Despite struggles that have hurt its bottom line and hammered its stock price, Research in Motion is upbeat on the outlook for its BlackBerry PlayBook tablet computer the first device to feature the companys QNX-based operating system that a co-chief executive said will form the core of its future BlackBerry smartphones.
The Waterloo, Ontario, Canada-based company shipped roughly 500,000 tablets in its first fiscal quarter of 2012 and has launched the tablet in 11 markets around the world over the last several days, including in the United Kingdom. RIM plans to launch the device in five more markets in the coming weeks, RIM Co-CEO Jim Balsillie said Thursday during a conference call with financial analysts.
While the PlayBook launch did not go as smoothly as we had planned, the potential of the product and powerful underlying OS was recognized and acknowledged by partners, channels, reviewers and end users,” he said.
RIM has introduced updates to the product to deliver such features as video chat and a native Facebook application, Balsillie said, and the BlackBerry manufacturer plans to introduce additional apps such as email, Android media player and corporate virtual private network (VPN) capabilities. However, the company has reportedly delayed the arrival of its PlayBook for fourth-generation networks RIM doesnt anticipate introducing the 4G devices (for WiMAX, LTE and HSPA+ networks) until the fall, according to media reports.
PlayBook is now in the hands of over 1,500 enterprise customers in progressive stages leading to full deployment,” said Balsillie, who added that the company is working with such global enterprise solutions providers as Cisco, IBM and HP to help further drive sales.
We are working with Verizon to target enterprise accounts with PlayBook and RIM has hosted a number of CIO events to highlight PlayBook throughout the U.S. this quarter,” Balsillie added.
Sprint also begin offering the device through retail channels, and communications companies in Canada namely Bell Canada, Rogers Communications and Telus have enjoyed success selling the PlayBook through targeted promotions and by bundling packages with BlackBerry smartphones, he said.
Said a RIM executive either Balsillie or co-CEO Mike Lazaridis on the conference call: We feel it [PlayBook] is absolutely a platform that we can run really for a decade plus for corporate transformation and also for high-performance personal communications and media and socializing and mobile computing.”
But the PlayBook alone cannot save a company that is getting smoked in the smartphone wars by rivals Apple and Google, which supplies the popular Android platform for many popular devices. RIMs earnings on Thursday disappointed analysts, employees and investors as the company revealed plans to cut jobs and noted that a slowdown in its business is seeping into the second fiscal quarter, thanks at least in part to delays of new products.
The delay of RIMs BlackBerry OS 7.0 products meant that RIM was not able to secure placement with carriers for the key back to school season, which is causing accelerating share loss and ASP declines as RIM is forced to compete with aging 1+ year-old products in a rapidly moving market,” Goldman Sachs analysts wrote in a research note.
The Wall Street giant anticipates that RIMs smartphone market share declined to 14 percent in the first fiscal quarter, down from 19 percent a year ago, and will further dip to 10 percent in the second fiscal quarter.
RIM co-CEO Lazaridis said products are in dozens of certification programs with carriers in the United States and around the world, and the company anticipates a rapid succession of product launches over the next several months.
Jeffries & Co., a securities and investment banking group, is among the skeptics. Its equity analyst have retained an underperform” rating on the stock and lowered their target to $24 from $35.
We believe new OS 7 devices are unlikely to receive much carrier or consumer support, QNX phones will be delayed, pricing pressure will increase, and RIMs subs are at risk ,” Jeffries analysts wrote in a research note.
Deutsche Bank reiterated its sell” rating on the stock and lowered its price target to $20.
RIMs product line has looked increasingly dated over the past year as newer smartphones have come to market,” DB analyst Brian Modoff wrote in a research note. Moreover, it is difficult to see their prospects brightening any time soon. Their new platform, QNX, will not be available on their superphone lineup until CY12. Even then, we think they will find it difficult to compete.”
RIM co-chiefs Lazaridis and Basillier failed to address the companys challenges during the conference call with analysts, according to Modoff.
The company is facing its greatest challenge, maybe in its history, and each CEO continues to believe there is unprecedented interest in their products,” the analyst said. For the company to move forward in a constructive manner, each will need to face these issues with a much more straightforward approach.”
RIMs earnings announcement has further sent the price of its stock to a record 52-week low ($27.75 when the markets closed Friday), but some analysts may have been bracing for the worst ahead of the news.
Last nights disappointing report from the company,” Zachs.com senior stock strategist Kevin Cook wrote, was not a surprise to those who were paying attention.”