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    RIM Warns on BlackBerry Sales, but Still Up About PlayBook

    Written by

    Michelle Maisto
    Published April 29, 2011
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      Research In Motion is dialing back its earnings forecast for its fiscal 2012 first quarter, due to lower-than-expected BlackBerry smartphone sales.

      RIM, whose quarter will end May 28, is losing its footing in a smartphone market dominated by the Apple iPhone and Android-running devices. The company announced April 28 that its BlackBerry smartphone shipments during the quarter will likely be toward the lower end of the 13.5 million to 14.5 million unit guidance that it forecast in March, and that its mix of selling devices will likely shift toward those with lower selling prices.

      However, shipments of its long-awaited BlackBerry PlayBook tablet are in line with its previous expectations, RIM said. And while it cautioned during its last earnings announcement that the March disasters in Japan might impact on supplies, RIM added that it has not experienced any significant disruptions.

      “RIM expects to achieve full year fully diluted earnings per share of approximately $7.50, which reflects anticipated strong revenue growth in the third and fourth quarters of the fiscal year driven primarily by the launches of new BlackBerry smartphone products and prudent cost management,” it said in a statement.In an April 29 research note, analysts at financial services firm Jefferies & Co. cautioned that RIM “will see continued execution issues, product delays and lackluster product launches for the next year.”RIM plans to eventually extend the PlayBook’s QNX platform to its BlackBerry smartphones, though not before rolling out the next version of its BlackBerry OS-now BlackBerry OS 7, instead of 6.1. The report added that both OS 7 and QNX are facing delays and carriers are withdrawing support, partly due to a “ripple effect” from the PlayBook’s April 19 release.”Our checks indicate the issues have led to a fire drill and resources being pulled off of other projects,” states the multiple-author report. “We think this will cause BB OS 7.0 phones to be delayed and that QNX handsets will be pushed back until [the second half of 2012].”Ticonderoga Securities analyst Brian White similarly warned that RIM may have more bad news to come.”We believe that any company that pre-announces a quarter within 4-5 weeks of giving guidance is experiencing a major shift in its markets that could possibly result in another guide down before earnings are officially announced,” he wrote in an April 29 research note.RIM’s stumbles, White added, create a “big opportunity” for Apple to continue increasing its market share.”While [RIM] continues to harbor high expectations for the second-half of FY12 as the new PlayBook begins to ramp and new smartphones are released, we believe the tide is clearly turning,” wrote White. “During the fall of 2010, Apple surpassed [RIM] in market share and we expect this momentum to continue.”Apple sold 18.65 million iPhones during the March quarter, he added, which was up 38 percent from the 13.5 million units that RIM now expects to ship in the May quarter.Marveling at the brisk pace at which Apple has managed to grow its smartphone empire, White noted that Motorola announced better-than-expected results April 28, of shipments of 9.3 million mobile devices and 4.1 million smartphones.”It is hard to believe but Apple’s iPhone shipments were only slightly higher than Motorola’s phone sales a year ago – i.e., 8.75 million vs. 8.5 million.” Now, he added, “the Apple is double the size.”Jefferies analysts concluded that poor RIM appears to be surrounded by the competition. On the high end, they anticipate QNX having to face off with a range of 4G LTE (long-term evolution) devices. In the mid range, they expect Apple to launch a $300 iPhone in the next 6 to 12 months. And on the low end, they added, “We believe Huawei and ZTE are approaching carriers with $100 Android smartphones.”
      Michelle Maisto
      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University.

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