Conference Call Notations:
ragingbull.com
First off let's start with BLS, since the analysts couldn't leave it alone. It was stated that BellSouth ended up with an unexpected inventory due to BLS's timing for the PageNet expectations and the delay was due to the PageNet tribulations that is expected to be rectified with Arch Communications now in the picture.
This new BellSouth contract is on a "as needed basis" but it favours RIM because there is a minimum 100,000 unit requirement from BLS that starts off April 2000 at 10k/month and will increase to that of 17k/month after a certain period of time and the contract is to be processed through to the end of RIM's next FYE (Feb 2001). BellSouth also has the choice of increasing their order above the min. 10k/m requirement and they will then have a comfort level in maintaining less than one month's supply by the time RIM starts the first shipment. BellSouth is very committed to both the Interactive product/service and to the installation of 500 new base stations over the 2000 calender year.
When analysts asked for guidance in adjusting for the BLS delay they were told to adjust by C$7 to C$10 million (US$4.75-US$6.8) from their models. They also noted that there is a possibility of a good upside with the BlackBerry and OEMs etc.from this point. BLS shipment to begin in April 2000 which occurs during RIM's Q1'01 (March-May). The take-up of the BlackBerry was stronger that RIM expected for the first 2 weeks in December. RIM just finished a quarter with a 35% increase in revenues without one order from BellSouth......
The BlackBerry has taken off and this quarter held 20% of the revenue alone (hardware, software & service). As of the end of November there were 12,000 subscriber units with an approx. additional 2,000 beta turning over each month to a subscriber bases, about 1,800 companies/commercial utilizing the BlackBerry and there are 600 BlackBerry Servers in operation. We also know that after that date there are strong orders coming in with the likes of Merrill Lynch, CSFB and Gibson, Dunn & Crutcher L.L.P.(who BTW looked at the $599 Palm VII but was turned off by its cost and its limitations).
Dell is saying that this is the first product where the customers have called them demanding product information. It is up on their DellWare Guide, an internal Dell website, for use of Dell sales personnel who are now finalizing the necessary training in the BlackBerry and once that's established, well.... that's another chapter. To expect Dell, with regards to open direct sales, to take on that much responsibility, that soon, prior to training, wouldn't have been fair.
American Mobile with eLink has begun and Skytel (MCIWorldCom) adds to it in the next couple of weeks. They also have RCN Corp. and espernet, January launching in New York, along with 10 other ISPs and other major portals. The sales of the OEM 802/902 family of radio modems are strong and are expected to have major growth in the next year.
The 45.7% margin, for this quarter, is above the norm because of the unexpected increased non-reoccuring software revenues and it is expected to return to the 40% range.
-Ottawa (Kanata) Office officially opens tomorrow, congratulations!
-Competition?..."Chartreuse competes with Beer"
(I don't drink, so I might have misspelt Char..hic!)
-Instant Messaging, any suitable product enhancements?..."I think you can expect to find these things happening, driven by ISPs, you're on a good path (with that question)."
-Movement outside of N.A.?..."You can expect considerable clarity by next CC."
-Then there's the Java....new products... application enhancements....different form factors...
"They know where they want to be in 10 years and they know what they have to do tomorrow."
I'm sure others will add to this list if I've missed anything.
Best of Investing!
Xtahce
PS: Thanks to Ray Sharma, CSFB, for bring up the article by Ian Austen of Canadian Business Magazine that put many a question into the investor's mind about the Dell deal. It gave Jim a chance to address it and found it to be an "absolute mischaracterization" and that "it couldn't have been more false". Ian, I wouldn't expect that you'd be getting any further information from RIM or DELL....Rogers Media Publishing Ltd. might cut you some slack but the investment community won't stand for this kind of sloppy journalism. (Rogers BTW sells/services the RIM Inter@ctive 850 pagers if you didn't know Ian) |
