scenario, the carrier did not pay a dime to RIM. That is where I was coming from, with no carrier in the equation. Are the monies charged by RIM to retailers in the above scenario considered?

Secondly, how do you think RIM will handle OS7 inventory, do they try to make money off this inventory? You second paragraph might have already answered this question though but I want to make sure.

I don't understand how people can say its too late for anything. With that thinking, windows phone is already dead and the only 2 players EVER will be iOS and android. No. You may lose chances at some customers, but it's never too late. The quality is what is important.


I hate it when I hear that as well. People should realize that there's a small loyal group of followers for apple, android, and blackberry. The rest of the population is up in the air, and people will move onto the next best platform, whatever it may be (i.e. BB10).

Since the majority of new Apple users are ex-Blackberry users, I'm sure they could just as easily come back to their beloved Blackberry. Too many apples can't possibly be good for you.

In addition to that information is the product mix for 2013 with RIM needing 18 million BB 10's sold along with a drop in BB 7 phones from 35 million to 24 million. That gives Macquarie $ .11/shr in profit, or break even. I think that sales of phones will be much higher than 42 million units as channel stuffing and the entire US market are there to absorb millions of phones. I hear of many who are waiting impatiently for BB 10 to arrive. The demand is there and RIM is playing the social network to get the "free" buzz out there. I see them selling close to 30 million BB 10(s) at higher ASP thus providing RIM with $ 2.00/shr in 2014. It is this uptake in phones and their indication that fully 6 phones are heading to market that will drive the 30 million unit mark. This isn't Apple where we see one phone each year, no, they are going to hit pay dirt on one of those cool phones in fiscal 2014.

I'm currently up around 124% on RIM. Long the stock and written puts... all good as long as these expire in Dec lol.

When Nokia was king of cell phones I don't know who thought Apple would dethrone them but the fact is it was Samsung that knocked them into second place. At just 23.6 million iPhones sold last quarter Apple is nowhere near either of the leaders as Samsung sold 98 million cell phones worldwide ahead of Nokia's 82 million.

Of course Apple has a huge edge in profitability. How is that? How does Tiffany's makes more on each engagement ring sold than Costco does? The much better quality allows for a much higher mark-up on price, of course. A strong brand helps pass through high prices too. It is worth noting that the technology in diamond rings doesn't change at the same pace as cell phones so the relative profit margins amongst the cell phone manufacturers will likely have more room to move over the next few years.

The question should be, when Nokia was king of cell phones, how many people guessed/thought that Google would create an OS that would revive the fortunes of countless marginal hardware manufacturers by propelling them into the smartphone market for little or no cost. And now that it has happened, how many people think those same marginal companies will maintain or increase their new-found profitability and market share? History shows that extremely high margins are exceedingly unlikely to be maintained.

As usual, an excellent article Chris! I'm glad you're on the CB team, and respect your "no sugar added" analysis.

Taking a step back, it is a refreshing sign of life at RIM that they're even on analysts' radar at all. Mr Heins and co. have gone above and beyond lately to get the BB10 ball rolling, and I think it is starting to pay off. I've noticed that even some of the most openly anti-RIM blogs have been impressed by what they've seen of BB10 and the candor of Mr. Heins. The guy just wins people over wherever he goes, which is quite a thing to say about a RIM CEO!

Thanks again, and keep the great CB content coming!

Chris - another good article.

As you know I am long RIM. Here are a couple of mistakes I think the analysts are making.

1. ASP too low for BB10. RIM does not break down the Bold ASP in their quarterly reports. But I think it is above $400. No reason for the BB10 phones to sell below what the Bold costs. By the same token, higher ASP means higher gross margins.

2. Valuing parts of the business at $0. Even if RIM were to lose serious money on BB10, the subscriber base, network, and security would be worth a significant amount of money. Remember most government has to use the enhanced security. That is valuable.

3. I believe the surveys used by these analysts suffer from selection bias. Common sense tells us that developer interest in BB10 is not low. Just look at the overwhelming support for BBJam sessions for proof. The surveys are inherently biased because there has been no significant marketing for BB10, compared to iPhone and Android which are established platforms. Similarly surveys to potential customers will be biased in favor of established platforms because BB10 is not yet an established brand. With marketing I think we will see those surveys show results more favorable to Blackberry leading to launch.

#1 RIM will need BB10 to sell in BIG numbers. Unless they have a "value" device ready at launch, they had better keep the BB10 devices priced competitively with Android products, and stay away from Apple top of the world pricing.

#2 Some government agencies use BB devices (not all of those require that level of security) - that doesn't translate into adoption of BB10 once it is released.

#3 Do not take the HYPE of a few hundred "developers" getting free stuff as an "unbiased" indicator of the support that BB10 will get.

RIM has already show that a great device with a cool OS/UI doesn't automatically translate into sales.

"rim has already shown that a great device with a cool OS/great UI doesn't automatically translate into sales"

When was this?

Certainly no device with as "cool" an OS as BB10... If u mean the 9900/9810 then i'd agree on solid devices, but i think the masses would differ on the cool os/great ui part...

`a few hundred developers`

is that on top of the over 6000 (THOUSAND) that have attended BBjam events and have dev alpha devices?

to be clear, developer sentiment will come more apparent when devices are in market and are (or not) generating developers revenue. what is telling though, is the game `port-a-thon` thing they had the other week netted them over 2thousand apps, in 36 hours.
personally i wouldnt call that hype, id call that a result as the app is there.

I dont believe so. Otherwise the bears and bulls would have been using those numbers to indicate up and down ticks of subscribers to add more layers on their analysis.

KantarWorldPanel issued a report today - some feel was a big part of RIM being lower today. If you download the 'marketshare' report on the right hand margin there - you will get a feel for the shares of each market they report here. I don't see any mention of Africa and the only mention of Asia is urban China and Australia, not of India or Indonesia, so as far as RIM is concerned some of their up and comers are not here.


There has got to be a better reason BB10 will fail than its too late. That is the biggest bunch of bull only to be repeated by spoiled 10 year olds.

There simply is no empirical data to suggest a new platform has zero chance.

Everything that I see is that people really like what they see in BB10. This analyst is doing his due diligence but it clear he hasen't surveyed the field that much.

Oh yes MS getting on their hands and knees to get $100 Bilion to stay solvent that MS? Yes that MS. The Feds should have flushed them down the toilet. Speaking of fail.

"Oh yes MS getting on their hands and knees to get $100 Bilion to stay solvent that MS? Yes that MS. The Feds should have flushed them down the toilet. Speaking of fail."

What are you talking about?
Source please.

it's easy to say people won't buy the product when people generally don't know about the product.

Anyone have any idea what their position was when Apple was a couple months from bankruptcy before MS bailed them out?

I'm curious to know if Morgan Stanley's "developer check" is developer's interest in BBOS or BB10? It is not relevant to have these two combined into one category.

IMHO RIM could end this avenue of discussion right now by saying the apps everyone wants on the new BB10 phones are already on board.

Instead they have chosen to be cryptic without specificity saying there will be 100K apps, big apps will be there blah blah blah. What this does is allow this type of comment to go out unchallenged. Imagine if RIM has said for example that apps such as Netflix (yeah I know no one wants it) Skype, Kindle, Instagram, Flipboard, apps that previously wanted nothing to do with BB are now not only interested we already have approved versions for BB10, the guy at MS wouldn't be able to say this and get away with it.

Further, I don't see how this does any negative - but I absolutely see the positive with taking this off the table right here and now, and don't really understand why they wouldn't unless the guy is right.

What about content-delivery revenue(app world, music, etc..)? I've read that Apple runs their app store at just above break even, but they're doing much higher volumes (including iTunes) than BlackBerry does.

Is there any profit to be made, or fewer losses, by finally having an integrated ecosystem and really increasing the volume of app/media commerce? I've read that the app downloads per device are much higher for the Playbook than phones on BBOS7 and lower, and I'd expect the trend to continue once BB10 phones hit the market.

I'm too tired to go check but I'm pretty sure this is wrong and Apple makes more off its app store than RIM currently makes in services revenue - it's certainly not breakeven.

Anyone less tired want to go check?

I'm not sure you can precisely calculate the cost per app download, but nevertheless that's exactly the revenue possibility I'm thinking about for BlackBerry once BB10 phones come to market, and I haven't seen it analyzed/discussed yet.

Sorry DVD it's to liitle to late since EVERYONE has a VCR. Sorry blueray it's too little to late. Sorry Toyota It's to little to late .....Sorry Apple( 1998) it's to little to late. One could go on and on at the stupidity of that saying. These vested interests are getting realy worried that their 95 million shares which they are short might soon be called in.

+1 You forgot to mention the failure of the CD because everyone had Tape Decks! Let's not invent anything new and stick with the same old...just because something is new (and doesn't have an Apple logo on it) it will fail! That's their reasoning. I am all for competition but let's not count out BB10 before it's even released...I bet these same analysts will be eating their words come 2013 and BB starts to take back market share.

That's the problem with you BB fanboys, you think that BB10 represents something "new". BB10= CD and Android,iOS etc.= Tapedeck. It's just not true, and if you have to resort to this sort of spin, it doesn't bode well for BB.

that's the problem with not BB fanboys, you are sure that bb10 is not new and will be the same old, same old... at the end, fanboys or not, everyone will need to wait until the phones are already in the market and then we'll see... no one here has a crystal ball to know exactly what will happen, otherwise would be a millionaire and wouldn't be here wasting time at cb.com (i apologize to all the millionaire members of cb.com)

Considering that they literally ditched the Java-based OS and used an entirely new base for the OS, yes it is "something new".

Considering what iPhone has done over the past few generations (multitasking capability(!), faster processors), other than Siri, everything is the same old.

I didn't read the news closely. What struck me though was the wild variations in market share. Apple is way up again if I understand it correctly. It's proof that many, many people flock to the "newest, coolest" product to hit the market. Nothing new and cool about BlackBerry products for Americans in many a quarter. Still this mentality could be beneficial to BB10 if its viewed as "newest, coolest" in early 2013. I guess we'll see soon.

The other thing Palm didn't have is carrier support. WebOS was stuck as a Sprint Exclusive in the USA for far to long and a Bell exclusive in Canada.

Nokia strangely seems to be taking the same approach with the Lumia 900/920 and limiting their potential market.

RIM seems to be focusing on launching BB 10 on as many carriers as it can leveraging it's strong relationship with carriers Globally.

RIM does not appear to be repeating Palm's mistakes.

The mistake that they may be repeating, and we won't know for sure until January 30 is the Windows Phone 7 mistake. lack luster hardware.

Windows Phone 7 launched with hardware that was behind the curve in Q4 2010 and was suck with those limitations until Q4 of this year.

RIM launching BB 10 with weak hardware could be disastrous as BlackBerry already has a very deeply ingrained reputation in consumers minds of being old, underpowered, uncompetitive hardware. They keep saying they are in the experience race not the specs race, and that worries me because in order for RIM to maintain that "aspirational" brand image they are after they need to launch with a Halo device that shows off not just the new OS but changes the public perception that BlackBerry can't compete with modern hardware. If they launch a phone that has specs similar to the original HTC One X in Q1 2013 they are toast no matter how good the experience is. They will fail to over come the public perception that they are behind the technology curve. They have to have the low end hardware in the second or third round of devices.

Windows Phone 7 was about the experience exclusively and not the hardware, and the market crucified it. I think RIM will have a better experience then Windows Phone did at launch but given that RIM already has the rep with the general public of being way behind on hardware they will face an even swifter judgement if they don't get the hardware right. Plus, that it is the one area I have absolutely zero faith in Thorsten Heins in. He was the hardware guy at RIM for years before becoming CEO. I hope he has clued in but given that we've seen the L-Series in leaks since January, I am not holding my breath.

" They keep saying they are in the experience race not the specs race, and that worries me "

People had this same worry about Nintendo and the Wii. Which went on to completely blow away everybody. Granted, Nintendo in 2012 isn't in their glory phase of the Wii anymore, but the gaming industry cycles are very different than the mobile industry. The main point is if you can differentiate enough and provide unique value to your perfectly aligned target market, you don't need the raw specs to have a successful product.

The Wii was a flash of light that has yet to be repeated and was not long lived. For the last couple years it hasn't been flying off shelves.

Plus, as you said, you can't compare the game console market to the Mobile phone market. If the two had much in common Xbox live integration would have been important and sold Windows Phones. It didn't.

RIM has a differentiated product but we don't yet know if it will be enough.

We do know though, their reputation among consumers is one of being well behind the curve when it comes to hardware. It would be nice to see them extinguish this reputation right from day one with BB 10.

We all hope the experience is compelling and people love it. But it should be obvious to RIM they need to overcome their current image as well.

I think someone should give the Mrgn Stnly guy a Blckbry to type on so his analysis doesn't read like two teenage girls typing on their iphones in hyper-short-hand-acronym-speak.

when ever I read or hear the "too little too late" comment I just want to scream!!!!!!!!!!!!!!!
IT'S NEVER FREAKING TOO LITTLE OR FREAKING TOO LATE, RIM is not a start up they have an infrastructure that is still growing Globally. Can January 30 just get here already, I'm fed up with all freaking B.S.

I think it's rare for BGR to say anything positive about RIM.

Then again they count Wozniak among their "advisors". Their comment is completely biased against RIM and has been since the founder sold his soul for a few bucks.

Their negativity is proportionate to their fear of RIM's success.

In other words. Why would you bother visiting BGR?

Fair enough, I realize Jonathan's brainwashed but it's important to recognize CrackBerry's bias as well. Is there a neutral zone?

Yes, absolutely. It's somewhere between Romulus and Earth ;)

I'm SO sorry, but the Trekkie side of me just kicked in and I couldn't help myself :/


The difference is "Crackberry" by definition is BlackBerry biased.

BGR makes a pretense of neutrality - when clearly they're not. Subtle at times perhaps. But definitely not neutral.

I'm an Application Systems Programmer/Analyst and I always say:

If you're on-time but the product is subpar no one will give you credit for being on time.
If you're late but the product does everything it's supposed to, eventually no one will remember that you were late.

Having a quality product is more important than being on time - within reason.

Yup, spot on. There are three things you need to be successful in business. Good management, a quality product and a known market. RIM has all three. The rest are details.

Once an technology analyst say it is too late, you can be pretty much assured that they know little about technology. They might want to read "A brief history of progress". It would certainly open their eyes to the folly of such statements.

In the end if the carriers push BB10 then RIM will do well. Initial signs are positive.

Apple excluded it is the carriers that control the market. And even Apple is still tied to carrier networks and therefore subject to their demands.

So if you want to know if BB10 will be successful you just have to know what Verizon is planning. Their CMO confirmed as long ago as September they would have devices for sale on the launch day.

RIM's quarterly update is due mid December. If the numbers look ok the stock could take off.

Whatever the case, the stock has suddenly become very active. Trading volumes are well above average.

Don't mess with Apple.

RIM is a big threat to APPLE and has to be thought a lesson.

Its just Apple Hedge Funds at work. The Analysts with their
ridiculous opinions are tossed in the stir the pot.

nice article.
makes me realise how little i know about stocks and the market lol.

always an interesting read, and you do well to distinguish between your opinion and facts

There's no real way to quantify a product that doesn't yet exist, or the value of the services business going forward, or the patent portfolio in the rapidly changing market.

One year into the product launch, we'll have a real sense of the long-term viability and value. Between now and then, the stock is likely to trade more on emotions that anything else.

An investor could buy into the dips and sell into the peaks, but it may be a rocky road.

For the record, I hope BB10 is successful, and I also look forward to having it on my Playbook soon.

"Ultimately we believe BB10 is too late, and subs continue to shift to competitive devices."...This statement just completely lacks common sense. It implies that ios and android are the market leaders/dominators FOREVER and that NO new product innovation will ever knock them out of their lead position let alone be competitive. History tells us this ain't so!!!

If rim sells near 20 million a quarter their earnings will be 1.40 - 1.60 +. Where do these guys get this bs.

"Ultimately we believe BB10 is too late" the first bear says.

This is getting very old. Too late for what? Mobile computing and smart phones are in their infancy. If another new OS were to come out is it "too late" for it to succeed? Wp8 was released less then half a year before bb10 yet wp8 is not touted as "too late"? What is with these analyst's obsessions that we are now at the pinnacle zenith of cellular device technology and the current players are the only ones that will ever be??? Anyone else that dare try to release something else is too late. Sorry its done. Registration closed. ??????

The future of Microsoft doesn't entirely depend on their mobile phone offering. The entire future of RIM does.

Well, that's what they're implying.

The competition which has been beating them for several years is still steps ahead of them i.e. iPhone 5 already launched and sold millions which makes it that much harder to win customers back which makes it that much harder to make money.

Couple points:

1) Comparing RIM to Palm is stupid. It proves that 'a little knowledge is a dangerous thing'.

2) Extrapolation - yes, market share is falling and developer support is weak...but...RIM's product will attract more customers than its current phones and RIM has made it easy for developers to support the product. Let's not assume the current trend will continue if the context changes

3) People overestimate the loyalty Android customers have to their product

4) People underestimate the power Carriers have to influence customer's purchasing decisions (i.e. Android vs. Blackberry)

5) People underestimate how many competitors would love to buy RIM's assets - i.e. 80MM users, NOC, a robust OS

In the last week, was it mostly believers in BB10 or people covering short sale positions that were driving up the price?

Morgan Stanley is just sad because they sold 7million RIM shares back in September 30th (over 80% of their stake) at about $8/share... They are sad that they missed the stock's flight up to $12!

Journalism has morphed to some kind of opinion post which tries to come off as analysts.
These guys are rediculous - they are basically admitting they have no clue what they are doing?

"While some of the new features on BB10 seem innovative, we had a similar reaction to Palm's WebOS when we saw it at CES in ‘09. Ultimately we believe BB10 is too late"

How moronic they are basically saying " we saw innovative stuff (with Palm) and last time we saw innovative stuff it didnt work out so we must conclude the best stuff will be the least innovative. Now come invest with us!"

I really don't like how the majority of the analysts believe that the main reason BB10 will fail is because it is too late. They act like nobody is going to buy a phone in 2013. If anything we know how easy it is to gain customers and all this talk about ecosystem is not as important in my opinion to the average consumer as long as you have the main apps. As well they should not compare RIMM to MSFT with windows phone since at least most people have seen BB10 and have some awareness of it. When I ask people about windows phone they don't even know what I am talking about and that microsoft even makes phones. Overall I still believe BB10 has a good chance in the marketplace as long as it is properly executed.

Haven't you heard? Everyone is buying their phone on holiday season 2012. After that its over. The phone sales are closed. No one is buying a phone in February, they are all getting them in december. The latest and greatest phone commerials and ads won't be in out face anymore because its over and too late for everyone after 23:59 on december 24.

The "too late" comment wasn't meant as a universal axiom for technology companies, but rather to address specific data related to rim. They are bleeding customers daily. Sales people in carrier stores often dont even know what bis is? In my local craigslist there are 5 or 6 ads daily of people selling their 9900 because they have bought an iphone or sammy. It will never be too late for new companies to innovate but for rim specifically their new os may come too late to keep their subscriber base. I for one am pretty sick of using a berry that most developers have stopped developing for and when the Nexus 4 becomes available again for $300 outright i think bb10 will be too late for me.

Disagree...I was talking with a team leader at a national carrier today and he was very excited concerning BlackBerry and their new device(s). He commented that although he wasnt sure when they were available he had personally seen the 10 at a function and considers it an instant top consumer device. Sounds to me like they are looking forward to selling them.

I submit that it is a bit late in the game but the bases are loaded and they are giving themselves a chance at a home run...or go out swinging.

Hello, rim is not bleeding customers daily. The latest available data put userbase at 80 million up from 78 million. Cash is not bleeding as fast as it once was which is why stock went up at the last call. They have enough cash to make it to launch. Not sure why anyone can say its too late?

Couldn't bring myself to do it (buy an android). Just bought a nice used Bold 9900 off a young kid who just switched to an s3. I'll be hanging in for bb10.

I work for the world leader in cloud computing, a Fortune 500 company(139), one that goes above and beyond for our customers. We expect the best and deliver it. This means working onsite in data centers or at any time, any where. We embrace cloud computing and we build the systems to enable our clients to achieve the benefits. I am in the minority today, as day in and day out I utilize the PlayBook and a company issued Bold 9650 on Verizon, not an iphone and ipad (in addition we all still have an engineering work laptop). While the Bold was my choice for a business device in July of last year, I also keep an iphone for personal use grandfathered into ATT's unlimited data plan.

I am providing this background because in my opinion and based on my experience of both technologies, the QNX os, The Astonishing Tribe and Cascades among other influences on the Playbook os (and in much of the previews of BB10) truly enables mobile computing in a superior way than iOS or any app or widget driven ecosystem like Android or Windows 8 in almost every aspect. I like everything about the other platforms and players in this space, there is a great deal of quality products (the surface appears headed down a similar path). For me, having tested every other device, I prefer the PlayBook. It is truly a computing device, not a blown up smartphone os. It doesn't have to be 3 years from replacing a laptop, it's one product cycle away. The toughest times for RIM have come from the challenging transition of leaving BB7 and the legacy platform behind, it didn't happen soon enough. Change is not easy, especially as it relates to two separate and distinct code streams.  The late change of course to full commitment to QNX Will be most fruitful for all that will have the opportunity to upgrade their device from a BB7 phone to a BB10 powerhouse.
Although, I do understand why those that have not used the tablet os from RIM would fundamentally doubt the company can rebound (a large majority of analysts out there must fall into this category if less than 2M have been sold to date).  I am an example of an employee of a large corporation that now has a choice between IPhone 5, Galaxy S3 and a Bold. I'd still chose the BlackBerry, however, if I was unable to bridge to the PlayBook, I'd be making an immediate switch. Not because I don't love the company and the way it created mainstream employee mobility, enabled a work life balance (if you are not addicted to the red blinking light) and anywhere access to email, in fact for those reasons I want to see it thrive. Simply and bluntly, I wouldn't be able to work as efficient, flexible and as mobile every day if my only device was the current Bold. Don't get me wrong, its excellent for phone calls, mobile email, texts (love the qwerty over iPhone and autocorrect) and bbm, in addition to having a conference room style speaker phone built in.  I could give all that up (albeit reluctantly)if I was not able to on the fly consume and reply to my email including graphs, charts, images, attachments and reports in a productive way.  I wouldn't be able to read PDF's, share and discuss PPT presentations and Word Docs or news Articles in an effective way without the PlayBook.
The PlayBook os, browser, Documents To Go, Adobe Reader, File Manager and Calculator enable mobile computing for me every day. I also benefit from having the android player functionality so I consume the news via Pulse, listen to SiriusXM, read off of the Kindle app and web enabled WSJ. These apps need to be in App World though for the average consumer or business user to appreciate the device for both work and pleasure as I do currently.

The main business app missing today is Webex support and its been stated that it will be in App World at launch. That is excellent and a promise I am confident will be delivered.
Whats also missing and will continue to lack is the ability to rival the Eco systems Apple, Google and Amazon have built with iTunes, App Store, Market, etc. I expect them to remain richer in content, easier to use and far more extensive. This is not be something I believe needs to be challenged with the upcoming release of BB10, this would get built over time. A simple music/video store and App World overhaul would do wonders.
My hope is that RIM executes quickly to continue to deliver high quality apps to the ecosystem. Apps like Yelp, Scout, Starbucks Mobile and full support for Kindle, Netflix, Shazaam, Satellite Radio, HBO GO and business tools like Concur (supported in BB7) to name a few are All must haves in order to be an everyday device in 2013. There's only a handful of critical apps that bridge the gap to consumers and if you have them as a previous member stated, please make it clear that those developers are interested in and working for the platform. If they are not, they need to understand they are missing an incredible opportunity. I imagine their apps can be easily ported from android or deeply integrated into the QNX platform to enable a richer, more real time experience.

As for an early wish list, how about a 10" PlayBook is delivered in 2013? I had seen images of one that looked very real and I hope it comes to market soon. I love my iPhone, think the iPad and mini,are very neat devices as well, however, I'd be able to do 80% - 90% of my work off of the larger, more powerful PlayBook 10. I'd also like to see a bundle with a pico projector manufacturer for Large Enterprises. Maybe another acquisition target as you experience success in BB10? The right software coupled with high quality and innovative devices would be one way of regaining marketshare in the US, making the lives of mobile professionals on the go very simple again. Attack that market with your sales force and continue to optimize the user experience which will lend itself to consumers that value productivity and simplicity. Here is where the sales team would highlight BES proven track record in reliability, security, robust features for enterprise and oh yeah, no iOS6 meeting invitation debacle. Yes, we had more than a few large meetings disappear and that is an unacceptable way for a post Jobs era to begin.
The bears don't know it yet or aren't prepared to accept they were wrong betting against a company on the ropes (sound familiar?), either way, it's going to be one heck of turn around, with bright skies ahead in the true private & secure cloud computing era.

Keep up the great work Thorsten.

That's absolutely ridiculous. Anyone in the the media has surely heard that blackberry will be offering a physical keyboard qwerty version at launch. I believe there was an actual press release from RIM regarding this. Its very clear that statements like this are purposely malicious. Anyone that reports cellular tech would know the basics on blackberrys upcoming launch and this is clearly meant to make it sound like blackberry was yet again failing to deliver something people want.

Wow, that was a long read :) Any way, here is my personal experience with many OSs available on the market for last 3 years. I used on daily basis the following OSs: Symbian^3, Android, iOS, MeeGo, Windows 7. The BB10 experience is closest to MeeGo (it's Harmattan version from Nokia with Swipe interface). And that's the best OSs (MeeGo Harmattan and BB10) that I experienced so far.

Symbina^3 is too old by nowadays UI standards, Android is too bloated and boring, iOS is just boring and not comfortable to use, Windows 7 is just another bad mix of Android and iOS. MeeGo Harmattan and BB10 are the most easy to use and most efficient systems out there.

Each time I tried to switch from MeeGo to any other OS it was a real pain. I got addicted to gestures, was swiping all the time and got used to normal multitasking. I couldn't stay with any OSs for too long because my performance was dropping half. Constantly trying to swipe the app in background to open another app fast was the most annoying thing. When I had a chance to try BB10 phone I felt in love with new system. It's just amazing, I mean the experience you get from using it. I was ready to give all my phones and pay extra just to keep the Alpha Dev longer. The UI is quite impressive, icons many complains here about are good and do need the gray background to be visible on any wallpaper one decides to put (believe me, I tried to change wallpaper and have seen the effect). About the hardware. People, why do you complain about it? My MeeGo phone has 1 core 1 GHz CPU and it runs much smoother and faster than the same looking Windows Phone with 1.4 GHz.. It's all about experience you get. Who cares how many cores the CPU has if the UI is smooth and fluid. It's even more impressive when I show my friends the MeeGo phone and say it runs on 1GHz CPU. If someone can make an OS that can run smoothly on 680 MHz CPU, fine, give it too me, I pay for it. Also, there were leaks about Aristo model that has quadcore CPU!

So, as a conclusion. BlackBerry 10 is absolutely amazing OS with lots to offer. It has a huge potential and thus RIM/BlackBerry. Analysis about developers uninterested in developing for BB10 is just highly biased, there are thousands of devs started and looking forward (those who don't have Dev Alpha) to make apps for BB10. Don't underestimate the power of small developer groups or even individual one. BB10 is not too late, it's just in time for all those who fed up of using Android, iOS and Windows Phone smartphones. Many Symbian users will jump to BB10 because of experience they had in the past (true multitasking).

I'm a converted fan of BB10 now :D

I find Playbook OS more like webOS than Meego. My home phone is a Pre 3 till BB 10 comes out because it is easy to go from the Pre to the PB- though I do keep trying to upswipe the Pre to turn it on, and I keep trying to delete emails on the PB by right swiping them.

I don't care where the inspiration comes from so long as it works!

It's interesting that the analysts don't even mention QNX licensing or using the NOC for M2M data transmission.
I think another point that was made was that the % of phones RIM sold in the last quarter was way down.
Of course, this trend is useless when they are known to be releasing a completely updated phone (which is getting very good reviews) in 3 months and the general population is starting to become more aware of this.
I know that I, as a relatively affluent consumer, would not buy a new BB 7 phone when the new BB10 phones will be available in 3 months.
This downturn may reflect only the age of the BB7 OS and hardware but may also reflect the growing awareness of the new ecosystem and BB lovers' decision to wait for its release.
BTW, does anyone know how Windows 3.1 sales were doing when Windows 95 was known to be just around the corner?

I skimmed through the comments and you've got some good points. Analysts need to stop the comparing of older platforms and companies that aren't even close to RIM now than they were in the past. A good read and reviews.