RESEARCH IN MOTION (RIMM) ON WAY TO $20 (MSFT), (AAPL), (GOOG)

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Readers may want to start from my previous article on Research In Motion titled What Is The True Value Of Research In Motion? In the article I described various scenarios for Research In Motion (RIMM). One of the scenarios I described was for Research in Motion to continue on its present path. The earnings report just issued shows that prediction is coming true.

The earnings for the quarter were $0.80 compared to the consensus of $0.88.

Revenues for the quarter fell 10% to $4.17 billion compared to the consensus of $4.47 billion.

For the next quarter, the company projects revenues of $5.3 billion to $5.6 billion compared to the consensus of $5.3 billion.

There are two shockers in the earnings report.

  • The company shipped only 200,000 Playbooks compared to the estimates of approximately 500,000.
  • Gross margins declined from 43.9% to 38.7%.

The conference call was downbeat. The company talked about the progress it has made.

The availability of new consumer Apps and multi-media and video content including BlackBerry Video store which will have 10,000 movies and TV shows available on demand to buy or rent as well as new movie releases on the same day as DVD availability and of course, with the built in HDMI output, the ability to enjoy videos on your TV without the need to purchase additional system components.

The market does not care about the foregoing improvements.

On the conference call, the company further suggested that its present operating system and the new operating system QNX will coexist for a while. Clearly, it is taking the company longer to…Read more….

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