AOL Money & Finance

Will RIM's deep dive into consumer market yield treasure?

More

BlackBerry maker Research In Motion (NASDAQ: RIMM) is set to release its fourth-quarter earnings results after the closing bell today. According to analysts polled by Thomson Reuters, the Canadian-based mobile phone manufacturer is expected to ring up a profit of 84 cents a share on $3.42 billion in revenue -- a big feat for any company during the current economic climate.

The company has plenty going for it. It has millions of loyal subscribers and sales of "smart" phones are expected to climb this year, in sharp contrast to the outlook for the overall wireless industry. But the company faces some headwinds as well. Increased competition, a lagging stock price and concerns that its expansion into the consumer market could take a bite out of profits down the road.

How well Research In Motion can hold up during the economic slump is definitely on the minds of investors and analysts alike, who will be combing through the company's outlook for clues about its future. In February, RIM said it expected that during the fourth quarter it added 20% more subscribers than the 2.9 million forecast in December based on strong holiday sales. Will its growth slow in the months ahead?

How will its expansion into the consumer market impact its bottom line?

The company has done quite well retaining customers and many current subscribers just can't seem to get enough of the device. Take President Barack Obama for instance. Our tech savvy commander-in-chief couldn't bear the thought of parting with his beloved gadget and got special permission to continue using it after taking office to chat with chief White House staff and close family and friends. Such nonrestricted e-mail communication in the past was prohibited from use by the president because of security concerns.

But the "CrackBerry," as it's been dubbed, might be losing some of its high. Users shared mixed views during a Facebook discussion on the topic. Dasha Ross, Senior Manager, Public Relations for Marriott International exclaimed, "Love my crackberry! I have the Bold. Just got it and it's great! photos, video, music, Internet, e-mail, oh yeah and it rings too. lol."

But former BlackBerry subscriber Damon Lipscomb, a Web Production Specialist at Johns Hopkins School of Medicine wrote, "The BlackBerry is overrated. I accomplish much more with my MotoQ9c. It works better with organizations that use Exchange as their mail client and I can use custom apps like the Opera Browser, Google maps, Pandora and a Twitter app for free." And then of course, there's Apple's (AAPL) iPhone, which continues to give RIM a run for its money.

Amid increased competition, RIM is expanding its reach beyond the business niche, honing in on the consumer market. On Wednesday, the company took a page out of Apple's playbook, rolling out a one-stop shop for applications. Out of the 1,000 add-ons available, the top downloads by BlackBerry users (as of mid-day Wednesday) were news browser Viigo, music service Shazam and a Facebook program. The company is also offering generous revenue-sharing deals with software developers and cell phone carriers as part of the plan.

"BlackBerry App World aggregates a wide variety of personal and business apps in a way that makes it very easy for consumers to discover and download the apps that suit them while preserving the appropriate IT architecture and controls required by our enterprise customers," RIM President Mike Lazaridis said in a release.

Also coming soon to BlackBerry screens: full-length downloads of television shows from networks including NBC, CBS and MTV.

As we wait for the earnings results, here's the buzz on Research In Motion around the Web:

"RIM is gaining market share in a market that still appears to be growing despite the economic environment," said Scotia Capital analyst Gus Papageorgiou. "Although margin deterioration has been an issue we believe that trend will stabilize. We believe street expectations are too pessimistic."
(Canadian Press)

App Store Review: "The download process is simple and straightforward, but we still hate the fact that RIM wasn't able to implement a backend payment structure of their own."
(MobileCrunch)

"Option traders are now betting that the response to the actual earnings will be bullish and expect its shares to rise," said Chris McKhann, analyst at Web information site optionMonster.com."
(Reuters)

"RIM has a lot of pressure from a competitive standpoint; its margins are being squeezed as they launch lower-end handsets to capture greater market share," he said, adding that an app store is a way to capture more revenue."
(TechNewsWorld)

TV Service Analysis: "No one will use the service for the same reason that very few people watch feature-length films on Apple iPods. The screens are too small and glare ruins the picture. No one should count on the product to help RIM sales."
(24/7 Wall St.)

Reader Comments (Page 1 of 1)

Symbol Lookup
IndexesChangePrice
DJIA-17.2410,433.71
NASDAQ-6.832,169.18
S&P 500-0.591,105.65

Last updated: November 25, 2009: 03:25 AM

BloggingStocks Exclusives

Hot Stocks

DailyFinance Headlines

Latest from BloggingBuyouts

TheFlyOnTheWall.com Headlines

    BioHealth Investor Headlines

    WalletPop Headlines

    My Portfolios

    Track your stocks here!

    Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

    BloggingStocks Partners

    More from AOL Money & Finance

    WalletPop Headlines