There's nothing like a looming Death Star to make Research in Motion (RIMM) look like a speck of data dust in the mobile universe.
announced an expanded partnership to provide an outlet for the wireless instant-messaging and email demands of 29 million AOL subscribers. The deal expands a July 2000 agreement that gave AT&T Digital PocketNet Service customers mobile access to AOL email. The new program adds instant messaging, marketing campaigns and a co-branded handset in the first half of 2002.
Research in Motion fans waiting for the Canadian little guy to shift its AOL Mobile Messenger deal into hyperdrive got a serious look at the massive competitors out there should RIM rebel and fight for the consumer.
U.S. Bancorp Piper Jaffray
analyst Bill Crawford warned investors not to make too much of RIM's work with AOL: "Investors should not buy the stock if they are counting on consumer market revenues from AOL," he says. "RIM is best-positioned in, and you can count on, the enterprise market." Crawford and his firm have done banking for RIM recently.
RIM booked a one-time jump in revenue from AOL in its fourth quarter ended Feb. 28, but in its June
21 first-quarter earnings report the company straightforwardly asserted it had no reorders from AOL and was not penciling in any revenue from AOL in its projections. Forget the if-onlys, RIM is not dedicating its workforce to capturing AOL's audience.
Do or do not, there is no try.
Additionally, AT&T Wireless isn't the only giant-sized competition for warm AOL bodies in the data realm. AOL has partnerships with RIM, AT&T Wireless,
to provide mobile data for AOL members. Safe to say the online service will pursue all lucrative options to get users online even more.
On a positive note,
analyst Virginia Genereux adds that RIM has a head start over AT&T Wireless because "such a device is a ways off" and "AT&T Wireless has to upgrade their networks to GPRS
general packet radio service, which is a year-end 2001 phenomenon realistically." Merrill Lynch has done recent underwriting for RIM.
RIM has an enterprise-customer-geared data service in beta testing in the U.K. with
, which is planned for commercial rollout before the end of 2001, allowing users to receive data over BT Cellnet's network. Crawford says that the AOL-AT&T announcement could eventually prove good for RIM. It means that AT&T is solidifying its plans for GPRS services. RIM has been waiting for an opportunity to offer its data service over GPRS to customers of U.S. wireless carriers.
More AOL orders for RIM would be tremendous. But ultimately the enterprise is RIM's calling.