Launch of Apple's iCloud predicted to cause 'collateral damage' on RIM
The anticipated ability of Apple's iCloud network to take some processing and traffic burdens from wireless carriers' networks has been predicted by one analyst to cause "collateral damage" for rival handset maker Research in Motion.
Shaw Wu with Sterne Agee issued to investors Friday in which he declared that iCloud will make it even tougher for companies to compete with Apple. He reiterated his belief that iCloud will "change the game" in the highly competitive mobile space.
In his view, iCloud will make iTunes even more powerful and useful for end users. That would be a huge blow to RIM, Google, Amazon and Microsoft, all of which have struggled to compete with iTunes in its current form.
But iCloud is predicted to have a particularly significant impact on RIM, which offers its own unique push network for users of BlackBerry smartphones.
"While iCloud doesn't replicate all of RIMM's push network, the ability for iCloud to offload data center processing and traffic from carriers is attractive," Wu wrote. "And it looks like AAPL will likely offer some base service for free."
Citing industry contacts who shared details on the matter, Wu said that Apple's iCloud is likely to impact both RIM's forward service revenue and gross margin. This is because carrier payments are estimated to have a high gross margin of 85 percent to 87 percent.
As a result, Sterne Agee has lowered its estimates and price target for RIMM stock. For the company's 2012 fiscal year, Wu now sees $24 billion in revenue and $6.35 in earnings per share, down from $24.1 billion revenue and $6.65 EPS. And the new price target for RIMM stock is set at $44, down from $52.
Though the iCloud name has been confirmed by Apple, the actual details of the product remain unknown. Chief Executive Steve Jobs is set to unveil the new service during his keynote that will kick off the Worldwide Developers Conference on Monday, but banners hung at San Francisco's Moscone Center have already shown the company's iOS icon for iCloud.
On Wednesday, AppleInsider exclusively reported that iCloud is expected to offer some services -- likely syncing of bookmarks, contacts and calendar events -- free to users who run Mac OS X Lion, Apple's latest Mac operating system. The iCloud service is believed to replace the current MobileMe product.
Other reports have indicated that the music streaming component of the new iCloud service could be free at first in a trial period. But eventually, Apple reportedly plans to charge customers $25 per year to be able to stream their content to any Internet-connected device, such as an iPhone or Mac.
Shaw Wu with Sterne Agee issued to investors Friday in which he declared that iCloud will make it even tougher for companies to compete with Apple. He reiterated his belief that iCloud will "change the game" in the highly competitive mobile space.
In his view, iCloud will make iTunes even more powerful and useful for end users. That would be a huge blow to RIM, Google, Amazon and Microsoft, all of which have struggled to compete with iTunes in its current form.
But iCloud is predicted to have a particularly significant impact on RIM, which offers its own unique push network for users of BlackBerry smartphones.
"While iCloud doesn't replicate all of RIMM's push network, the ability for iCloud to offload data center processing and traffic from carriers is attractive," Wu wrote. "And it looks like AAPL will likely offer some base service for free."
Citing industry contacts who shared details on the matter, Wu said that Apple's iCloud is likely to impact both RIM's forward service revenue and gross margin. This is because carrier payments are estimated to have a high gross margin of 85 percent to 87 percent.
As a result, Sterne Agee has lowered its estimates and price target for RIMM stock. For the company's 2012 fiscal year, Wu now sees $24 billion in revenue and $6.35 in earnings per share, down from $24.1 billion revenue and $6.65 EPS. And the new price target for RIMM stock is set at $44, down from $52.
Though the iCloud name has been confirmed by Apple, the actual details of the product remain unknown. Chief Executive Steve Jobs is set to unveil the new service during his keynote that will kick off the Worldwide Developers Conference on Monday, but banners hung at San Francisco's Moscone Center have already shown the company's iOS icon for iCloud.
On Wednesday, AppleInsider exclusively reported that iCloud is expected to offer some services -- likely syncing of bookmarks, contacts and calendar events -- free to users who run Mac OS X Lion, Apple's latest Mac operating system. The iCloud service is believed to replace the current MobileMe product.
Other reports have indicated that the music streaming component of the new iCloud service could be free at first in a trial period. But eventually, Apple reportedly plans to charge customers $25 per year to be able to stream their content to any Internet-connected device, such as an iPhone or Mac.
Comments
it would be totally awesome if they changed the emails back to @mac.com
You are aware, of course, that those who already had @mac.com address before the advent of MobileMe (with its @me.com) still retain the emails with @mac.com.
"While iCloud doesn't replicate all of RIMM's push network, the ability for iCloud to offload data center processing and traffic from carriers is attractive," Wu wrote. "And it looks like AAPL will likely offer some base service for free."
Is she saying anything?
Whatr traffic and data center processing is offloading iCloud from carriers?
Is she saying anything?
Whatr traffic and data center processing is offloading iCloud from carriers?
The ability to talk out of your ass
So are we listening to what Shaw Wu has to say now then?
Nope. He always comes out with some pronouncement ahead of a significant Apple event, be it a launch or earnings report. He is often wrong.
This "research note" makes no sense at all. Why is iCloud going to hurt RIMM more than the others? The only way it hurts RIMM is because it makes iOS more attractive, but that hurts all companies the same, right?
Shaw Wu is a sell-side analyst, and what people should remember is that their job is not to provide accurate forecasts or predictions, but to say anything that favours the company they work for or their clients. Don't take anything these clowns say as gospel.
Shaw Wu is a sell-side analyst, and what people should remember is that their job is not to provide accurate forecasts or predictions, but to say anything that favours the company they work for or their clients. Don't take anything these clowns say as gospel.
Good advice of course, but the prediction is presented as nothing more than mumbo-jumbo and declarations with no facts, or even assumptions, to back them up.
I'm left wondering if Wu is truly a blathering idiot even by analyst standards or if his prediction was hacked to pieces by AI when they wrote the article. Anyone have a link to the original?
[it would be totally awesome if they changed the emails back to @mac.com
You are aware, of course, that those who already had @mac.com address before the advent of MobileMe (with its @me.com) still retain the emails with @mac.com.[/QUOTE]
yes... and if i was one of those I obviously wouldn't need them to change it back....
This "research note" makes no sense at all. Why is iCloud going to hurt RIMM more than the others? The only way it hurts RIMM is because it makes iOS more attractive, but that hurts all companies the same, right?
I'm not sure that Apple is trying to hurt anyone. They are just beefing up their offerings. As a mobile me family plan subscriber, I'm happy that there will be some improvements to the service, it's long overdue IMO.
Is she saying anything?
Whatr traffic and data center processing is offloading iCloud from carriers?
I was wondering the same thing. iCloud being Apple enhancing iTunes take load of the carriers how? How is it in anyway more of a threat to RIM than to Android vendors or MS? As addicted44 said, it makes iOS more attractive to end users and so might hurt RIM, but only in the exact same way it might hurt HTC or HP or Nokia.
This "research note" makes no sense at all. Why is iCloud going to hurt RIMM more than the others? The only way it hurts RIMM is because it makes iOS more attractive, but that hurts all companies the same, right?
I think the inference is that outside of the music and iTunes stuff that's actually mentioned, that iCloud will provide syncing, push, and notification services that make RIM's (the market leader in this stuff at the moment), look old hat.
I've thought this for a while also. I don't see why everyone is focussing just on the music streaming, when the fact that we are all expecting better notifications in iOS 5 is probably far more relevant to the cloud stuff.
IMO, better notifications on the devices, better, more integrated push (in multiple and probably some new) iOS services and the presence of the iCloud all add up to a superior "always on" kind of experience for iOS devices. This seems far more important/relevant than simple music streaming to me.
"While iCloud doesn't replicate all of RIMM's push network, the ability for iCloud to offload data center processing and traffic from carriers is attractive," Wu wrote.
How does that work?
I think the inference is that outside of the music and iTunes stuff that's actually mentioned, that iCloud will provide syncing, push, and notification services that make RIM's (the market leader in this stuff at the moment), look old hat.
I've thought this for a while also. I don't see why everyone is focussing just on the music streaming, when the fact that we are all expecting better notifications in iOS 5 is probably far more relevant to the cloud stuff.
IMO, better notifications on the devices, better, more integrated push (in multiple and probably some new) iOS services and the presence of the iCloud all add up to a superior "always on" kind of experience for iOS devices. This seems far more important/relevant than simple music streaming to me.
Good points. But, I think we are all hoping for improved notifications and syncing, with or without iCloud. Music and media has been the focus of most iCloud discussions, because that seems to be the focus of most of the 'leaks'. If it also brings improved and more convenient syncing, great. I am not sure I see how iCloud will improve notifications in any major way. APN needs to be improved in fundamental ways in the OS first and most importantly.
How does that work?
I'll be the first to admit that my knowledge of networks and providers is scant...but I'm confused as well. If we're moving through a carrier like ATT for data, what, exactly, is being offloaded? Someone more knowledgeable, please throw me a bone.
I'll be the first to admit that my knowledge of networks and providers is scant...but I'm confused as well. If we're moving through a carrier like ATT for data, what, exactly, is being offloaded? Someone more knowledgeable, please throw me a bone.
Well obviously the data won't need the carriers anymore because it's being delivered through the iCloud. Wait - it's the carriers who should be quaking in their boots.