Research In Motion Ltd (BBRY) Fails to Impress Credit Suisse at MWC

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Research In Motion Ltd (BBRY) Fails to Impress Credit Suisse at MWC
Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) or “Blackberry” failed to impress analysts from Credit Suisse (CS) who have a report out on MWC. We earlier posted Credit Suisse’s notes regarding Apple. The analysts had mixed opinions regarding Apple. Regarding  Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) they have more negative views. Credit Suisse can be counted as a member of the BBRY bearish camp. We note their key findings below.

Having already seen a number of delays in the launch of its new smartphone operating system, Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) has finally announced its new BB10 platform. CS sees a limited ability to gain meaningful traction in the smartphone market and see BlackBerry only shipping 26mn devices over the next four quarters of which 15mn are BB10 based on several factors discussed below. Specifically, CS believes that over the next 12 months while Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s hardware business will see brief renaissance, while visibility on this and gross margins are low.

Blackberry revenue model according to Credit Suisse estimates

CS believes that BBRY “Hardware is ok, but nothing special.” A glance at the picture inserted below shows that the new BBRYy devices boast an array of high quality features. The Z10, which is an all touch screen device, includes a dual core processor 1.5GHz, an 8MP camera and a 4.2” screen.

Research In Motion Ltd (BBRY) Fails to Impress Credit Suisse at MWC

At a price point of $599 unsubsidized, this positions the device at the high end of the smartphone market and with a comparable specs versus some peers including the iPhone 5. The Q10 is a hybrid QWERTY keyboard touch screen device which looks very similar to the BB7 Bold handset. While BBRY disclosed few features, they noted that the device will have a 3.1” touch screen in addition to the physical keyboard.

A crowded market at the high end. The challenge of a newcomer or someone trying to reenter the high end of the smartphone market such as BlackBerry or Nokia is that consumers here seek a powerful compute experience i.e. across smartphones, tablets and PC’s, i.e. Apple or they desire the highest quality specs on a device like the Samsung Galaxy SIII. The new Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) Z10 device while positioned in this segment offers neither and as such CS believes that “there is a only limited room for their share. Further the significant high end launched due to hit the market of this year poses a further challenge.”

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