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November 30, 2010, 11:47 AM EST
By Hugo Miller
Nov. 30 (Bloomberg) -- Research In Motion Ltd., the mobile- phone maker whose shares have surged since it unveiled a tablet computer to compete with the iPad, may sell fewer of the devices than investors project, said Susquehanna Financial Group.
Investors appear to be assuming RIM will sell about 10 million BlackBerry PlayBooks in the next fiscal year, Jeffrey Fidacaro, an analyst with Susquehanna in New York, wrote in a note today. That may be difficult given the growing number of tablets, from Apple Inc.’s iPad to Samsung Electronics Co.’s Galaxy Tab, and RIM’s narrow focus.
Selling 10 million units “may be challenging for RIM to achieve, particularly as the PlayBook is positioned as a ‘professional device’ and initially as a companion linked to a BlackBerry,” said Fidacaro, who has a “negative” rating on the stock.
RIM shares have risen repeatedly as the company has provided details about the device, including an 12 percent rise in two days last month after Co-Chief Executive Officer Mike Lazaridis demonstrated the PlayBook in action. RIM is also winning customers for the tablet ahead of its first-quarter debut. Toronto-based insurer Sun Life Financial Inc. has agreed to buy as many as 1,000 PlayBooks, and the Canadian banking unit of ING Groep NV says it will also purchase the device.
RIM rose $3.19, or 5.4 percent, to $62.18 at 11:18 a.m. New York time in Nasdaq Stock Market trading. The stock had dropped 13 percent this year before today.
Smartphone Losses
The rise in RIM’s stock suggests investors are betting RIM can sell 10 million tablets in the fiscal year starting in February or 8 million tablets at a higher profit margin than it currently has, Fidacaro wrote. He is forecasting the company will sell 8 million PlayBooks at an average price of $459.
Apple, which leads the tablet market, sold 4.19 million iPads last quarter.
RIM, based in Waterloo, Ontario, continues to lose share in its smartphone business to Apple and phones that run Google Inc.’s Android software. RIM’s global market share dropped to 15 percent in the third quarter from 20 percent a year earlier, according to researcher IDC.
RIM plans to report fiscal third-quarter results on Dec. 16 and said in September it expects revenue to be $5.3 billion to $5.55 billion and profit per share will range from $1.62 to $1.70. Analysts are expecting results at the low end of those ranges, with an average estimate of $5.38 billion in sales and per-share profit of $1.63 billion, a Bloomberg survey shows.
Investors will be watching for indications of how the BlackBerry Torch sold last quarter after going on sale in August. The phone, which features a touch screen and slide-out keyboard and is built on RIM’s new operating system, is designed to go head-to-head with the iPhone and Android touch-screen devices like the Droid.
Peter Misek, an analyst with Jefferies & Co. in New York, today raised his rating on RIM to “buy” from “hold”, citing the strength of international sales growth and the quality of its new operating system.
--Editors: Peter Elstrom, Ville Heiskanen
To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
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Nov. 30 (Bloomberg) -- Research In Motion Ltd., the mobile- phone maker whose shares have surged since it unveiled a tablet computer to compete with the iPad, may sell fewer of the devices than investors project, said Susquehanna Financial Group.
Investors appear to be assuming RIM will sell about 10 million BlackBerry PlayBooks in the next fiscal year, Jeffrey Fidacaro, an analyst with Susquehanna in New York, wrote in a note today. That may be difficult given the growing number of tablets, from Apple Inc.’s iPad to Samsung Electronics Co.’s Galaxy Tab, and RIM’s narrow focus.
Selling 10 million units “may be challenging for RIM to achieve, particularly as the PlayBook is positioned as a ‘professional device’ and initially as a companion linked to a BlackBerry,” said Fidacaro, who has a “negative” rating on the stock.
RIM shares have risen repeatedly as the company has provided details about the device, including an 12 percent rise in two days last month after Co-Chief Executive Officer Mike Lazaridis demonstrated the PlayBook in action. RIM is also winning customers for the tablet ahead of its first-quarter debut. Toronto-based insurer Sun Life Financial Inc. has agreed to buy as many as 1,000 PlayBooks, and the Canadian banking unit of ING Groep NV says it will also purchase the device.
RIM rose $3.19, or 5.4 percent, to $62.18 at 11:18 a.m. New York time in Nasdaq Stock Market trading. The stock had dropped 13 percent this year before today.
Smartphone Losses
The rise in RIM’s stock suggests investors are betting RIM can sell 10 million tablets in the fiscal year starting in February or 8 million tablets at a higher profit margin than it currently has, Fidacaro wrote. He is forecasting the company will sell 8 million PlayBooks at an average price of $459.
Apple, which leads the tablet market, sold 4.19 million iPads last quarter.
RIM, based in Waterloo, Ontario, continues to lose share in its smartphone business to Apple and phones that run Google Inc.’s Android software. RIM’s global market share dropped to 15 percent in the third quarter from 20 percent a year earlier, according to researcher IDC.
RIM plans to report fiscal third-quarter results on Dec. 16 and said in September it expects revenue to be $5.3 billion to $5.55 billion and profit per share will range from $1.62 to $1.70. Analysts are expecting results at the low end of those ranges, with an average estimate of $5.38 billion in sales and per-share profit of $1.63 billion, a Bloomberg survey shows.
Investors will be watching for indications of how the BlackBerry Torch sold last quarter after going on sale in August. The phone, which features a touch screen and slide-out keyboard and is built on RIM’s new operating system, is designed to go head-to-head with the iPhone and Android touch-screen devices like the Droid.
Peter Misek, an analyst with Jefferies & Co. in New York, today raised his rating on RIM to “buy” from “hold”, citing the strength of international sales growth and the quality of its new operating system.
--Editors: Peter Elstrom, Ville Heiskanen
To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
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