In addition to making money from selling BlackBerry smartphone handsets, Research in Motion (TSE:RIM), makes more than $4 per month for every BlackBerry user by charging service fees to mobile phone operators (Verizon, AT&T, Sprint) for providing its push email service.
Always-on Email Service
Push email service is an ‘always-on’ email service whereby new emails are pushed to BlackBerry subscriber phones the moment they are received. In comparison, many existing mobile email services operate by periodically checking for new email updates.
Push Email Service Nearly 40% of RIM’s Value
Nearly 40% of the $77 Trefis price estimate for RIM is attributable to the company’s push email service, representing nearly $17 billion in value for RIM overall.
Less than $4 for Consumers, more than $6 for Businesses
We estimate that RIM will charge mobile operators about $3.65 per month for retail (consumer) BlackBerry subscribers and about $6.86 per month from business BlackBerry subscribers in 2010 for providing its push email service. We estimate that the subscriber mix between retail and business will be 45% retail in 2010 and that this will increase to about 53% over the Trefis forecast period.
We have projected that these figures will continue to decline over the forecast period due to increasing competition from bigger companies like Microsoft that provide software to enable push email for service for mobile operators.
You can modify our forecasts for push email service revenues above to see how RIM’s stock would be impacted if service fees were decline to zero faster than we forecast.