Monday, November 13, 2006

Calls of Note Part 1

While several firms are likely going to commment (or have already done so) on news of Motorola (NYSE:MOT) buying Good Technology, I think JP Morgan deserves to be highlighted as the co was visiting Research in Motion's (NASDAQ:RIMM) HQ at the time when the news hit.

JP Morgan's Paul Coster notes that RIMM's Jim Balsillie seemed unsurprised by the news and expressed the view that though Good positions Motorola to make the enterprise pitch, the acquired company has insufficient subscriber base and functionality to displace RIM at the carrier or in the enterprise. He estimated Good's subscriber base at under 200,000. He likened the acquisition to Nokia's acquisition of Intellisync. The firm views Good's push solution as superior to Intellisync's but they otherwise agree with his view.

Commenting on general business trends the management noted that production started in Waterloo but is now scaling in Mexico too. Vodafone units are in production at the plant.
RIM expects about 200K units to be added to channel inventory this quarter. Mr Balsillie stated that Pearl "results are obviously positive", with consumers "aspiring up to the product". The Pearl data-plan attach rate is above 50% and below 80%, and management is designing marketing programs (a 'tiered' offering) to try and capture a higher percentage of data subscribers in the future. Discussions with management suggest that new versions of the Pearl will come to market in quick succession in coming months, including a Cingular version. Firm notes they received no direct confirmation of the Blackberry 8800 (aka as "Indigo") though a RIM employee conceded that there is room in the company's display cabinets for this new product (see www.blackberrycool.com for details of Indigo). Mr Kavelman stated the company's intention to publish re-stated audited results before the next quarterly results. Mr Lazaradis stated that RIM expects to introduce hybrid (cellular plus WiFi) RIM devices soon, though he would not commit to a timeframe. He believes RIM's 3G stack is well positioned to support session hand-off from cellular to WiFi.

Reits Overweight.

Notablecalls: Not actionable but good to know category. Given the bounce RIMM staged on Friday I would not be looking to go long this one here.

1 comment:

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