December 22nd, 2006
Buzz builds early for RIM's Indigo
It's no secret that Research In Motion's Pearl device is a big hit, but folks are already speculating on how the company's next "Indigo" and "Crimson" smartphones will fare.
The Indigo and Crimson codenames are rumored to be different flavors of an upcoming BlackBerry 8800. These versions will build on the Pearl's success, be thinner, offer Wi-Fi, a full QWERTY keyboard and play MP3s. Digital cameras will also be an option.
Keep in mind none of this speculation is the fault of RIM. CEO Jim Balsillie and his management team didn't utter the words Indigo once on the company's Pearl-powered third quarter earnings conference call. However, they did allude to new product launches coming in the next three months. Meanwhile, RIM is stocking up on raw materials to get ready for liftoff.
CFO Dennis Kavelman said RIM is expecting hardware shipments to top 2 million units due to "the ongoing ramp of Pearl, existing customer demand for replacement and upgrade devices, and new products that we are planning on launching in late Q4 and early Q1."
As for what products may be launched in the next few months, Kavelman said "some of them will target enterprise users, some of them will be targeting both and sell well into both markets. So, it's pretty tough to talk about things that haven’t been officially announced yet."
Of course that didn't stop others from talking about those new products. Morgan Keegan & Company analyst Tavis McCourt said Indigo is likely to launch in the February and May quarters.
These lower-priced Indigo and Crimson models will "drive substantial acceleration to revenues at RIM, but provide less incremental profitability than the company's base of business."
The plan for RIM: Build on Pearl's success in the consumer market. Reading between the lines of RIM management commentary, McCourt reckons that the company is targeting a late February launch for Indigo, but giving itself enough wiggle room on its financial outlook in case it gets pushed back to March.
Why all the focus on Indigo? Pearl has become such a hit with prosumers and consumers that expectations are building for RIM's next phase of products. RIM shipped 1.8 million hardware units in the third quarter and Pearl is likely to have contributed as much as 400,000 to 500,000, according to RBC Capital Markets analyst Mike Abramsky.
Bottom line: RIM has a shot to really leverage its intellectual property into a dominant smartphone position. Expect the Indigo buzz to begin in earnest right after the holidays.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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