ARTICLE @ Dell Deal:
Monday November 22, 2:50 pm Eastern Time
Research In Motion confirms Dell deal, stock soars
TORONTO, Nov 22 (Reuters) - Shares in technology company Research In Motion Ltd. hit a record high
on Monday after the company confirmed it is working with Dell Computer Corp. to launch a Dell-branded
version of its e-mail equipped pager.
The launch is expected by month-end.
Analysts said the arrangement was good for both Dell (NasdaqNM:DELL - news) and RIM
(Toronto:RIM.TO - news)(NasdaqNM:RIMM - news) and would add both to RIM's pager sales and its subscription revenues. It might also
lead to more co-development between RIM and Dell, the world's second-largest personal computer system supplier.
RIM shares surged C$5.10 to a record peak of C$85.50 on the Toronto Stock Exchange at midday and bounded up 4-9/16 to a record high of
59-3/8 on Nasdaq.
RIM said it expects Dell to begin offering the BlackBerry pager, a device that can send and receive e-mail, as of November 30.
``This announcement marks the beginning of a strategic relationship between Dell and RIM that will deliver significant value to corporate
customers. BlackBerry, the leading wireless e-mail solution, will now be available from Dell, the leading direct computer systems company,' Jim
Balsillie, chairman and co-chief executive of RIM, said in a statement.
Analyst Robert Stone of SG Cowen in Boston said the partnership with Dell -- a computer firm narrowly focused on the business customer -- is
``very significant' for the Waterloo, Ontario-based pager company.
``It's right in the sweet spot of RIM's target market and it's a sales machine that works very well,' Stone said. ``So it's a great incremental
channel for RIM, but it's also a logical incremental product for Dell to offer its customers.'
It is a ``no-brainer' for Dell to market a useful product to its customers that can offer it additional margin and the deal will give RIM access to a
wealth of new potential subscribers, he said.
``There's still lots of triggers for additional upside going forward and the most important thing that people should remember about the
BlackBerry is that it isn't just a product, it's also a service,' said Stone, who has a ``strong buy' on the stock and a near-term target price of $60.
Duncan Stewart, fund manager at Tera Capital in Toronto, said the news would be well-received on the street.
"Yes, it's what we've been looking for," he said. |
