UPDATE: Silicon Alley is retracting its previous post that suggests that BlackBerry Storm returns are higher than normal. A Verizon Wireless (NYSE: VZ) rep told Boy Genius: “The Storm has the lowest return rate of any of our PDAs and at this point in its life cycle, it has the lowest return rate of any PDA we currently sell.” Meanwhile, RIM’s earnings were also strong, see our post on results here.
As Research in Motion (NSDQ: RIMM) prepares to report third-quarter earnings today after market, there’s two things to consider: what affect will the down economy be on sales; and will the Blackberry Storm boost or hinder the company’s performance? AP reports today that the Waterloo, Ontario-based company issued disappointing earnings guidance at the beginning of December of 81 cents to 83 cents per share, excluding one-time items, on sales of $2.75 billion to $2.78 billion. While speculation is rising on the return rate of the Blackberry Storm, the company’s first touchscreen phone that was full of flaws when it first launched.
Along with the BlackBerry Storm, the company also launched its first flip phone called the Pearl Flip. Deutsche Bank analyst Brian Modoff wrote in a note to investors: “Beyond macro concerns, we think RIM faces significant challenges,” “Their entry into mass consumer devices has revealed cracks in their model. In particular, the poor showing of the Blackberry Storm indicates to us that launching four new products in a year is more than they are capable of. The company is now dependent on producing hit products; not only is the Storm not a hit, but there is nothing in their pipeline for the foreseeable future.”
Meanwhile, there’s speculation that consumers are returning the Storm to Verizon Wireless at a fast clip. As we reported and many others, when the phone first came out it was full of bugs, but a recent software upgrade has reportedly made the device more stable. Still, Boy Genius reports a startling figure that between 35 and 50 percent of the Storms are being returned. And, Silicon Alley reports that Verizon Wireless has extended its return policy through Jan. 15 for all phones purchased by Nov. 16 — before the Storm went on sale, and there’s plenty of anecdotal evidence on Twitter that people are taking the company up on its offer.
RIM’s stock is trading down about 62 cents today at around $40 a share. As recently as mid-September the stock was trading as high as $100 a share.
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