Analyst says that Apple's iCloud could seriously damage RIM
The new service, expected to be introduced Monday, will make iTunes more powerful according to Wu, who says that it can hurt Google, Amazon, Microsoft and RIM. While all of the aforementioned companies have tried to compete with iTunes,Wu sees iCloud making life especially difficult for RIM. Why? Because RIM offers its own "push" network for users of BlackBerry phones. While iCloud won't offer all of the same services that BlackBerry does, it will relieve some of the traffic congestion that carriers face by offloading data processing and as we reported the other day, the service will begin life free to users.
After speaking to industry contacts, Wu told clients that iCloud could impact RIM's forward service revenue and gross margin. Currently, carrier payments offer RIM gross margins as high as 87%. With that kind of profitability in danger, Wu has cut his revenue estimates for the Canadian based company to $24 billion (US) for the 2012 fiscal year, a drop of $100 million from his previous figure. Even more damaging, Wu now expects the BlackBerry maker to produce earnings of $6.35 a share, down from the $6.65 originally estimated. With this in mind, the analyst has cut his target on RIM's stock to $44 from $52. Friday morning, the stock was trading at $39.83.
Monday, Apple CEO Steve Jobs is expected to introduce the iCloud service during his keynote speech at the WWDC in San Francisco. A banner showing the iOS icon for iCloud is already hanging at the Moscone center where the WWDC will be held.