Listening to Research in Motion's earnings warning conference call made me wonder if co-CEO Jim Balsillie was talking himself out of a job.
The conference call was that bizarre. As background, Balsillie just a month ago talked about how RIM's latest products would be game changers. The PlayBook was hot and BlackBerry OS 6.1 devices would rev up carriers, consumers and enterprises. The biggest leap was that RIM projected a strong second half to its fiscal years as these new products stoked demand. The first half would be ok, but nothing great.
A month later Balsillie was explaining how RIM cut its outlook from just a few weeks ago because these new products were delayed slightly. Balsillie also made a few tweaks. For starters, BlackBerry OS 6.1 is now OS 7.0 because it's a major upgrade. Obviously, Balsillie realizes that an incremental OS update means RIM is screwed until 2012.
Key points from Balsillie-land:
- "Natural aging" of the BlackBerry line led to the outlook being cut.
- RIM is renaming BlackBerry 6.1 products BlackBerry 7.0 devices. Certifications are taking longer than expected yet carriers want the devices sooner than later. Delays are more weeks than month.
- Those new products were described as "beautiful" and "magical for the consumer and enterprise."
- BlackBerry 7.0 products are in the "final stages of being done." Why are they 7.0 now? "It's a huge upgrade with enhanced Web browsing, fluid touch screen graphics, improved memory and battery life," said Balsillie. "It's a huge upgrade for us. Wait until you see the styling."
These products will appear next week at BlackBerry World, which will resolve analysts' doubts. Memo to self: If these devices allay analyst worries they are miracle devices. Very few if any analysts bought Balsillie's pitch.
The big question: Do you believe? Balsillie does and argues that the new RIM product cycle sets it up for the next decade. Check out the PlayBook, urged Balsillie. "No one can doubt the performance of that machine," he said.
I'll give Balsillie that take on the PlayBook, but call me a skeptic about these new devices that'll save the day. If they don't deliver RIM---and Balsillie---will have problems. "There's no question these products are beautiful, they are going to happen and demand is high," said Balsillie.
These magical products are why RIM is sticking to its guns about $7.50 a share in earnings this year despite cutting the outlook for the current quarter. Bottom line: Balsillie is leaving RIM little to no room for error---especially if consumers and enterprises don't see the latest BlackBerries as magical, beautiful game changers.