TORONTO (Dow Jones)--Shares of Research In Motion Ltd. (RIMM:$50.41,00$3.02,006.37%) are up 6.4%, on news that Vodafone Group PLC (VOD:$19.23,00$-0.51,00-2.58%) will give the BlackBerry Storm away with an 18-month contract. Equally important for BlackBerry maker Research In Motion Ltd. (RIMM:$50.41,00$3.02,006.37%) is that Vodafone (VOD:$19.23,00$-0.51,00-2.58%) aims to have the device in subscriber hands by Nov. 11. That's significant because it means the Storm will be available for the holiday- shopping season, and nearly three weeks before the Nov. 29 end of RIM's third quarter. Investors had feared that the Storm, RIM's first touch-screen version of the BlackBerry, wouldn't be available before the end of the third quarter, heightening the risk of an earnings shortfall. In a note earlier this week, Genuity Capital'sDeepak Chopra said he believes RIM needs to add 1.4 million subscribers in November to meet guidance for 2.9 million subscriber additions in the quarter. He said he believes strong Storm sales will be critical for RIM to achieve that number. The Storm will be sold in the U.S. by Verizon Wireless (VRZ.XX). Verizon (VZ:$30.7615,$0.2615,0.86%) , a joint venture between Verizon Communications Inc. (VZ:$30.7615,$0.2615,0.86%) and Vodafone (VOD:$19.23,00$-0.51,00-2.58%) , hasn't said when the device will go on sale or offered pricing details. A Verizon (VZ:$30.7615,$0.2615,0.86%) spokeswoman declined to comment for this story. RIM, Waterloo, Ont., dominates the corporate-smartphone market, but has also taken share in the consumer market by introducing several consumer-friendly devices, such as the BlackBerry Storm, Curve and Pearl. However, the stock is off about 55% year to date, as the slowing economy has raised fears that consumers and corporations will cut spending. RIM's stock has also been hurt by product delays, concerns about competition from Apple Inc.'s (AAPL:$108.357,0$-2.683,0-2.42%) iPhone and the company's decision to sacrifice margins for market share. In September, RIM said it expects gross margins to be in the mid-40% range for the foreseeable future, as it spends heavily on marketing and new devices to take share in the burgeoning smartphone market. Margins had historically been in the 50-51% range. Vodafone's (VOD:$19.23,00$-0.51,00-2.58%) Storm giveaway is consistent with RIM's strategy, though it isn't clear if RIM is providing the carrier with added incentives. Vodafone (VOD:$19.23,00$-0.51,00-2.58%) subscribers can obtain a free Storm by agreeing to an 18-month contract with monthly service fees starting at GBP40 a month. A Vodafone U.K. rival, 02, offers a free 16-gigabyte version of the iPhone with an 18-month contract starting at GBP75 a month. The 8-gigabyte iPhone model is free with an 18-month contract and a monthly fee starting at GBP45. Earlier this month, Rogers Communications Inc. (RCI:$28.99,00$0.12,000.42%) , the big Canadian carrier, cut its price on the BlackBerry Bold to C$299 from C$399. On Friday, Boy Genius Report, a well-regarded blog that monitors the consumer-electronics industry, reported that Best Buy (BBY:$26.51,00$1.90,007.72%) is selling the Bold in Canada for just C$ 199.99. This was confirmed on the Best Buy Canada Web site. AT&T Inc. (T:$27.73,00$0.63,002.32%) is scheduled to start selling the Bold in the U.S. for US$299.99 with a two-year contract. On Nasdaq Friday, RIM is up $3.02 to $50.41 on 7.2 million shares.
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TORONTO (Dow Jones)--Shares of Research In Motion Ltd. (RIMM:$50.41,00$3.02,006.37%) are up 6.4%, on news that Vodafone Group PLC (VOD:$19.23,00$-0.51,00-2.58%) will give the BlackBerry Storm away with an 18-month contract.
Equally important for BlackBerry maker Research In Motion Ltd. (RIMM:$50.41,00$3.02,006.37%) is that Vodafone (VOD:$19.23,00$-0.51,00-2.58%) aims to have the device in subscriber hands by Nov. 11. That's significant because it means the Storm will be available for the holiday- shopping season, and nearly three weeks before the Nov. 29 end of RIM's third quarter.
Investors had feared that the Storm, RIM's first touch-screen version of the BlackBerry, wouldn't be available before the end of the third quarter, heightening the risk of an earnings shortfall.
In a note earlier this week, Genuity Capital'sDeepak Chopra said he believes RIM needs to add 1.4 million subscribers in November to meet guidance for 2.9 million subscriber additions in the quarter. He said he believes strong Storm sales will be critical for RIM to achieve that number.
The Storm will be sold in the U.S. by Verizon Wireless (VRZ.XX). Verizon (VZ:$30.7615,$0.2615,0.86%) , a joint venture between Verizon Communications Inc. (VZ:$30.7615,$0.2615,0.86%) and Vodafone (VOD:$19.23,00$-0.51,00-2.58%) , hasn't said when the device will go on sale or offered pricing details. A Verizon (VZ:$30.7615,$0.2615,0.86%) spokeswoman declined to comment for this story.
RIM, Waterloo, Ont., dominates the corporate-smartphone market, but has also taken share in the consumer market by introducing several consumer-friendly devices, such as the BlackBerry Storm, Curve and Pearl. However, the stock is off about 55% year to date, as the slowing economy has raised fears that consumers and corporations will cut spending.
RIM's stock has also been hurt by product delays, concerns about competition from Apple Inc.'s (AAPL:$108.357,0$-2.683,0-2.42%) iPhone and the company's decision to sacrifice margins for market share. In September, RIM said it expects gross margins to be in the mid-40% range for the foreseeable future, as it spends heavily on marketing and new devices to take share in the burgeoning smartphone market. Margins had historically been in the 50-51% range.
Vodafone's (VOD:$19.23,00$-0.51,00-2.58%) Storm giveaway is consistent with RIM's strategy, though it isn't clear if RIM is providing the carrier with added incentives. Vodafone (VOD:$19.23,00$-0.51,00-2.58%) subscribers can obtain a free Storm by agreeing to an 18-month contract with monthly service fees starting at GBP40 a month.
A Vodafone U.K. rival, 02, offers a free 16-gigabyte version of the iPhone with an 18-month contract starting at GBP75 a month. The 8-gigabyte iPhone model is free with an 18-month contract and a monthly fee starting at GBP45.
Earlier this month, Rogers Communications Inc. (RCI:$28.99,00$0.12,000.42%) , the big Canadian carrier, cut its price on the BlackBerry Bold to C$299 from C$399. On Friday, Boy Genius Report, a well-regarded blog that monitors the consumer-electronics industry, reported that Best Buy (BBY:$26.51,00$1.90,007.72%) is selling the Bold in Canada for just C$ 199.99. This was confirmed on the Best Buy Canada Web site.
AT&T Inc. (T:$27.73,00$0.63,002.32%) is scheduled to start selling the Bold in the U.S. for US$299.99 with a two-year contract.
On Nasdaq Friday, RIM is up $3.02 to $50.41 on 7.2 million shares.