RIM (RIMM)’s Blackberry: What’s Cheap Still Sells

April 3, 2008 by Douglas A. McIntyre

Go to an AT&T (T) store. You can still get a Blackberry from Research In Motion (RIMM) for under $300, especially if you press the guy behind the desk.

Blackberry had a quarter most companies can only hope for in a recession. Revenue doubled in Q4 to $1.88 billion, much better than Wall St. expected. The company shipped 4.4 million smartphones during the quarter and 24 million for the year. It guidance was awesome.

The stuff that dreams are made of.

The success of RIMM may tell investors about one pocket of the economy which is still doing OK. Anecdotal evidence says that Apple (AAPL) is doing well enough with its iPhone. Some stores are out of the fancy SteveJobs-phone. Nokia (NOK) has indicated that handset sales are holding up.

On the consumer electronics side, sales of Ninendo Wii, Microsoft (MSFT) Xbox, and Sony (SNE) Playstation3 are running much better than was expected, as are the games that run on them. None of these things is terribly expensive.

PC sales are not doing as well as these other modestly price electronic gizmos and gadgets. But, a PC probably costs $1,500, at least if customers want to buy one that works.

The consumer seems to have a few dollars in his pocket, mixed in there with all that lint. He is willing to dish out for "cool" and inexpensive toys, some of which help him in his daily life and some of which entertain him. He can sit in his house, which may not be his much longer, and play games while he talks on the phone.

RIMM is OK. People love the Blackberry and it does not cost much,

Douglas A. McIntyre

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