Research in Motion (NASDAQ:RIMM), maker of the BlackBerry smartphone, released a free version of its BlackBerry Enterprise Server (BES) software, BES Express, at the Mobile World Congress 2010 held in Spain.
BES Express is targeted at small-to-medium size businesses (SMBs) that would like RIM’s wireless BlackBerry mail and calendar syncing services, as well as its basic security safeguards, but cannot afford RIM’s full BES software.
Although the free BES Express may reduce RIM’s software revenues initially, we believe that it will help RIM to sell more BlackBerry smartphones to small businesses over the long-run and position RIM more competitively against Apple’s (NASDAQ:AAPL) iPhone.
Accessory and Software 7% of RIM’s stock
RIM offers BlackBerry Enterprise Server (BES) software to businesses as well as retail customers. The software can be installed on corporate servers for businesses and on personal computers for retail customers. RIM charges fees for BES software and for each BlackBerry subscriber using the BES.
In addition, the company charges fees for maintenance, upgrades, and technical support. RIM’s software division also includes a platform for developing and distributing mobile phone software applications. We estimate Accessory and Software to form 7% of the $77 Trefis price estimate for RIM’s stock.
BES Express is ideal for consumers, small & medium businesses
BES Express software is designed for consumers and small-to-medium size organizations that need only few basic services and don’t require the highest level of security. The software offers the following features:
- Wireless synchronization of email, calendar, contacts, notes and tasks
- Manage email folders and search email on the mail server remotely
- Book meetings and appointments, check availability and forward calendar attachments
- Set an out-of-office reply
- Edit Microsoft Word, Excel and PowerPoint files using Documents To Go
- Access files stored on the company network
- Use mobile applications to access business systems behind the firewall
BES Express Will Reduce RIM’s Software Revenues
Since BES Express is free, we believe that RIM’s software revenues from new subscribers will decline. We expect RIM’s Software Revenue per New Subscriber to decrease from the $34 in 2010 to $24 by the end of Trefis forecast period.
BES Express Will Help Sell More BlackBerry Smartphones
BES Express will help increase BlackBerry penetration of small and medium size businesses, which should result in more sales of BlackBerry units. We forecast BlackBerry Market Share to increase from around 3% of the global mobile phone market in 2010 to 8% by the end of Trefis forecast period.
You can modify our forecasts above to see how RIM’s stock would be impacted if the Software Revenue per New Subscriber declines more than we anticipate or BlackBerry mobile phone market share increases more than we forecast.
For additional analysis and forecasts, here is our complete model for RIM’s stock.
