Well it should come as no surprise that some analysts out there still aren’t giving RIM a chance with the release of BlackBerry 10. The stock price has been climbing steadily in the weeks leading up to the launch of BlackBerry 10, but Citigroup analyst Jim Suva isn’t buying into the hype.
In a recent interview with Forbes, Suva made it clear that he does not believe BlackBerry 10 will signal a rebound for RIM, and that he is sticking to his Sell rating with a share evaluation of $6. Suva had the following to say during his interview with Forbes,
“Over the past few months, management has been actively promoting the benefits of their redesigned operating system across several countries and has been drumming up developer support for the new OS,” he writes in a research note. “We expect the company to distribute samples of the hardware devices (2 models expected all touch & QWERTY keyboard) at the launch for demo/review purposes. We are also not surprised by recent carrier announcements to support the new BB10 devices. We remind investors that carrier support is naturally expected given minimal risk on part of the carriers to support these devices. While we acknowledge sentiment to improve as launch date nears and carriers announce support, we remind investors that actual sell through matters to determine the true financial impact that the new OS and hardware will have on the company’s financials, especially in an increasingly competitive environment.”
Suva is basically stating that even with the developer support that has been shown with BlackBerry 10, this will still not translate into real work sales. And of course without real world sales RIM will be in real trouble within the year’s end.
“Our own checks at CES suggested that several Chinese handset manufacturers including Huawei were coming out with attractive devices at very attractive price points ($150 ASP before subsidies) based on Android OS that could impact existing BB subs (especially in emerging economies) to consider alternatives as they upgrade,” he cautions. “Our own checks have suggested that enterprises (comprise less than 50% of total 79 million subscriber base) will take at least 4-6 months to test the new BB10 OS and some likely to offer BB10 hardware as a BYOD option.”
While the point of a $150 handset is well taken, RIM CEO Thorsten Heins has made it clear that he is keeping all avenues open when it comes to the future of RIM. So what is to say that RIM would not license out BlackBerry 10 to a manufacturer like Huawei or ZTE that could produce extremely cost-effective devices for emerging markets.
While I agree with some of the points that Suva makes, I still believe that BlackBerry 10 will make a bigger impact on the mobile market than many expect. The possibility of RIM licensing out their software to other OEMs is still something that could possibly work, look at what it has done for Android. We still have a week before we finally see the final version of BlackBerry 10, so either way it is still to early to make any real judgments in my mind. Let us know what you think about Suva’s predictions in the comments.