Wall Street analysts were quick to pan RIM on Friday after the company surprised with a pre-announcement of sales in its May quarter. RIM opted to disclose its sales early as the company expects its first quarter of fiscal 2012 to come in below guidance.
RIM also warned investors of impending delays for new BlackBerry product launches. That means, in the near term, RIM will have to depend on its aging BlackBerry portfolio, a situation that Brian White with Ticonderoga Securities believes is an opportunity for Apple to continue gaining market share.
"While RIMM continues to harbor high expectations for the second-half of (fiscal year 2012) as the new PlayBook begins to ramp and new smartphones are released, we believe the tide is clearly turning," White said in a note to investors Friday. "During the fall of 2010, Apple surpassed RIMM in market share and we expect this momentum to continue."
Earlier this month, Apple reported sales of 18.65 million iPhones in the second quarter of its fiscal year 2011. For comparison, that's 38 percent more than the 13.5 million units that RIM expects to ship in its May quarter.
White's pessimistic outlook on RIM's future was shared by many of his colleagues, who also issued notes on Friday. Robert Cihra of Caris & Company questioned how excited users and carriers are for this year's "evolutionary" BlackBerry OS 6.1 upgrade, as many people are waiting for a complete QNX-scaled rewrite of the mobile operating system.
Mike Abramsky of RBC Capital Markets previously had a "Top Pick" rating for RIMM stock, but downgraded to "Sector Perform" following the company's pre-announcement. "We were wrong, as mis-execution has undermined sentiment recovery," he wrote.
Charlie Wolf with Needham & Company said it's the "Android onslaught" that has finally caught up with RIM. With the company not planning to introduce phones running BlackBerry OS 6.1 until the second quarter, the company has "little ammunition (other than price) to repel this invasion," Wolf wrote.
Finally, Shaw Wu with Sterne Agee called the timing of RIM's pre-announcement "somewhat bizarre," as there is still more than a month left in the company's May quarter. He also noted that RIM revealed it has high inventory levels and lower than anticipated sell-through of its products, particularly in the U.S. and Latin America.