RIM (RIMM) Goes For Broke With BB10

December 21, 2012 7:30 AM EST Send to a Friend
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Price: $14.64 +12.36%

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Research In Motion Ltd. (NASDAQ: RIMM) stock is expected to open lower on Friday after the release of the company's Q3 earnings report. Despite a solid quarter, investors focused their attention on news of lower enterprise service tier and fears that RIM will not receive monthly services revenues for consumer BB10 subscribers.

Jefferies analyst Peter Misek put it this way:

"We believe RIM may have traded consumer monthly service fees (or a vast reduction in fees) in exchange for volume commitments and high ASPs. Carrier support dramatically increases the chance of BB10's success (we estimatean increased chance of success from 10% to 30%), but now RIM is playing without a safety net. If BB10 fails, it will likely be unable to stumble along and will either become a takeunder candidate or a niche business. If BB10 succeeds, its business model will more closely resemble other handset OEMs."

In other words, RIM is going for broke with the launch of its latest handset.

Jefferies has a Hold hold rating on Research In Motion Ltd. (NASDAQ: RIMM) with a price target of $13.00.

For an analyst ratings summary and ratings history on Research In Motion Ltd. click here. For more ratings news on Research In Motion Ltd. click here.

Shares of Research In Motion Ltd. closed at $14.12 yesterday.


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