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Technology Stocks : Research In Motion TSE RIM Nasdaq RIMM -- Ignore unavailable to you. Want to Upgrade?

To: xtahce who wrote (816)	5/9/2001 3:11:10 PM
From: Sir Auric Goldfinger	Read Replies (2) \| Respond to of 989

Perhaps this will explain why RIMM is getting whacked today: "RIMM: Inventory to Burn at Aether FBC CREDIT SUISSE FIRST BOSTON CORPORATION Equity Research Americas Canada/Wireless Data Marc Cabi 1-415-816-7701 marc.cabi@csfb.com Kevin McCarthy 1-415-816-7701 kevin.a.mccarthy@csfb.com Randy Abrams 1-415-836-6336 randy.Abrams@csfb.com BUY MID CAP Research in Motion Limited (RIMM, RIM) Inventory to Burn at Aether Summary RIM Channel Partner Aether Systems held its Q1:01 earnings call this morning, announcing that it had $6 million in total device sales during the quarter but over half of its $32 million in inventory tied up in RIM devices. The company also guided to flattish device sales (also includes Motient transportation units) of about $6.3 million in the June quarter, suggesting several quarters inventory at that run-rate. Aether took a ~$2 million charge to write-down the smaller form factor RIM 950 device due to pricing erosion on that product. We anticipate other channels will require similar discounting to work off current 850/950 inventory and may lead to channels pushing that product through to work off inventory at the expense of larger form factor 857/957 sales. On the call, Aether management commented that it would move to a JIT inventory rather than accumulate large devices ahead of the sales ramp. We have seen this trend reported at modem suppliers such as NVTL and SWIR and believe this could cause a slowdown in new channel orders over the next two quarters. We believe management has taken efforts to guide conservatively ahead of the GPRS ramp (15% down sequentially for June), but believe near-term upside is limited due to this channel softness. We have more comfort with second half numbers, as we believe GPRS Blackberry service is set to commence customer trials in late May and tracking to ramp in the August quarter. We maintain our BUY. Price Target Mkt.Value 52-Week 04/27/012 (12mo.) Div. Yield (MM) Price Range $32.14 $0.00 None $2,700 $175.75-9.25 Annual Prev. Abs. Rel. EPS1 EPS P/E P/E 2/02E $0.21 187.5X 938% 2/01E $0.11 937.5 860% 2/00A $0.27 500.0 753% May Aug. Nov. Feb. FY End 2001E $0.00A -$0.02A $0.02A $0.10E Feb. 2000A 0.02 0.03 0.05 0.05 1999A 0.01 0.00 0.04 0.04 Net Cash (11/00) Book Value/Share (11/00) $11.21 Debt/Total Capital (11/00) Common Shares3 84.0 1Canadian GAAP, U.S. dollars 2On 04/27/01 DJIA closed at 10,810 and S&P 500 at 1,253. 3 Includes recent share issuance. RIM is a world leader in the design, marketing, and manufacturing of two-way messaging and radio devices. The company also provides wireless data services through its BlackBerry offering. CREDIT SUISSE FIRST BOSTON CORPORATION CREDIT SUISSE FIRST BOSTON CORPORATION Analyst: Cabi, M Telephone: (415) 836-7701 marc.cabi@csfb.com CREDIT SUISSE FIRST BOSTON CORPORATION CREDIT SUISSE FIRST BOSTON CORPORATION Copyright © CREDIT SUISSE FIRST BOSTON, and its subsidiaries and affiliates, 2001. All rights reserved. CSFB may, to the extent permitted by law, participate or invest in financing transactions with the issuer(s) of the securities referred to in this report, perform services for or solicit business from such issuers, and/or have a position or effect transactions in the securities or options thereon. In addition, it may make markets in the securities mentioned in the material presented in this report. PLEASE REFER TO TICKER CSFBDISC FOR IMPORTANT LEGAL DISCLOSURES. = = Research in Motion Limited = = RIMM: BUY First Call Corporation, a Thomson Financial company. ]