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MKM Partners Managing Director Mike Genovese on why sales of BlackBerry 10 phones in Spring are key to Research in Motion’s future.
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-- -- -- Research in Motion the dog not been told by doing Research in Motion reporting earnings moments ago as we know let's get -- -- -- he he is MKM partners managing director and senior analyst okay give it to us what do you think of these numbers is that that number -- subscribers on the Blackberry.
Disappointing or -- could've been much worse kind of reaction.
What was actually -- -- first thanks thanks Lister thanks for having me -- I thought was right and it's right in line with my expectation I had 75 million consensus is up a little bit to eighty point three.
I think this is a mixed report but the rally in the stock is and continue.
The most important thing here is a building up the cash two point nine billion they're gonna need that in the current quarter to spend on producing Blackberry ten and marketing the phones.
It you know -- subscribers a little bit disappointing cash good gross margins very good as ever as you've been saying this quarter's really not that important it's all about hope for the Blackberry can -- -- the playbook sales ticking up but how those kind of interest in -- it's hard to gain any traction in your tablet especially with apple and Kindle fire around.
It's still very low number 255000.
Is that is a pretty negligible number and and you know we're we're not focused on that much.
But but you don't they talk about a 150 carriers testing Blackberry.
-- they talked about 64 the fortune 500.
This is what investors are gonna focus on I do think the stock isn't -- could continue to go higher but I think it's too high and I think.
The phones will actually launch in March and by the summer we'll know whether it's been successful or not.
I think it was about a seven to one chance that it fails and the stock will end up a year from now much lower than it is now.
There's a 50% chance that goes to forty.
And that the -- home run here my so lot yet.
Sorry to interrupt but let's get to the Blackberry ten unveiling it this is the make you -- break it moment for this company can talk about playbook sales into -- else but if this doesn't come on strong.
It's really gonna be tough for this company to keep going.
That's right and you remember we live in a world now -- consumers decide what they want to buy and they wanna buy we know -- wanna buy apples we know they wanna buy android's and the carriers are they're not subsidizing phones as much as they used to they're not deciding.
The enterprises aren't telling people what they want as much.
And that's -- this is really do the carriers want this new Blackberry easy ten touch screen phone looks a lot like an iPhone -- running this new operating system.
And I mean I think it's a slim chance again 15% chance that they may get that's how I get my fair value at eleven because there's a 15% chance -- the stock -- -- forty.
But 85% chance that goes to -- six and to me the stocks ahead of itself but I don't think it's gonna go down until about three months after the -- -- It's -- you're actually put the point on the calendar here Mike you're saying that this will eventually not either be as -- -- as sparkly as whenever iPhone comes out with -- Samsung's.
Galaxy who knows.
You know in the bend so watch out if you own values gotta be careful for a couple of months out correct.
Yeah right -- -- -- US Canadian UK consumers have already largely moved on from Blackberry and it's very hard to get them back what we've seen recently is is is markets like France Spain Brazil.
Where where where rim is more successfully recently they're losing -- -- of market share there it's really hard it's really hard to get them back it's gonna need to be so much better than anything else out there.
And I think the chances of that of that action being -- -- are are fairly slam.
Is lagging behind but I -- -- online because you know some of us can't let go.
This kind of get old school and I don't like.
You know I actually I actually have two phones here I'm an iPhone and I don't -- -- hey yeah like now I'm telling you don't you know it worse when I travel I travel abroad in works I don't have to see the bill that the phone -- email works -- my company pays for -- they were -- -- I still I still have -- I mean it's the perfect situation is that I -- Canada is and -- partners managing director Mike thank you so much of Asia a lot of information things that he -- -- happy holidays.
