RIM placing all bets on success of BlackBerry 7

RIM placing all bets on success of BlackBerry 7

Summary: RIM executives play the blame game and find excuses for disappointing sales of smartphones and tablets.

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If one didn't see Research In Motion's fiscal second quarter results before the investors call, then it would be easy to believe all of the excessively positive "guidance" offered by RIM's CEOs on Thursday afternoon.

Although executives tried to downplay disappointing sales of both tablets and smartphones during Q2, it's hard to believe they're fooling anyone. Investors and analysts certainly weren't. Just take a look at this initial response from global securities and investment banking group Jefferies:

FQ2 (Aug) results were below consensus and handset shipments were below guidance. FQ3 (Nov) guidance is below St EPS and GM estimates and FY12 guidance was lowered to the low end of the range, but we believe both of these will be difficult to achieve. We see the next two quarters as lame duck quarters ahead of QNX and expect full-year guidance to be lowered again.

Indeed, most analysts on Friday weren't betting on RIM's BlackBerry 7 devices to provide a meaningful boost. Yet, RIM is pinning all of its hopes on BlackBerry 7, which has actually proven its potential in just a matter of weeks.

See also: RIM woes continue: Q2 earnings hit amid weak demand, product shift

Co-CEO Jim Balsillie acknowledged that BlackBerry 7 made its initial launch only during the last three weeks of the second quarter. Balsillie attributed disappointing sales to this fact -- and although it comes off as an excuse at first -- shipments for BlackBerry 7 devices were already near the high end of expectations as the quarter closed.

Describing BlackBerry 7 as a "critical part of the transition plan," Balsillie affirmed that international launches are going well and that we're only beginning to see the results now. The platform and its devices have only just launched in Latin America, and Asia continues to be a stronghold for RIM.

Balsillie said:

Demand for BlackBerry smartphones was strong across all regions. BlackBerry 7 launches occurred over the past few weeks in most regions around the world, although rollouts in Latin America and parts of Asia will predominantly start this quarter. In North America, BlackBerry 7 smartphones are having an excellent reception, and have driven a meaningful increase in sell-through in the region during the last few weeks of the quarter, and so far in September. In the last week of Q2, BlackBerry 7 smartphones accounted for approximately 35% of our overall sell-through in North America. Outside of North America, sell-through increased almost 50% in the first 2 weeks of Q3, driven by the launch of the new Bold 9900.

With new BB7 smartphones that already are available in North American channels, and with more to come this quarter, we believe we are well positioned to take advantage of the upcoming holiday season. All of our major US carriers -- AT&T, Sprint, T-Mobile, and Verizon, have already or will be launching national marketing and promotional campaigns that will include TV, high profile in-store displays, direct mail, and targeted youth and college programs. Our major retail partners will also have dedicated merchandising space and targeted promotions over the course of the quarter to drive even greater awareness and sell-through in Q3.

Here are just a few of the stats:

  • BlackBerry 7 has already seen 147 launches with 90 carriers in 30 countries.
  • It has achieved over 600 certifications with 250 carriers.
  • The BB7-powered Curve has already received 1,018 certifications and is expected to be launched by 165 carriers in Q3.

Balsillie pointed specifically towards the 9900 as the cornerstone and success story of the set of seven now-available devices.

"The BlackBerry 9900 is seen as a thing of beauty to behold," answered Balsillie when asked about RIM's confidence in BlackBerry 7, "It’s getting great reviews around the world."

If these launches are going as well as RIM executives are boasting, then BlackBerry 7 really does match the transition (or comeback) that RIM is promising.

As mobile payment platforms grow, co-CEO Mike Lazaridis also pointed towards NFC technology incorporated in BlackBerry 7 devices as a key "differentiator on the enterprise market."

Although RIM reps didn't go into too much detail in regard to this feature during the call, virtual wallets are gaining interest around the world -- especially in emerging markets where RIM is strongest -- so NFC could certainly help boost sales with both the enterprise and consumer crowds.

The upcoming holiday shopping season could also give RIM the boost it is looking for as both CEOs constantly reiterated promotional plans with global partners.

However, RIM's disappointing outlook that dips below Wall Street's expectations for Q3 results do not match with the power of BlackBerry 7 rhetoric. Thus, it's hard to argue with the analysts who don't expect all of the greatness that RIM is predicting for the next few quarters.

Related:

Topics: Tablets, Hardware, Mobile OS, Mobility, BlackBerry, Security

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37 comments
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  • RE: RIM placing all bets on success of BlackBerry 7

    RIP RIM... No one will miss you... you deserve it!!
    browser.
    • RE: RIM placing all bets on success of BlackBerry 7

      @browser. doesn't it bother you, being wrong all the time?
      lorax1284@...
    • No, this is sad.

      @browser. I know some good people that work there. Unfortunate for them.

      Fortunately for them however, Canada has had no economic crisis or housing downturn, so they will find jobs soon.
      HollywoodDog
      • Canada does indeed have an economic crisis and housing downturn

        @HollywoodDog
        One just has to read the news to see that.

        www.therecord.com/news/business/article/593046--banks-downgrade-forecasts-for-canadian-economy-on-fears-of-global-crisis

        And though steady over the past three months. they are still well below where they once where, with a larger then normal inventory at hand.
        Tim Cook
      • RE: RIM placing all bets on success of BlackBerry 7

        @HollywoodDog... but the economic outlook has to do with oil, gas, raw materials like lumber and diamonds...etc. Not with engineering. Where are the telecom and software engineers going to go if Blackberry goes belly up?
        krustykanuck
    • RE: RIM placing all bets on success of BlackBerry 7

      @browser. As a systems administrator with 130 of them under my care, I'm still ordering. The 9810 and 9900 are being well received. Hope that doesn't make you a sad panda.
      dowlingm
  • RE: RIM placing all bets on success of BlackBerry 7

    Over all Blackberry is very useful for business, but I have to admit that on the regular user market it really is not the main player. Even thought business market is big and definitely growing all over the world, regular user will always dominate. I think that RIM should somehow find a new niche to be able to survive or change the strategy trying to acquire more of the reg user marketplace.

    www.xentrax.com
    Alex P
  • My advice for RIM

    Fly to Morocco and place it all on 22-Black.
    davebarnes
    • RE: RIM placing all bets on success of BlackBerry 7

      @davebarnes

      The shouldn't even bother with the airfare - just flush the cash straight down the toilet
      Alan Smithie
    • RE: RIM placing all bets on success of BlackBerry 7

      @davebarnes
      RIM's offices are closer to Las Vegas than Morocco!
      tech_ed@...
    • You mean 'Monaco'... (you geography sucks)... nt

      @davebarnes
      prof123
  • RE: RIM placing all bets on success of BlackBerry 7

    The problem, I think, is that you heard similar positive statements about how well the Playbook was doing. Even counting just the shipping numbers, sales fell by more than half. And you heard similar lines about "shipping at the end of the quarter" and "positive reviews."

    Now, the reality has set in. Why expect BB7, a known dead-end, to do any better?
    dhmccoy
    • RE: RIM placing all bets on success of BlackBerry 7

      @dhmccoy <br>Yes you are correct. Now Staples is giving them away for 349 (16 GB) with $100 coupon and on top of it RIM is giving away $100 prepaid MC, which comes down to $249. http://click1.mail.deals2buy.com/gncycmfghsndmnlmdkjkfdjpjsdrcqfnftjjqtycntmyr_wwwdjgldz.html
      Ram U
  • RE: RIM placing all bets on success of BlackBerry 7

    Blackberry has its die hard loyalists, it is very important that they keep the same values in product design that won them their loyalists. As for the platform game and growth, Apple and Android are limiting this greatly. Unless they produce an android compatibility layer they will not get access to millions of applications.
    ehabh
  • RE: RIM placing all bets on success of BlackBerry 7

    Well its time for the average Joe, and maybe even the less sophisticated Business User, to realize that RIM has the only fully Secure Integratable Solution. Whether you like business like tactile keyboard Blackberries are known for, or if you like the larger touch screen point and drop phones, you never have to worry with RIM about performance in Processors or Stupid mistakes with Antennas that stop the phone working when you hold it the Right Way. Hell even if you can't make your mind up, between Touch or Keyboard they have the dual unit that has both. And no one else has the Push Technology that RIM invented, nor the Integration with Secure CRM. Only RIM can give you along with Maximizer Corp the ability for you in the Field to keep you office updated with your Sales or Engineering activity and contacts, along with your Secretary or Receptionist being able to advise you when either a Client has come to your Office early, or the Accounting Department just put a Hold on the Clients account you are about to walk into. This type of full secure integration combined with the private messaging that made the Goverments choose Blackberries, is what the more demanding customer, not the kid in the street, wants out of a Blackberrie. The sound quality alone could be reason to switch but instead only reinforces the quality of a BB. As for the PlayBook, well if you need a presentation tool for a meeting, and you already have your Blackberry on your hip why buy a separate Data Plan. Business Users today are the highest Data Users of all the cell phone clients. Not the kids playing Angry Birds or posting to Facebook. This type of woven critically place solutions within our business world is why RIM will have its FAD days from other suppliers, but the mainstay of What Makes A Good Cell Phone, still remains with RIM. Take your iPhone and stuff it, and Android is cute but just doesn't make it in the business world.
    Cal
    calwoosnam@...
    • RE: RIM placing all bets on success of BlackBerry 7

      @calwoosnam@...

      DME from excitor is a secure solution for all Smartphones
      Aikon1953
    • RE: RIM placing all bets on success of BlackBerry 7

      @calwoosnam@... <br><br>"As for the PlayBook, well if you need a presentation tool for a meeting, and you already have your Blackberry on your hip why buy a separate Data Plan. Business Users today are the highest Data Users of all the cell phone clients. Not the kids playing Angry Birds or posting to Facebook."<br><br><br><br>I think you need to ask yourself why a company like RIMM spent all the time and money developing and trying to market the Playbook if it's a useless technology tool. If you can answer that, then you need to ask why such a company deserves your business or investment dollars.
      biobat
    • RE: RIM placing all bets on success of BlackBerry 7

      @calwoosnam@... Never fall in love with your handset...
      claritech
  • RIM placing all bets on success of BlackBerry 7

    You know this sounds just like the Nokia Symbian management betting on the next version back in 2009 -2010 time frame and look what happened. Instead of going full speed into Linux OS MeeGO or Android. So RIP RIM as you are circling the drain pipe.
    Aikon1953
    • Linux OS MeeGO or Android would not have helped Nokia

      @grimesdr
      nor could they help RIM.

      Android marketshare is based largely on low end phone sales, while Blackberry device are more costly, due to their superior design and manufacturing.
      :|
      Tim Cook