Channel Checks Show Blackberry Sales Not Pressured by iPhone

Canaccord Adams is out with a huge call on Research in Motion (RIMM) after they conducted their mid-quarter channel checks with leading global handset carriers and partners, including AT&T (T), Vodafone (VOD) and Verizon (VZ). They did this to ascertain the fact and fiction of some recent comments made on Wall Street.

Canaccord believes that RIMM's device shipments and activations are about 20-30% ahead of plan for June and July up to the 14th for all carriers. At AT&T, June came in at 20% above May, and July is tracking, based on data up to Monday, to be flat to up 5% (yes, the iPhone carrier). Blackberry sales have seen no adverse impact from the recent iPhone 3G launch.

They are raising their Q2 revenue and EPS from US$2.62 billion/US$0.89 to US$2.67 billion/US$0.92. This is based on new Q2 shipments and net sub adds of 6.25 million and 2.7 million, respectively (previously 6.1 million and 2.6 million). The firm continues to believe that Bold will be launched in limited capacity in August, followed by major global releases in mid-September. They expect Kickstart, Javelin and Thunder in FQ4. Reiterates BUY rating and US$225 target.

RIMM continues to be on Canaccord's Best Ideas list.

Notablecalls: This is a pretty big call that should give the stock a significant boost. Kudos goes to Canaccord's Peter Misek for excellent channel checks.

Comments

[Umm, yeah]

Well it's certainly good news for RIMM, but the 3G iPhone launched on what, July 12th? Still pretty early to be proclaiming all that much.

[Umm, yeah]

>< ...sorry for the red font. Dunno what happened.

[top_tier]

So at ATT July is tracking to be 75% below June growth it appears. Of course Verizon is a pure play for the Blackberry since the iPhone doesn't sell there, as for Vodafone, it has the rights to sell the iPhone in just a portion of the countries it has networks in. So, for a better picture, how many subscribers did Verizon add in June? And Vodafone in the countries where it doesn't have the rights to sell the iPhone? These networks don't have competition from the iPhone in a direct way so the research is spurious at best.

[Hardhead]

Holy cow $225 - I think they been drinking something other than Moosehead beer! RIMM will be lucky to get back to 120.

Yesterday, Needham’s Charlie Wolf cut his 2008 EPS estimate to $3.70 from $4.05; for 2009 he goes to $4.80 from $6.25. He puts fair value on the stock at $87. I agree with him.

tinyurl.com/58jsyl

I think Canaccord Adams has been watching too much Cramer.

HH

[Money George]

Verizon is way to big of a company to be a pure play for Blackberry! There might be some slight movement, but you would be better off owning RIMM.

[top_tier]

User 227556, you miss the point, Verizon is a pure play for RIMM in the sense that it doesn't sell iPhones, it does sell a myriad other devices but that's not relevant in my discussion. It's a forgone conclusion that RIMM and Apple are the heavyweights for smart phones. Verizon doesn't sell iPhones so it's sales for smart phones is from a captured audience. An IF Verizon is gaining subscribers it isn't because of the strength of the Blackberry since all the carriers sell them. The only relevant numbers comparison is how the carriers that sell both, Blackberry vs iPhone, which is selling higher volume of said, this juxtaposed to new subscribers globally that carriers sanctioned to sell the iPhone are stealing from carriers that don't sell the iPhone.

[Azazello]

there were no iPhones to compete with -- they were sold out since late May. I, too, would plan propagandistic research, sweating bullets in dread of what is coming. Denial works for a bit, then comes anger, and later, perhaps, negotiation and resolution/acceptance....
Cheers!

[FreeRange]

I'm sorry, but who is Cannacord Adams again??? Ah, there it is, a Canadian based company. And they and this author are trying to draw conclusions about RIM sales versus a phone that wasn't out yet?

[.crazylegs..]

Only time will tell who is correct. Next month's channel checks should be much more telling. If he is in fact correct that the first half of the quarter's shipments were ahead of schedule, then this gives RIM some cushion for iPhone defections, which there had to be some. It seems that everyone thinks iPhone is going to really hurt RIM. This will be proven wrong in time. iPhone will HELP RIM by bringing lots of attention to smartphones. For the price sensitive buyer, many BBs can be had for free with contracts plus RIM is actively working with carriers to offer flexible BB data plans. This is RIM's secret weapon of elasticity that no one is discussing.

[Armando]

Let's do a channel check in eight quarters, by then Apple will have developed its' stride.

[Armando]

Do a channel check in eight quarters, by then Apple will have developed its' stride.

[F. J. Taylor]

Help me here... iPhone has been sold out since May in all stores, and the 3G sold out in all AT&T stores and most Apple stores on Saturday...

Our nearest AT&T dealer (in a small town in Oregon) has been out since mid-day Saturday, and is now only taking special orders, as they don't expect regular stocking for 4 - 6 weeks.

I heard the same story all over the US. Neither RIMM nor any other device I know of has ever come close to a million sales in two days...

I like Blackberry - but I love iPhone. BTW, I have been with Verizon since they were Airtouch, have a family plan with four lines, and love their service - but I am going to have to switch to AT&T - because Verizon made the unbelievably stupid move of refusing Apple when they offered them the iPhone first...

As to RIMM - this article is more whistling in the dark past the graveyard at midnight. The hard-core crackberries will never give them up - but then, there is still an "Apple II Forever" programming cult - and one for Newton...

The questions raised above by posters are all good ones - and I think we shall see the results shortly.

[DanielJacome]

very hard for RIMM to see the same multiples it has seen in the past...