Over the past few days, analysts have released a barrage of nasty reports on RIM that are unbridled in their pessimism over the company’s business. One described the situation at RIM as “Grim and Getting Grimmer.” Another called it “one of the worst positioned companies in the tech sector.”

At this point, expectations for RIM’s quarterly earnings are so low that simply hitting the bottom range of its own lousy BlackBerry shipment and earnings-per-share forecasts would inspire a sigh of relief among shareholders. Analysts currently expect RIM to post earnings of 83 cents a share on revenue of $4.56 billion for the period. That’s less than half what it earned a year earlier — $1.78 per share on revenue of $5.6 billion.

Should the company hit those numbers, it may win itself a respite from the beating it has been taking on Wall Street lately. But if it doesn’t, it will only lend more credence to dire predictions about RIM’s future, which are already bordering on apocalyptic. Predictions like this one, from Wedge Partners analyst Brian Blair:

“Our view is that the next four quarters show a steep decline in quarterly units and a gradual decline in overall subscribers, which at around 73 million, is the last of the growing, positive metrics for RIM,” Blair said in a note to clients this week. “We continue to see a mass exodus away from the BlackBerry platform in the consumer segment, in the enterprise, and in government, and there is nothing that will stave off this decline in 2012.”

A brutal assessment, but one that Blair says is supported by the following trends:

• Some longtime enterprise and government customers are withdrawing support for BlackBerry, while others are beginning to test iPhone deployments.
• Carriers are beginning to back off the BlackBerry platform in North America and Europe, in favor of Android devices and the iPhone.
• The iPhone is now outselling the BlackBerry in RIM’s home market of Canada.

And then there’s the broader industry picture, which is truly disheartening.

Said Blair, “This is a company that has been lapped in the mobile environment in nearly every way and the most damning news came on the company’s last call: the announcement that there would be no new hardware until late in 2012. All that time means more laps around the company, as neither Android, iOS or Windows Phone are standing still this year. RIM is going to spend a year trying to catch up to what these players have done.”

Unless, of course, RIM’s first BlackBerry 10 smartphones surpass what those players have done. Impossible? Perhaps. But who knows? We’ve seen mobile industry upended once before.

Those aren’t the only players, though. Samsung and Huawei make some of their own chips, while Intel is also going after this market. Quietly making inroads as well is Broadcom.

The Orange County, Calif., chipmaker has long made Bluetooth, Wi-Fi and other communications chips for phones. In recent months, though, it has been able to capture a sizeable chunk of the main processor market, thanks to its chip, which combines an application processor with another key component, the communications baseband.

“Smartphones have become a significant business for Broadcom,” Broadcom CEO Scott McGregor told AllThingsD in an interview last week.

McGregor declined to get specific, but a recent J.P. Morgan report estimated that Broadcom’s baseband and application processor is now in roughly a third of Samsung’s smartphones, which it says represents three to four times what the company was doing as recently as the second half of this year.

Among the models using Broadcom’s chips are the Galaxy Y, Galaxy Mini and Galaxy Ace, J.P. Morgan said, projecting sales of about 12 million to 13 million phones per quarter, which it says could translate into $500 million in annual revenue.

Broadcom, it notes, also has about 70 percent share with most of the major smartphone and tablet makers for the chips needed to do Wi-Fi, Bluetooth and GPS. The new iPad, for example, uses Broadcom’s chips, according to an IHS iSuppli teardown of the tablet.

“Over the next few years, Broadcom should emerge as one of the top players in the mobile/cellular semiconductor market,” J.P. Morgan’s analysts said in their report.

Wedge Partners analyst Brian Blair said he left last month’s Mobile World Congress in Barcelona even more positive than he had been on Broadcom’s prospects.

“We have said that we believe that the biggest trend of the decade is the low-end smartphone,” Blair said in a research note. “One of the most surprising elements of this trend is how good the entry level models have become, and one of the reasons for this is Broadcom.”

Blair said that even phones that sell for $150 unsubsidized are now capable of doing what a high-end smartphone did just two years ago. The phones powered typically have a 1GHz processor and baseband and other communications and power management chips, all of which can add up to devices with $20 to $22 worth of Broadcom silicon, assuming it has all of its chips inside.

Historically, the chipmaker has mainly gone after the midrange of the market, but McGregor promised that the company will move into higher-end devices this year, as well as a bit down-market.

“We’ll cover the whole waterfront,” McGregor said. He acknowledged that the company had some catching up to do in application processors and high-end modems, such as those used in 4G phones.

Android has grown considerably, he said, though he still sees some room for other operating systems, particularly now the Microsoft has managed to get several phone makers to pay a royalty on every Android device they sell.

“One of the challenges of Android is that Microsoft is now hitting up all of the handset makers and claiming a corkage free on that dinner,” McGregor said. “I think that’s an interesting challenge for the handset industry.”

But, it appears that well has dried up, at least for a significant number of investors and analysts. The stock is off more than 10 percent on Friday and even those analysts who have been bullish on the company’s prospects are starting to sour.

A number of firms cut their ratings or price targets following the company’s dismal earnings report and an even more faith-sapping conference call.

Wedge Partners analyst Brian Blair summed things up pretty well in a research note titled “Bad to Worse.”

“The core problem for RIM in the quarter is that only one of their new products sold well,” he wrote, also bemoaning the company’s continued investment in the money-burning PlayBook before pulling his hair out over the fact that the first phones using the company’s next-generation operating system are delayed until the end of next year. And Blair had actually been briefly bullish on the company’s prospects earlier this year.

“After holding a negative opinion of RIM for the bulk of this year, we had a positive view about the hopes of this product cycle and anticipated it would lift metrics for two quarters, but we were wrong as it didn’t even last for one,” Blair wrote.

The Macintosh TV

A new iMac with integrated TV functionality.

That’s the latest speculation from Wedge Partners analyst Brian Blair, who believes there will be a step between the Apple TV and the Apple Television.

“We believe Apple’s redesign of the iMac in the first half of 2012 will likely usher in some … TV capability into the iMac offering first, effectively taking the high end and larger screens of the iMac line and pushing it toward the TV market by integrating Apple TV and iCloud features into a slimmer all-in-one PC,” Blair writes. “Apple could effectively start with what they already have on the manufacturing line and slowly push their offering from 27 inches and scale up from there to 32 inches and then move on to the 42, 50 and 55 inch market.”

Blair figures these new iMacs would behave like Apple TVs, streaming movies, TV shows, photo slideshows and more to newer Wi-Fi-enabled televisions and providing them access to content stored on iCloud as well.

It’s not an outrageous idea, particularly as an interim step on the way to a true television set. Or as a good reason for consumers to abandon their current TV sets in favor of iMacs. This would be particularly compelling if Apple was able to persuade the cable companies to stream their content though the Apple TV interface. Add to that AirPlay mirroring on the iPhone, iPad, and iPod touch, voice navigation via Siri, and integrate it all into a 42-inch or better screen, and and you’ve got a pretty good reason to watch TV in your office. Or mount your PC on the living room wall.

Of course, Apple has been down this road before, first with the ill-starred Macintosh TV and then with its Front Row media center program, which was abandoned with the launch of Lion.

The company may not be interested in traveling down it again, particularly these days, when it seems so focused on disruptive changes. If Apple hews to that strategy for its HDTV, there will be no interim step. Just a single big announcement intended to upend the industry as we know it and send the competition scrambling.

According to Blair, Apple’s fifth-generation iPhone will be an incremental update to the current iPhone 4, not a major redesign. It will feature a faster A5 processor, a higher-resolution eight megapixel camera and possibly a larger screen. But beyond this, its design will be largely similar to that of the iPhone 4.

Says Blair, “We don’t expect a second, dramatically different iPhone to accompany this as we don’t think Apple needs to have 3 models in the market to address the high end, mid-tier and low end since the iPhone 4 (with memory lowered to 8 GB) will drop to $99 and effectively attack those markets.”

That’s an argument that does make a lot of sense. Supply chain chatter has suggested Apple’s prepaid iPhone, the so-called “iPhone 4S,” would be identical to the iPhone 4, with some minor cosmetic changes, a better camera, and faster processor. Which means it would likely cost more to build.

“Why would Apple bump up only the processor specs of the iPhone 4 in addition to a newly designed iPhone 5 if the goal is to sell it into the pre-paid market at a lower cost,” Blair asks. “A 4S would simply cost more and a 4S itself wouldn’t create a mid-tier market unless it was priced at $99 and the iPhone 4 went to $49 with the new iPhone at $199. We see this scenario as unlikely.”

Agreed.

An iFixit teardown of the CDMA iPhone 4 headed for Verizon reveals a world mode chip in the device’s innards: Qualcomm’s MDM6600, which supports CDMA and EVDO network standards as well as GSM and HSPA+. It’s the same chip used in the Droid Pro, Motorola’s “global ready” Android phone.

In other words, Verizon’s CDMA iPhone isn’t a world phone–but it could have been, given a SIM card and some additional engineering. Which makes it likely that the next iteration of the iPhone will be. And if iPhone 5 proves to be global ready, iPad 2 likely will be as well, as Wedge analyst Brian Blair, who first floated the idea of the World iPad, notes.

“This is the proof of my thesis, I think,” he said of iFixit’s findings. “This is a dual–band GSM/CDMA chip that I believe will not only be in a “World iPad” in April as I mentioned last Fall but I also expect it will be in the new iPhone 5 in June. It makes sense for many reasons: but the main one is that Apple engineers will only have to design a product one time, same guts and parts for GSM as for CDMA.”

[Image credit: iFixit]

A scathing appraisal, but Blair has his reasons.

• The PlayBook’s lack of native calendar and email applications, a core RIM strength that has oddly been left out of the device’s first iteration.
• The need to tether it to a BlackBerry to access those applications, a feature intended to appeal to enterprise by obviating the need for additional security measures, but one that will inevitably alientate non-BlackBerry users.
• A profound lack of applications and a sub-par application storefront.
• No easy mechanism for content delivery and consumption. “How will users get music or movies on there?” Blair asks. “Through the BlackBerry Desktop download manager? Well, we have tried this and it isn’t easy.”

(Considered drag-and-drop, Brian? Not the most elegant solution, I know, but a solution nonetheless).

These are the makings of a sharply inferior tablet, Blair argues. To launch it in a market alongside the likes of the iPad and its successor, as well as with forthcoming offerings from HP’s Palm unit and Motorola, is folly.

“The PlayBook demo impresses many people, including many tech writers, and we believe it’s because of the outstanding multitasking capability that is showcased in a coverflow manner,” Blair concludes. “This slickly shows apps running in the background while a main app runs in the foreground. While we agree this is a leap over what other tablet operating systems can do, we see it as a visual ‘smoke and mirrors’ because of the aforementioned shortfalls in getting content onto the device, offering limited applications, and excluding a native email application. In short, the PlayBook’s screen and hardware specs and multitasking capability look excellent on paper, but without the other pieces to the puzzle, it feels in many ways like an expensive web browser.”

But only because those who speculated about the existence of a Verizon iPhone have been struck by a new monomania: Speculating about first-year Verizon iPhone sales numbers.

Indeed, the sales estimates are already rolling out, with the consensus so far hovering between nine million and 12 milion.

“Some think 10 million is possible in the calendar year,” Wedge Partners analyst Brian Blair told me. “And I think it’s a reasonable assumption–not just because of what we’ve seen on AT&T but because you have three years of pent-up demand from users who are loyal to the Verizon network because of its coverage and reliability.”

Gleacher & Co. analyst Brian Marshall agrees, though he’s betting on sales hitting the top end of the range I mentioned.

“The iPhone on Verizon will sell 12 million units in calendar 2011 assuming there’s a ramp-up similar to the one AT&T experienced in 2007-2008 (i.e., 5 percent penetration of the postpaid subscriber base within five quarters of launch),” he told me, adding that AT&T will see a material decline in its iPhone sales as a result.

Taking a more conservative view of the iPhone’s prospects on Verizon is Piper Jaffray analyst Gene Munster, who expects Verizon to activate roughly 25 million smartphones in calendar 2011, of which nine million will be iPhones.

Barclays Capital analyst James Ratcliffe too is betting on that nine-million figure, and of those he expects approximately 500,000 to one million to be purchased by AT&T switchers. Said Ratcliffe, “We don’t believe that the addition of a Verizon iPhone will be a seismic event in the wireless competitive environment, although we do expect it to result in a modest spike in AT&T churn, as customers who love their iPhones but have become unhappy with AT&T’s network take advantage of the alternative.”

PREVIOUSLY:

• Verizon iPhone to Debut With Unlimited Data Plan
• Apple CEO Likely to Appear at Verizon iPhone Event
• Verizon Event Set for Tuesday–iPhone Time

“The BlackBerry PlayBook is expected to begin shipping in the U.S. in Q1,” RIM said in an email statement.

And there you have it.

Meanwhile, the device is garnering mixed reviews at CES. After some hands-on time with it, Engadget described the PlayBook as “blazingly fast, comfortable to hold, and intuitive to use.” Gizmodo liked it as well, talking up its hardware, responsive display and UI. “RIM’s got something here that could really stand on top of the bajillion other crappy tablets that are going to launch this year,” the site concluded. “They just have to take it the rest of the way.”

Wunderlich Securities analyst Matthew Robison agreed. “RIM’s PlayBook strategy [is] exceptionally compelling— pending successful execution,” he wrote in a note from CES. “The company’s ace card in tablets is sure-fire security for IT departments who loathe adding another piece of client software to enterprise networks.”

But others, like Wedge Partners analyst and RIM bear Brian Blair, were not so impressed. Though he praised the device’s sturdy build and crisp screen, he slagged its lack of native email and calendar support.

“There is not a built-in e-mail program that we saw, nor is there a calendar: arguably the two most critical features of a Blackberry,” Blair said. “Calendar and Email are only available, if the PlayBook is “tethered” to a Blackberry. Short of that, users need to use the browser for e-mail and calendar.”

And, admittedly, that does seem silly. Unless you’re a CIO. In which case, you probably prefer to push data (and remotely wipe it, if necessary) from one device instead of two, and appreciate the gesture.

Still, Blair came away with the impression that the PlayBook isn’t yet fully baked, and to be fair, it isn’t–after all, this is a pre-release device.

“We know this is an early build and that bugs are being worked through over the next couple of months, but nearly every feature we tried on our demo unit was having problems,” he concluded. “The video player froze and the games wouldn’t play. The only thing that worked was the ‘Coverflow-like’ scrolling of the different applications, which the device did with ease.”

But as Blair himself observed, a lot can change in three months. And presumably RIM is doing its damndest to ensure that it does–before Apple debuts the iPad 2, which will undoubtedly become the new standard against which all tablets are compared.

In the meantime, here are a few PlayBook promo videos RIM released in conjunction with CES.

“Even with a handful of tablet competitors hitting the market, the iPad remained the only game in town in our holiday checks largely because many of the tablets hitting the market are junk for lack of a better word,” he wrote. “They are underpowered, poorly constructed and largely not ready for prime time.”

Evidently, Blair wasn’t too impressed by Samsung’s Galaxy Tab.

Anyway…

The holiday season is always particularly kind to Apple, but this year it may have been even kinder than usual. In addition to the iPad’s continued momentum at market, Blair observed stronger than expected holiday sales of iMacs, MacBook Pros and the new 11-inch MacBook Air.

Sounds like Apple’s December quarter is shaping up to be another blowout.

“Recent checks…suggest Apple is going to be ratcheting down production of the existing 3G iPad over the next two months in anticipation of ramping up a new World iPad that is powered by Qualcomm and will run on both GSM and CDMA based networks around the world,” Blair writes. “Given our recent checks that suggest Apple is preparing to build approximately 48 million iPads in calendar 2011.”

Incidentally, Blair also says his checks suggest these next-generation iPads will include at least a front-facing camera and some design adjustments. “We…understand the new iPad is thinner than the existing model and is essentially made from one piece of metal with no pins needed,” he says. “We understand it requires a new type of manufacturing process as a result, similar to the company’s unibody approach seen in MacBooks.”

Such enhancements make perfect sense, right? As one longtime Apple observer told me, “I’d be stunned if it were otherwise.” The real mystery here is timing, he added, and–if Blair’s right about a dual-mode iPad–what role it would play in the company’s new relationship with Verizon, since a CDMA-GSM iPad would obviate the need for the carrier to bundle Wi-Fi-only iPads with its MiFi hotspot devices, as it currently does.

According to his supply chain checks, Apple plans to produce 45-48 million iPads in 2011, essentially double the most optimistic forecast to date. But even more stunning is Blair’s assessment of Apple’s iPhone forecast.

“We believe that Apple’s production forecasts for 2011 suggest iPhone units in the 100 million unit range for the full 2011 year,” Blair writes. “While a staggering number any way you look at it, our checks reflect full calendar 2010 builds in the 48-50 million unit range. While this number can change and adjust downward or upward based on demand, we believe it is incredibly bullish that Apple feels it is possible that they could see nearly 100 percent year over year growth for iPhone in 2011 as this would mean that exiting 2011, Apple would have approximately 10 percent share in the global handset market.”

The chart below (click to enlarge) shows what kind of quarterly numbers Apple would have to post to reach those totals.

So, 48 million iPads and 100 million iPhones in 2011. Seems a bit optimistic, though the company did sell 39.9 million iPhones in fiscal 2010, a 93 percent increase year-over-year. Given that, the “nearly 100 percent year-over-year growth” that Blair is talking about doesn’t seem as fantastical as it would otherwise. We’ll see, I guess.

With Motorola (MOT) and HTC building some compelling new Android devices and a new iPhone presumably on the way, there’s no telling what Nokia’s market share will be this time next year. The company desperately needs a worthy super-smartphone contender (it’s clearly not the N900 or N97) or it will end up reducing forecasts for market share and profitability in perpetuity.

So what should Nokia do? Wedge Partners analyst Brian Blair has a suggestion.

Nokia should buy Palm (PALM)–for its webOS operating system and for the guy who quarterbacked its development, CEO Jon Rubinstein. And then the company should abandon its Symbian and Maemo operating systems–Blair dismisses them as “inferior” and “lacking polish and smoothness”–and build just a handful of smartphones, all based on Palm’s webOS.

“You need each other,” Blair explains in an open letter to Nokia’s leadership. “You have the manufacturing and distribution capabilities and global carrier relationships and Palm has the second best operating system behind the iPhone. Alone, it will be difficult for Palm to ramp globally and compete with the top players largely because it takes meaningful marketing dollars to ramp units across global carriers especially while you remain focused on R&D efforts. You, by yourself, will cede market share to your competitors each quarter as smartphones become a larger part of global handset sales and you fail to offer a compelling offering in that category.”

Continuing his evaluation, Blair says, “I know you said you expect flat market share in 2010 but that isn’t going to happen if you don’t act. I think you could lose 10% of your share by the end of 2010 to your competition, taking your global share under 30%. However, together, as a unified company the two of you would rock the foundation of the handset industry and create real worry for your competition because each of you bring critical elements to the table that the other lacks and you would be a powerful force complimenting each other’s strengths and addressing the other’s weaknesses.”

As Blair notes, stateside carriers might not have been so quick to dismiss the N900 and N97 if they had run webOS. And developers might not be so hesitant to write apps for webOS if the market for them was as vast as Nokia’s. Finally, with Palm’s market cap at around $1.6 billion and Nokia’s at nearly $50 billion, the Finnish phone maker could easily figure out a way to finance an acquisition.

Interesting proposal, yeah? Tough to see Nokia adopting it, though. The company has been pushing Maemo pretty hard lately. And it wasn’t so long ago that it invested some $410 million in Symbian and released it as a royalty-free open mobile platform. It seems unlikely that the company would simply dump it now. Even more unlikely when you consider that Symbian is by far the world’s leading smartphone software platform.

But you never know. Anything’s possible. And remember, it wasn’t so long ago that Nokia was making rubber boots.

UPDATE: Looks like Blair’s assessment of Palm’s market cap is off, and by quite a bit. The company’s fully diluted shares number at least 236 million. With Palm shares trading at $11.73 as I write this, the company’s market cap is $2.7 billion, not $1.6 billion as Blair suggests.

PREVIOUSLY:

• Nokia Buy Palm? Riiiiight.

Sources say Apple has formally requested a network access license to sell the iPhone in China, but the license is for a customized model in which Wi-Fi support has been disabled. If that proves true, then Apple (AAPL) has finally bowed to the demands of China’s Ministry of Industry and Information Technology, which has been insisting that the iPhone run only on cellular networks.

As Matt Mathison, an analyst at Wedge Partners, notes, that’s a hell of a concession for Apple, which had no desire to customize the iPhone for the mainland market. “Apple was hellbent on having the iPhone be wifi-enabled,” Mathison told BusinessWeek. “The Chinese government has been just as adamant that it not be.”

Mathison added that now that Apple has conceded to Beijing’s demands, the iPhone may launch in China as much as three months earlier than expected. “We now expect it to come before the Spring Festival in [January] 2010,” he said.

Research firm Wedge Partners today took a look at the potential targets and came up with plenty of candidates. They think the company is going to enter a more active acquisition period, with most of the focus on smaller venture-backed companies, but adds that they could do “a handful of acquisitions” in the $100 million to $500 million range. And maybe a bigger deal or two. In particular, they see Oracle targeting deals in Software as a Service, virtualization and health-care technology.

Here’s Wedge’s list of potential targets in each of the three sectors:
Software as a Service:

Salesforce.com (CRM): Wedge notes that Ellison was an early investor and still holds his position; CEO Marc Benioff is a former Oracle exec. Wedge contends that “despite the bluster from both companies,” they rarely compete. They assert that Oracle’s SaaS offering is “greatly inferior” to CRM’s.

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However, earlier this afternoon–hours before the announcement–research firm Wedge Partners reported in a research note that one employee was killed (Update: the company denies there were any fatalities) and seven injured in an explosion on a cell-diffusion line, a processing step in PV cell manufacturing that uses high temperatures and combustible gases. The Wedge Partners note said that the seven injured workers suffered severe burns.

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Of course, the layoffs at Hewlett-Packard (HPQ) were expected, part of its cost-cutting integration after the $13.25 billion acquisition of Electronic Data Systems.

HP said yesterday that the 24,600 jobs the tech giant axed, or 7.5 percent of the total work force, were made to “streamline the combined company’s services” businesses.

But BoomTown has to wonder if other big tech and Internet companies might not be looking at HP’s move and the current economic mess and wonder if it might be a good time to pare down a bit, after a spate of overhiring.

In fact, the ill winds that will surely be blowing west from Wall Street remind me of the classic lines of noir crime novelist Raymond Chandler:

There was a desert wind blowing that night. It was one of those hot dry Santa Anas that come down through the mountain passes and curl your hair and make your nerves jump and your skin itch. On nights like that every booze party ends in a fight. Meek little wives feel the edge of the carving knife and study their husbands’ necks. Anything can happen.”

Indeed, bad times, as one smart exec told me yesterday over lunch, are very good times to clean house.

And, as I wrote yesterday in post called “Dear Web 2.0: It’s Still the Economy, Stupid,” the frightening gyrations of the financial markets will surely impact Silicon Valley, as much as the culture here tries to pretend it will never be affected.

And that’s why I am guessing the sector is going to be seeing some judicious job cuts from managers in the next few months.

Yesterday, for example, our most excellent blogger contributor, Eric Savitz of Barron’s, cited a report by Wedge Parters on the online auction giant eBay. Paraphrasing the Wedge report, he noted “the company’s business is ‘deteriorating’ and that the company is readying layoffs that could affect 10 percent of the company’s 15,000 employees.”

Many think companies like Yahoo (YHOO), Microsoft (MSFT) and even Google (GOOG) must start to smartly make cuts–even if they add in other areas–to make sure that they are lean and mean in a less frothy market.

And I am also guessing start-ups, even those flush with investment cash, have to be thinking hard about spending as freely.

While you certainly can’t cut your way into growth, a little prudence is one quality Web 2.0 is probably about to learn.