November 24th, 2008
Will Storm's delays hurt RIM's Q3?
I know you’re probably on Blackberry Storm overload by now - but please indulge me once more. Last month, I asked all of you whether I should go iPhone or wait for the Storm. Overwhelmingly, you all told me to wait for the Storm, that it would be a game-changer. And so I did.
But, today, I don’t have one. By the time I got to a retailer late Friday morning, they were all sold out. Now, the supply has become an issue over a software glitch that’s being corrected. That’s kind of funny to me because, when I put a call out to Verizon Wireless a few weeks ago trying to get a launch date for the Storm, I was told the reason they don’t tie themselves to a date until the last possible minute is because they don’t want to get caught up in making a promise they can’t deliver on. Yet, that’s exactly what happened. Now, with an inventory problem on their hands, it looks like mid-December before another round of Storms will become available. Having them on shelves before Black Friday doesn’t look too promising now, does it?
Which leads me to the next point: Research in Motion, the maker of the Blackberry, was, no doubt, hoping to get those Storms sold and log those buyers as subscribers before the end of its third quarter on Nov. 29. Now, given the problems, we’re not really looking at big subscriber numbers for Q3 - and that’s prompted Citi’s Jim Suva to trim his estimates for subscriber growth, revenue, and profit, according to Silicon Alley Insider. He now expects RIM to report 2.7 million net subscriber additions in Q3, instead of the previous estimate of 2.9 million. Likewise, he now expect sales of $2.85 billion instead of $2.96 billion and an EPS of 85 cents, instead of 91 cents.
Meanwhile, JPMorgan analyst Paul Coster told clients in a note that the Storm has been greeted by “unambiguously strong consumer demand that has outstripped supply,” a positive comment that prompted shares of Research in Motion to rise today, up more than 3 percent at one point but closing down just over one percent at $45.26. Shares were down slightly in after-hours trading.
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Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
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