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RIM Hopes Storm Clouds Are Clearing

Stocks in this article: RIMM

The BlackBerry Storm has been a bit of a publicity disaster for Verizon (VZ) and Research in Motion (RIMM), but a recent software fix may provide some salvation.

When the Storm hit shelves at Verizon stores last month, it came loaded with a treasure trove of software snags, which quickly sent critics overboard . The glitches marred the hotly anticipated debut of RIM's first touch-screen phone and slightly tarnished Verizon's reliability reputation, not to mention its best effort yet to answer AT&T's (T) wildly popular Apple (AAPL) iPhone.

Pay a visit to any Verizon store and you'll get a first-hand feel for some of the consumer dissatisfaction levels engendered by the turbulent Storm. The worst may have passed though. A recent software upgrade from RIM seems to have solved many of the problems -- like delayed screen-orientation shifts from portrait to landscape and seven-minute Web-page loading.

Still, return rates for the Storm have become a matter of debate and an issue of concern for investors. Some of the angrier Web sites have claimed nearly half are being returned, but one market research analyst says that's "too high."

A Verizon representative says "no company would continue to sell a product with return rates like that." The rep added that the return rates are in fact typical for new devices.

The bigger question perhaps is whether Storm sales will have an impact on RIM's current fiscal fourth-quarter numbers.

RIM reports fiscal third-quarter earnings after the market closes later today, and with its quarter ended last month, the Storm isn't likely to be a factor in the performance. RIM has already lowered its guidance. Analysts are expecting the company to post a profit of 83 cents a share, excluding special items. And sales for RIM's third quarter are expected to be $2.82 billion, according to Thomson Reuters.

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