Research in Motion (RIM), makes money by selling BlackBerry smartphone handsets. In addition, the company also makes money through service fees charged to mobile phone operators (e.g. Verizon, AT&T, Sprint) for providing its push email service. RIM’s market closing price on Friday was $66.63, a little higher than Trefis stock price estimate for RIM of $65.83. About 33% of this Trefis stock price estimate for RIM is attributable to its push 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.
We estimate that RIM will make on average of about $3.80 per month from retail BlackBerry subscribers and about $7.20 per month from business BlackBerry subscribers in 2009 for providing its push email service. They are about 10% lower than 2007 numbers. Although these fees are paid by mobile phone operators to RIM, the costs trickle down to BlackBerry subscribers through the pricing of data plans. We have projected that these figures will continue to decline over the forecast period due to increasing competition from bigger companies like Microsoft, in addition to a number of smaller players.
Within RIM’s content on our platform, you can explore whether RIM might be able to sustain the current levels of Service Revenue per Retail Subscriber and Service Revenue per Business Subscriber, and if so, change the forecasts to see how that might impact RIM’s stock price.
