by Carlo Longino

RIM Gets Questioned On Wall Street

While the Blackberry remains at the top of the push email market for the time being, Research In Motion is coming under ever-increasing competition from a wide assortment of other vendors as mobile email becomes a commodity offering. RIM's latest growth strategy was the release of the Blackberry Pearl, a device with multimedia features and a camera that was intended to open up the consumer market. Now, a Wall Street analyst says that indeed, the Pearl is selling well -- but it's cannibalizing sales of other Blackberry devices. Rather than growing overall sales, market share and user base, he says 60 to 70% of Pearls are being sold to existing Blackberry users. This is a bit of a problem for RIM, or at least its stock price. It enjoys a higher multiple than other mobile handset makers because it gets a monthly subscription fee from every Blackberry user; selling lots of replacement handsets doesn't grow that base. This isn't a new trend, either, suggesting that RIM's premium over traditional handset vendors may not be fully justified if it can't maintain subscriber growth.

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