Research In Motion has high hopes for its BlackBerry PlayBook, though heavy investments in the tablet caused the mobile device maker to lower its guidance for its first fiscal quarter, which sent its stock tumbling in late trading.
smartphone maker Research In Motion has high hopes for the BlackBerry PlayBook,
its answer to the Apple iPad that will begin
shipping April 19
has invested enormous resources in the tablet-from promotional dollars to the
April 2010 purchase of QNX, the operating system platform the PlayBook runs on.
RIM is betting big that the device will fortify its future as it risks
continuing to lose market share to not only Apple but Android mobile
investing in opening up a new category, bringing in a new platform. This is no
time for half measures," RIM co-CEO Jim
Balsillie told analysts on a conference call announcing the company's fiscal
2011 fourth-quarter earnings. "This is a time of enormous investment and
RIM isn't offering sales guidance on the tablet, its expectations were hinted
at, as analysts peppered the executives with questions.
said, like, 20,000 retail outlets," Adele Ebbs, RIM vice president of
investor relations, said at one point during the call, indicating the Best Buy,
Office Depot, Radio Shack and Staples stores that will sell the PlayBook, in
addition to the number of carriers that will support it. "They're not
going to have like one or two devices. So I think you can kind of see it's not
going to be in the tens of thousands."
jumped in and added, "Let me put it this way. Many of our corporate
clients have approached us about each wanting tens of thousands of PlayBooks. ...
They're looking at tablets, and they like the PlayBook
went on to say that RIM has "some good expected numbers," and that
it's anxious to get the device out, but the company didn't want to rush things
and risk shipping an unstable or glitchy device.
believe [it will be] stable by April 19," he went on. "It's got a
great over-the-air utility for upgrading; it's got so many things that
future-proof it. ... It's a winner, it's such a winner."
during RIM's fiscal 2011 fourth quarter was $5.6 billion, up 1 percent from the
previous quarter and 36 percent from a year ago. Net income was $934 million
for the quarter, compared with $911 million the quarter before and $710 million
a year ago. For the fiscal year that ended Feb. 26, RIM saw net income of $3.4
billion, up 47 percent over fiscal year 2010-on revenue of $19.9 billion,
which was up 33 percent from a year earlier.
also shipped a record number of devices during the quarter-14.9 million-for a
fiscal 2011 total of 52.3 million. Handsets accounted for 81 percent of RIM's
revenue during the quarter, with 16 percent going to services and 3 percent to
guidance for the first quarter of fiscal 2012, however, sent its stock falling
in late trading. While Wall Street expected an average of $5.65 billion,
according to Bloomberg
, RIM announced
expected revenue between $5.2 billion and $5.6 billion. In part, this was
attributable, again, to the efforts it's putting into the PlayBook.
per share for the first quarter are expected to be in the range of $1.47-$1.55
per share diluted," RIM said in a March 24 statement. "This guidance
reflects a mix shift in handset towards lower ASP products in the first quarter
and an increased level of investment in Research & Development and Sales
and Marketing related to our tablet and platform initiatives."
added that guidance range was also "slightly wider than normal" due
to the risk of potential disruption
in its supply chain
due to the recent catastrophic earthquake and tsunami
in Japan, where a number of components suppliers are located.