Research in Motion: Strange Brew…
If Research In Motion’s annual BlackBerry World developers conference was to be the company’s attempt at a comeback, well, better luck next year. The company’s pre-announcement of a May quarter miss coupled with its exuberant guidance–some would say irrationally exuberant–for full-year profits of $7.50 per share had many observers and analysts expecting a slick new smartphone lineup and some decent insight into the evolution of its much-anticipated QNX “superphones.”
Instead, they were given the unveiling of the BlackBerry Bold 9900 and 9930, largely incremental upgrades to RIM’s dusty handset lineup, an update to the PlayBook OS that added features that really should have shipped with the device when it launched a few weeks ago, and QNX transition guidance that was at best hazy.
That was hardly what financial analysts were looking for.
“There were no clear indications of when QNX would finally arrive, and we believe the new moniker signals a longer-than-expected commitment to OS 7 before transitioning to a QNX-based platform,” said Jeffries analyst Peter Misek.
Over at UBS, Phillip Huang said he saw little to ease concerns about the company’s ability to regain the traction it’s lost in the smartphone market.
“Nothing we saw…gives us incremental conviction that anything changes fundamentally in the balance of power against Android and iOS,” Huang said. “In general, we believe, RIM’s fundamental challenge over the next few quarters will be executing flawlessly on the hardware, platform, and ecosystem shifts occurring.”
A daunting challenge, considering RIM’s execution has been so lacking recently. Apologizing for being late to the tablet market and acknowledging that the strategy that finally brought the company there could be improved doesn’t exactly bolster confidence in RIM’s ability to execute at all, let alone flawlessly.
At this point RIM management has very little credibility left. If it misses that $7.50 per-share full-year profit forecast–or is forced to step back from it before it does–it will have none at all.