RIM's biggest problem: Always seeking a device home run

Research in Motion is like a home run hitter in the twilight of his career---the big hits dissipate and the strikeouts pile up, but the bravado of the days past remains.

The smartphone's latest quarter was a disappointment again and the biggest takeaway is that RIM watchers have to hold their collective breath for the company to deliver a real hit. At this point, few analysts actually believe co-CEOs Jim Balsillie and Mike Lazaridis when they say RIM can ship 13.5 million to 14.5 million devices in the third quarter, up from 10.6 million in the second.

Why? RIM is arguing that its second quarter was a mere blip because it only had three weeks of BlackBerry 7 devices for the three months ending Aug. 31. Then again, RIM is basing its miraculous recovery on three weeks of data. As for the PlayBook, RIM is going to cut prices, update the QNX platform and advertise to drive demand. JMP Securities analyst Alex Gauna said that RIM's grand PlayBook plan could be "a colossal waste of resources given the shortcomings of the device."

Looking forward, it's instructive to understand how folks got to this point with RIM. The co-CEOs talk, but the believability is gone. Until RIM hits a grand slam the perception that the company talks too much and can't back it up will continue. Here's a look at Balsillie's statements on earnings conference calls over the last two years and what actually happened:

Sept. 15, 2011:

We've already seen a meaningful increase in sell-through and decreased churn in North American carriers who've launched BB7 handsets. And we have plans to more than double the number of models available in the US and increase the number of channels selling the products, which should further improve our position in the US. So this gives us a lot of confidence, coupled with the reviews and the competitive performance that this product has got a tremendous amount of runway and is going to serve us extremely well.

Outcome: TBD.

July 16, 2011:

RIM launched the PlayBook in Q1 in consumer electronics channels throughout the US, including Best Buy, Staples, Office Depot and many others, and we were pleased to ship approximately 500,000 units in the first quarter. PlayBook delivers on its promise of power, affordability and uncompromised web, and the user experience continues to improve as we add more and more applications and content services to the platform...The PlayBook is a significant product launch for RIM, not only because of the growth opportunity it provides but because it is the first BlackBerry tablet and the first BlackBerry device to feature the powerful QNX-based OS that will also become the core of future BlackBerry super phones.

Outcome: RIM only shipped 200,000 PlayBooks in the August quarter.

April 28, 2011:

We're calling BlackBerry 6.1, 7.0, BlackBerry 7.0 because it's such an upgrade from 6.0. And it's a huge upgrade for us. There's liquid graphics, there's a hugely enhanced browser and web browsing experience, there's a new, smooth and fluid touch screen, graphics acceleration for gaming and faster hardware and higher memory and improved battery life...the PlayBook is really quite frankly magical for the consumer and the enterprise. And we are supremely excited about our long term position.

You're going to see some very powerful stuff, as you should expect, at BlackBerry World next week in tablets, in SmartPhones, in consumer and enterprise that collectively shows what we're doing. And we're very, very busy at advancing this platform.

Outcome: BlackBerry World yielded delays and things like Android compatibility with the PlayBook are due in October. Balsillie said RIM could hit about $7.50 a share in earnings for the fiscal year. Today analysts are expecting $4.91 a share in earnings and RIM had to cut its guidance.

Dec. 16, 2010:

We have real differentiation and we have real opportunities for expansion of the business in a whole bunch of ways. Just the pent-up interest in the PlayBook is really overwhelming. And then the whole aspect of carrier billing and value-added services, you're just going to see a litany of things happening in that area, both for the BlackBerry PlayBook and BlackBerry smartphones over the year...This is not a time to be penny wise, pound foolish when you're really grabbing position in this rapidly expanding space.

Outcome: RIM has 4.7 percent of the tablet market, according to IDC. For the second quarter, RIM had 11.6 percent of the smartphone market, down from 17.4 percent in the same quarter a year ago.

Sept. 16, 2010:

Since the Torch launched, sell-through run rates have more than tripled in AT&T retail stores and Torch contributed to the best month ever for BlackBerry smartphones with Best Buy in August. In fact, based on sell-through in the first three weeks after launch in AT&T, Torch is the most successful GSM BlackBerry smartphone launch in RIM's history. So far adoption of Torch in the United States has been largely dominated by consumer and prosumer sales....During Q2 we introduced BlackBerry 6, which delivers a redesigned user experience, including visually fluid interface, rich web browsing, and an engaging multi-media application portfolio.

Outcome: BlackBerry 6 OS talk quickly yielded to BlackBerry 7 chatter. The Torch was cut to $99 at AT&T to generate sales.

June 24, 2010:

App World 2.0 users will also enjoy more functionality in the App World website enabling them to create an App World account, purchase content from the store, and sync content with their BlackBerry smartphone via a side-loaded connection. The concept of BlackBerry Super Apps continues to drive excitement in the BlackBerry developer community. We have been working closely with the developer community to help them understand how they can take advantage of the unique BlackBerry APIs and services and to challenge them to create innovative, addictive, and highly engaging Apps that can become an important part of their users' lives.

Outcome: App World trails Android and the iOS marketplaces by a wide margin. Microsoft's Windows Phone 7 store is also strong. BlackBerry continues to trail in apps and is trying to create an Android player as well as its own ecosystem.

March 31, 2010:

I love our road map for this year. You'll just have to stay tuned. We brought on a lot of development capability, a lot of platform extension. This is a -- this is a really -- quite frankly, enhancing gain in what you can do with the specialized devices and enhanced platform capabilities B2B and B2C. Our alignment with the carriers has never been better. Our ecosystem has never been better and all I can say is stay tuned. You're going to see some stuff by the call this time next quarter, you will see some stuff in the Fall. If you saw the road map you would be blown away.

Outcome: RIM has promised us continually that we'll be blown away by the roadmap. Back in early 2010, it was the Torch and BlackBerry OS 6. Today, it's superphones.

Dec. 17, 2009:

We have very special and distinct strategies with Verizon. We think it creates a lot of opportunity, the space is expanding. We think the richness of what we avail is clear. We think the alignment with them is clear. But the reality of it is there is a lot of turbulence in the ecosystem right now. There is a lot of turbulence in the channel. You just see this by the changes in strategies, the extensions in strategies.

Outcome: Verizon doubled down on Android over the following two years.

Related:

• RIM placing all bets on success of BlackBerry 7
• RIM woes continue: Q2 earnings hit amid weak demand, product shift
• CNET: With QNX phone, RIM must avoid PlayBook mistakes
• RIM: No retreat on PlayBook; Preps big October update