highly successful company investors often look to the outlook statements as
much as they do to the current quarterly earnings. Thus investors reacted
negatively to Research in Motion Ltd. earnings filings, despite strong profits.
Research in Motion makes the Blackberry smartphone, the device that arguably
launched the smartphone craze. Despite the smartphone market shifting
from lower volume business-devices to high-volume entertainment devices with
the arrival of the iPhone and then Android, Blackberries still sell well due to
their reputation as the premium business smart phone.
For the fiscal fourth quarter ending February 26, the Canadian phonemaker reported a net profit of $934M USD ($1.76
eps), up 32 percent from last year. The company pulled in total revenue
of $5.56B USD, selling 14.9 million Blackberries.
But RIM warns of a rough quarter ahead. It predicts its smartphone sales
to fall at a time when the smartphone market overall is
growing. It says to expect fiscal Q1 sales to fall between 13.5 and 14.5
million units. It also warns that its gross margin (a measure of
profitability) will drop 41 percent.
The company is making a concerted effort to make its business phones more media
friendly and "fun". The BlackBerry Torch was one example of that.
It was heavily advertised as a business phone that you could have fun
with, with ads showing business people riding on carnival-esque bumper cars.
So far sales of the Torch have disappointed, though.
RIM best hope at reinvention will be the launch of the RIM PlayBook. RIM predicts that it will sell
"millions" of units this year, though it didn't release the precise
sales range it expects.
The PlayBook is a major change of direction for RIM. To start, it's the
first device in some time to not feature RIM's BlackBerry OS. Instead it
features QNX Neutrino, a Unix-like operating system from third-party QNX.
Second, the tablet features much higher-end hardware than past BlackBerry
devices. A 1 GHz Cortex A9 processor is packed onboard, along with 1 GB
of DDR Ram, 16-64 GB of NAND Flash (depending on configuration), dual cameras,
and a 7-inch 1024x600 pixel screen.
Last, but not least, RIM just confirmed that the PlayBook would indeed play
Android apps, as rumored. That gives the device a huge boost, as
Blackberry App World is a bit deficient of apps, to say the least. With
Android Market's approximately 200,000 apps, the device should have plenty to
keep its users busy and productive.
But here's the only rub about the Android apps. The PlayBook will only
support Android 2.3 Gingerbread apps.
The Playbook launches April 19th in the U.S. and Canada. It should be
relatively well positioned with an introductory price of $499 USD.
That price could eventually turn into a problem, though, as it is
ever-so-slightly higher than the price tag on the slightly larger 8.9-inch second generation Galaxy Tab, which is rumored to
launch in June.
Likely due to Google's decision not to reveal Android 3.0 Honeycomb's internals,
RIM will not be supporting Android 3.0 Honeycomb apps. This is somewhat
of a big deal, as Honeycomb is an operating system built specifically for
tablets, where as Gingerbread was designed with smart phones in mind.
Aside from the general market shift, Blackberry was battered last year by service bans in several countries who were
upset about the company's encrypted connection services that prevented
government spying. The company also engaged in a war of words with Apple, though
ultimately both companies share a similar approach and face the same dilemma -- Google's Android.