Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Apple Inc. (AAPL), Research In Motion Ltd (BBRY): Department of Defense Replaces BlackBerry With iOS?

Electronista, which provides updated news related to tech, mobile phones, GPS etc, is reporting that the United States Department of Defense (DOD) is ordering 650,000 iOS devices. Reports show the breakdown as 120,000 iPads, 100,000 iPad minis, 200,000 iPod touches, and the remaining 210,000 filled by various iPhones. It should be mentioned that Electronista also reports that the actual order of these devices is being delayed because of the sequester but will be completed when Congress resolves the remaining issues.

Research In Motion Ltd (BBRY)It appears that Research In Motion Ltd (NASDAQ:BBRY)‘s new BB10 device has caused the DOD to change direction and go with Apple Inc. (NASDAQ:AAPL)‘s devices instead. Electronista reports:

Another source familiar with the situation told us that the iOS devices were intended to replace nearly all the older BlackBerry devices incompatible with the new BlackBerry 10 software release. Statistics gathered from devices deployed by the DoD show 470,000 BlackBerry devices in daily use, none of which use the new BlackBerry 10 operating system. Testing of the new operating system has been gravely impacted by the sequester, and the outright elimination of funds earmarked for the BlackBerry 10 platform may never be restored.

So, what exactly will these 650,000 iOS devices be used for? They are expected to be used in many situations, with over 50% of them “headed to the battlefield, afloat, and to associated support commands.” The remaining units will be used in office settings in such places as the Pentagon. This may seem like a lot of devices, but if the average device cost $800 (and it shouldn’t be that much), its only $520 million. Not to belittle half a billion dollars, but considering Apple’s revenues in the TTM are around $165 billion, the actual purchase probably won’t affect Apple Inc. (NASDAQ:AAPL) much.

Research In Motion Ltd (NASDAQ:BBRY) may feel the effects of this more than Apple. This is just speculation on my part entirely, but let’s say the DOD had planned on buying an additional 180,000 Research In Motion Ltd (NASDAQ:BBRY) devices (to match the 650,000 that they are buying from Apple) in 2013. If the average device was $400 (half of what we discussed for Apple), the total would be $72 million. The estimated $520 million Apple may generate from this deal is only .32% of their TTM of revenue. If the DOD had bought those additional 180,000 from BlackBerry, it would have generated .57% of their TTM of revenues.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.