Goldman's Simona seem to be the only one who understand the situation on service revenue. I have a post titled "Surface Revenue Confusion" to also try to clear the air.
Some has pointed out that whether it is this or other, shorts will attack anyway, they just need something to hang on to.
Some has pointed out, the earnings results beat expectation, the BB10 is progressing well with now 150 carriers' support, compares to 50 just two months ago. This number is growing as Thorsten speaks. One overwhelming message he got from the carriers is, "They want a third ecosystem". Stock has gone up nicely to $15.5. Thorsten also mention strategic partner a few times.
Then all in a sudden, just one question that was not answered to their liking because it is premature and had to wait till Jan 30. The attack starts and snow balled from there.
One poster said he can't sell during that time. I guess computer trading was at work. They are much faster than your finger.
Just to confuse the computer, may be we should all randomly put in sell orders at much higher price. Remove the visibility of stop loss orders. Keep quiet and don't post here so the computer can't measure market sentiment.
One last thing I want to say is some has complaint about not able to post here. One way to get around that is to click the "Perma Link" button besides your name and date near the title. Copy and paste that link to a new post and it works. My "Service Revenue Confusion" is posted that way. Why is that I have no idea. May be some geek wrote a program to block a direct posting but not yet got to the heart of the Yahoo storage.
Merry Christmas to All. Peace on Earth and Good Health!!!
Shares of RIM (NASDAQ: RIMM) declined this morning on fears related to changes in its service revenue model for BB10. Goldman Sachs believes the decline is a result of "misunderstanding". Analysts expect it to decline, not disappear.
"Importantly, we believe there may be a misunderstanding that as a result of the move to BB10, all of RIM's services revenues are at risk. Rather, we believe its current installed base will not be affected by the different BB10 pricing structure, though it will continue to be impacted by competition," said analyst Simona Jankowski.
New consumers who purchase a BB10 device are not likely to pay a service fee, but importantly, existing customer will. New enterprise subscribers would probably pay some level of service fee, though plans will be tiered and APRU could declined. New BB7 subscriber will pay service fees, noted the analyst report.
A second point worth noting is increased carrier support for BB10, seen by some on Wall Street as a trade-off for lower service fees.
"Importantly, RIM noted that BB10 is now in technical acceptance programs with over 150 carriers, up from 50 carriers about three months ago," said Jankowski.
Jankowski thinks there is a 30 percent probability of a "bull case" for Research In Motion. In this scenario, RIM stock would be worth $30 per share.
Goldman Sachs has a Buy rating on RIM with a modified price target of $17.00 (from $16.00).