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Mike Genovese, analyst at MKM Partners, weighs in on RIMM’s upcoming earnings report, and if Blackberry can have a comeback despite Apple’s domina...
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Investors showing Research in Motion some love -- -- over the last couple of days after the company surprise streets saying.
It subscribers baby -- actually grown so is the Blackberry.
Really about to rebound or is this just a dead cat bounce -- Genovese is the managing director and senior Telecom equipment analyst.
CEM partners and he joins me now Mike good to see if thanks for coming in.
Thank you David Lloyd first of all this may sound kind of sacrilegious but do you believe these subscriber numbers is a possible that they are -- somehow.
-- I think those are correct numbers but the thing about is there's a mix shift to Latin American southeast Asia so they're actually losing subscribers.
In the US and Canada the UK but they're winning subscribers -- not in emerging markets -- I think that's what's going on there now why is it that.
They are winning in in these other markets rather than -- -- and an apple.
I'm sorry he -- -- breaking up I didn't hear the question -- why I'm I'm asking about the competition you know iPhone and apple is very interested in making inroads in these other markets.
Why are they not beating Blackberry and these other market.
It's.
Well look it's -- it's -- it's a lower price point blackberries.
From -- emerging markets that are doing well for the the iPhone is a little bit too high and for those markets most of the android models are too -- for those markets.
But the real test for -- what we're gonna be watching.
You know it's gonna really determine the success of this company going forward.
Is there launch of the Blackberry ten operating system in January and that's gonna take apple on.
Head on in the high end as Smart phone market and before yesterday's developer conference and before the the demonstration they gave.
I would've given -- less than a 10% chance of making it.
But from what I saw yesterday the enthusiasm from the developers and the quality of the operating system.
I would raise that out about 25% some certainly more upbeat on their prospects but still I still think -- for -- fighting an uphill battle.
What was it about the DD ten Blackberry ten that piqued your interest.
Well it seem like your first of all people already are familiar with.
With Blackberry so unlike unlike -- the windows -- phones for Nokia and others this is something that we're familiar with.
But secondly just the way you handle the -- the ability to handle -- one.
In one hand -- you -- you not really open any applications that have all your messaging.
While your social media all your meetings the ability to separate your personal from your business the very fast predictive.
Tax that it did basically this is that -- is when we can walk through the airport with a bag over one shoulder and your phone in one hand you do everything that you need to get -- And it looks like they have a fighting chance here.
On the other hand the new the new iPhone I've held it in my hand it is 20% wider.
It is 18% thinner it is easier to hold in one hand like a Blackberry.
VI I I I certainly agree -- that -- I think the I think that that the iPhone 5 in the I was -- six are both good products I don't -- this comes down -- is there room for -- thirty ecosystem -- certainly we have the apple ecosystem we have -- Google Android ecosystem.
-- a you know Blackberry and windows are fighting it out.
And I'm I'm meeting Blackberry here the upper hand over windows I really would not bet on windows eight.
Or or that windows is going to be a popular operating system.
Now you know as you -- -- identified rim is up about 11% in the last couple of days I think the momentum is -- continue this week.
-- they pre announced the positive subscriber number I think the important number we're gonna get tomorrow after the close is that they're building their -- number so.
For this quarter this August court of the reporting revenues are gonna be down 40% year over year they're gonna lose fifty cents per share and earnings but still.
The free cash flow story is pretty good -- and they if if if if -- their cash last quarter -- -- point two billion if they come in at about 2.5 billion in cash.
This quarter which I think they will.
I think we're gonna get another 1015% this week and they really need that cash and cash reserve to to launch this -- if you Blackberry ten operating system.
So Q so cash flow is going to be the one key element that your gonna be looking at -- with the earnings.
Yeah actually -- subscribers and cash now that we know the subscriber number already its cash.
You know I think I think small changes you -- -- they beat by little miss by a little on revenue and EPS.
Not such a big deal now Mike we have to go but a year from now.
I am gonna be am I gonna be holding a black very in my hand -- iPhone or something else.
Well like I said before I think there's about I'm I'm giving it about a 25% chance that he'll be holding a Blackberry.
That's not very good.
It but you know yesterday yesterday before 11:30 AM it was gonna lose about 5% so it's moving in the right direction might Genovese and -- partners good to see you Mike thanks for coming in appreciate it thank you.
