Research In Motion Ltd (BBRY) BB10 Being Replaced by iPhone 5: MS

Research In Motion Ltd (BBRY) BB10 Being Replaced by iPhone 5: MS
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Research In Motion Ltd (BBRY) BB10 Being Replaced by iPhone 5: MS

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Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is in trouble if the trends described by Morgan Stanley are more widespread. Morgan Stanley held an April CIO conference and spoke with the CIO of three corporations about their spending on tech products. Two of the three CIOs said that they have switched from Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) to Apple Inc. (NASDAQ:AAPL) iPhone 5 (the third CIO’s company has almost no Blackberries currently).  In a report released today Morgan Stanley states:

CIOs continue to migrate their corporate liable devices to iPhones from BlackBerries, and Android to a lesser extent. BB10 hasn’t changed sentiment or direction of CIOs’ plans.

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How Morgan Stanley based the above comment on the remarks from just two (or three) executives is unclear (additionally, MS is bullish on BBRY), but MS could be assuming this is a wider trend among companies. Below we have the transcript of the conversation.

The three CIOs interviewed

Murshid is the CIO. for a title insurance business and we are a public company with revenue just under $2 billion.

Bhupesh is the CIO of a large office products company. He leads new technology strategies and applications for a large manufacturing company going on $6 billion and we’ve – it’s consumer goods right around labels and packaging.

Barry is the senior vice president and chief information officer for a consumer staples. Barry states ‘I think everybody’s pretty much familiar with the dairy line of products we have.’

‘We also the largest distributor of corn, wheat, soybean and alfalfa seed in the United States on behalf of Syngenta and Monsanto under the WinField brand and we own Purina Mills. So, we’re just under $15 billion in overall revenues; right around $5 billion for each of those portfolio companies.’

The companies are not identified by name. Ehud Gelblum is a tech analyst at Morgan Stanley.

Ehud Gelblum: So, let me switch gears a little bit and go to a mobile device strategy. Most places in the U.S. had BlackBerrys and a number of them have moved off into BYOD at this point and some of them are experimenting with MDM – mobile device management types of deals.

Can you – let’s start with Murshid, get you into the picture and then Bhupesh or Barry, whichever you have an opinion on this. Can you just explain what type of mobile strategy you have right now with mobile devices and how are you moving into BYOD, and has the very recent launch of the new Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) BB7 impacted your thinking in terms of which way you would go with MDM or mobile devices?

Murshid: OK, yes, thank you. OK, so, I think just about – if we roll back to 18 months ago, it was primarily was all BlackBerry – 99 percent, 95 percent was BlackBerry. Now the situation is we have almost, you know, 80 percent is all iPhones. So, we have replaced it with – over period the replace Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) with iPhone. We’re not inducting any Android at this point because of some security risks but we’ll move forward with iPhone. There is no plan to roll back any of those to BlackBerry at this point.

Bhupesh: Yes, I can add. This is Bhupesh. So, we also have similarly moved to iPhones. We are down 4,500 corporate devices and half of them have moved to iPhone and we expect majority of them to become (inaudible) this year.

Now, we did introduce Android and only couple of models that meet our security standards and encryption of data. So, we are introducing Android in a month and especially across the globe where you can get it at better prices.

Barry: So, first, we are about 60 percent iOS and 40 percent Android at this point in time. We will – you know, the only – I will not allow – we will not allow incremental Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) spend at this point. We have, I think, 11 Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) Blackberries remaining in the enterprise and when those come off of maintenance or a replace, they’ll be replaced with either an iOS or an Android device.

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