RIM called a 'one-trick pony,' company's 'nightmare' seen as benefit to Apple
With Research in Motion's first quarter of fiscal 2012 officially in the books, analysts on Wall Street have begun to pile on the beleaguered smartphone maker, declaring its outlook bleak as competitors like Apple are poised to gain on its losses.
Needham & Company
Analyst Charlie Wolf started his note to investors on Friday with a question: "What do you do when your one trick no longer works?" As a "one-trick pony," he believes RIM delivered the "gold standard in messaging service," but little else.
"Consumers now want phones that provide a broad selection of software and services," Wolf said. "RIM has responded far too slowly."
In his view, RIM's one competitive advantage -- its proprietary messaging service -- will come under attack this fall, when Apple releases iOS 5, with its own proprietary iMessage application. Apple's solution, which Wolf called "effectively identical" to RIM's BlackBerry Messenger, will allow free messaging between iOS devices: iPhones, iPads and iPod touches. He also expects Google to "copy" the feature for Android phones "as quickly as it can."
The biggest challenge ahead for RIM, in Wolf's view, is to transition its "antiquated" BlackBerry operating system to the QNX operating system that powers its new BlackBerry PlayBook. RIM announced in its earnings on Thursday that it shipped a half-million of its PlayBook in the quarter, beating analyst expectations but not providing a sell-through rate.
Waiting for the QNX operating system to make it to RIM's smartphone is "like waiting for Godot," Wolf said.
"It's unclear when QNZ will be integrated into BlackBerry," he said. "RIM plans to introduce new BlackBerries running on the updated BlackBerry 7.0 operating system this summer. This schedule suggests that BlackBerries running on the QNX operating system are unlikely to arrive before the first calendar quarter of 2012."
Piper Jaffray
Analyst Gene Munster said that the latest earnings from RIM are not a negative for the broader smartphone market. Instead, they just show that RIM has failed to compete against the iPhone and devices running Google Android.
"In the November and February quarters, BlackBerry's handset unit growth has been flat while the overall industry has grown," Munster said. "As touch screen phones continue to dominate the landscape, with RIM's Torch and Storm touch screen offerings that lack the same key features of the iPhone and Android, we believe a slowdown in BlackBerry sales is not an indicator of the overall market."
Ticonderoga Securities
"When a disaster turns into a nightmare," analyst Brian White wrote of RIM's latest earnings. Like others, he sees the BlackBerry maker's struggles as a benefit to Apple, particularly in the enterprise market.
"Essentially, RIMM is struggling with market share as more innovative smartphones ramp in the market," White said. "We believe the challenges of both Nokia... and RIMM provide Apple's... portfolio with an opportunity for market share gain."
As for the PlayBook and its 500,000 units shipped, RIM did not provide any details on the actual sell-through. White believes that could be a concern for the company in its August quarter, and he does not see the PlayBook making a dent in Apple's iPad sales.
Needham & Company
Analyst Charlie Wolf started his note to investors on Friday with a question: "What do you do when your one trick no longer works?" As a "one-trick pony," he believes RIM delivered the "gold standard in messaging service," but little else.
"Consumers now want phones that provide a broad selection of software and services," Wolf said. "RIM has responded far too slowly."
In his view, RIM's one competitive advantage -- its proprietary messaging service -- will come under attack this fall, when Apple releases iOS 5, with its own proprietary iMessage application. Apple's solution, which Wolf called "effectively identical" to RIM's BlackBerry Messenger, will allow free messaging between iOS devices: iPhones, iPads and iPod touches. He also expects Google to "copy" the feature for Android phones "as quickly as it can."
The biggest challenge ahead for RIM, in Wolf's view, is to transition its "antiquated" BlackBerry operating system to the QNX operating system that powers its new BlackBerry PlayBook. RIM announced in its earnings on Thursday that it shipped a half-million of its PlayBook in the quarter, beating analyst expectations but not providing a sell-through rate.
Waiting for the QNX operating system to make it to RIM's smartphone is "like waiting for Godot," Wolf said.
"It's unclear when QNZ will be integrated into BlackBerry," he said. "RIM plans to introduce new BlackBerries running on the updated BlackBerry 7.0 operating system this summer. This schedule suggests that BlackBerries running on the QNX operating system are unlikely to arrive before the first calendar quarter of 2012."
Piper Jaffray
Analyst Gene Munster said that the latest earnings from RIM are not a negative for the broader smartphone market. Instead, they just show that RIM has failed to compete against the iPhone and devices running Google Android.
"In the November and February quarters, BlackBerry's handset unit growth has been flat while the overall industry has grown," Munster said. "As touch screen phones continue to dominate the landscape, with RIM's Torch and Storm touch screen offerings that lack the same key features of the iPhone and Android, we believe a slowdown in BlackBerry sales is not an indicator of the overall market."
Ticonderoga Securities
"When a disaster turns into a nightmare," analyst Brian White wrote of RIM's latest earnings. Like others, he sees the BlackBerry maker's struggles as a benefit to Apple, particularly in the enterprise market.
"Essentially, RIMM is struggling with market share as more innovative smartphones ramp in the market," White said. "We believe the challenges of both Nokia... and RIMM provide Apple's... portfolio with an opportunity for market share gain."
As for the PlayBook and its 500,000 units shipped, RIM did not provide any details on the actual sell-through. White believes that could be a concern for the company in its August quarter, and he does not see the PlayBook making a dent in Apple's iPad sales.
Comments
RIM really looks to be on the outs with both smartphones and it's lone tablet. That's a pretty quick fall and I wonder if they'll be able to recover in a year or so. Apple will be able to deliver a comparable push messaging service to RIM's BES on both the iPhone and iPad, so that could really hurt BES sales.
I smell something burning... smells like toast...
I smell something burning... smells like toast...
Mmm... toast and BlackBerry jam...
Microsoft appear smarter than BB. Yes, they late with Windows 8 on the tablet market, but at least thay don't rush with not ready product, like BB PlayBook. Releasing PlayBook in its current state was the Epic Fail for BB.
... and, like Samsung, they released a "shipped" quantity number instead of "sell through" number. Investors hate liars and RIM will be punished even more when the actual numbers are released (if they ever are released).
Nevertheless, all those laid-off RIM people and their families. I feel for them.
My late CEO father used to say, in business (and even more so in tech), if you're not growing, you're dying!
Microsoft appear smarter than BB. Yes, they late with Windows 8 on the tablet market, but at least thay don't rush with not ready product, like BB PlayBook. Releasing PlayBook in its current state was the Epic Fail for BB.
You could almost put Google in the same boat as Rim. Initial reviews of the Android tablet weren't exactly what you would call favorable. Google seems to get a bit more leeway though.
Jury is still out on Microsoft. Windows 8 could be a very good strategy for them (if it performs well) or bury them (if it performs like crap).
I'm more interested in what Microsoft do with messaging. I thought the combined Skype+Messanger user base, if merged with something like the Facebook social graph, would finally provide us with a full IP messaging platform (video/voice/chat/messaging) that everyone could use... but with Apple backing iMessage, the potential for Google to extend Google chat, and Microsoft not seeming all that interested to push Skype... it seems like chat is going to end up more fragmented, not less.
Sure the stock might take a plunge, but the company won't shut down and will just operate with a lower market cap.
RIM can't answer that right now. They need the vision to know what to put in their products to answer the question, and they need the focus to get it done. Unfortunately, they have neither. They're floundering about with their OS strategy. They shipped a tablet missing features.
I feel bad for them, but this is their own making.
Microsoft: MS have made noises about making their own handsets and tablets, this would get them straight in. They could rapidly switch RIM over to Bing to build mobile search market share, and eventually move them over to WP7. It would piss off their partners, but then their partners are already either being strong-armed with license fees or are so desperate that they don't have another option.
Nokia: While the mergers of two drowning firms is never pretty ( HP/Compaq anybody?) this might not be totally doomed. RIM have better software than Nokia (who doesn't?) and a loyal enterprise base. RIM would give Nokia an alternative to WP7, Nokia would give RIM deeper pockets.
Apple: Very unlikely because Apple hasn't done a big transformative merger since it bought NeXT, but not completely impossible. RIM has experience selling to enterprise, which is something that Apple lacks. Apple could rapidly switch over RIM users to iOS if it could just integrate the key security features and secure email services, also RIM would help solidify Apple's position in the patent wars - especially if they manage to acquire the Nortel patents.
Oracle: Now we're entering Sci-Fi territory, but Oracle is a very strange firm and very willing to grow by merger. They are already fighting Android on a java infringement case, and wouldn't be stepping on any significant partners - only HP and they aren't exactly bosom buddies right now anyway. Oracle have wanted a way to break MS's control over the desktop and mobile increasingly looks like a good way to do so, but they have no mobile presence or experience. Oracle CRM tightly integrated to a tablet like the playbook could produce significant sales.
Anybody I missed?
QNX is a REALLY nicely design OS, all its lacking is a pretty GUI on top. Mac OS X could learn a lot from QNX!
z3r0
Assume that they're shopping for a partner/parent, who might be interested?
Apple: Very unlikely because Apple hasn't done a big transformative merger since it bought NeXT, but not completely impossible. RIM has experience selling to enterprise, which is something that Apple lacks. Apple could rapidly switch over RIM users to iOS if it could just integrate the key security features and secure email services, also RIM would help solidify Apple's position in the patent wars - especially if they manage to acquire the Nortel patents.
Anybody I missed?
Any company needs to be able to answer the question: "Why should I buy your product instead of the competition's product?"
RIM can't answer that right now. They need the vision to know what to put in their products to answer the question, and they need the focus to get it done. Unfortunately, they have neither. They're floundering about with their OS strategy. They shipped a tablet missing features.
I feel bad for them, but this is their own making.
Because its a BlackBerry. They have a strong brand in the business world. Many of my classmates in business school bought blackberries over iPhones and Androids just because they were blackberries and business people use blackberries.
I'm almost willing to bet that Apple's share price won't be helped favorably by this news. I'll bet that Wall Street will see the fall of RIM to be a bigger boost to Android smartphones and Google will get the benefit.
No, because Android is not appealing to enterprise users at all right now.It has a reputation for poor security and the handsets have a reputation for poor support. It doesn't have a single vendor who plays well to the enterprise market, or who has the critical mass of RIM. It doesn't offer secure email that stays on the enterprise servers, and it's unlikely ever to do so since google want to be the email provider for android. It's open source, with a big licensing problem hanging over it from Oracle. Oh and the ecosystem is already full of malware and jailbreaks.
The reason that RIM have held onto their proits this long is because their enterprise customers don't have an obvious alternative as yet. The reason that RIM is losing market share is because their enterprise users already all have smartphones, so they can't grow as fast as the segment without winning retail consumers - and they're weak there.
Because its a BlackBerry. They have a strong brand in the business world. Many of my classmates in business school bought blackberries over iPhones and Androids just because they were blackberries and business people use blackberries.
I just hope you don't have shares in RIM. True believers always get hurt the most.
Well I would necessarily want Apple to buy, BUT if Apple had the chance to buy some of RIM's assets I'd say got for it.
QNX is a REALLY nicely design OS, all its lacking is a pretty GUI on top. Mac OS X could learn a lot from QNX!
z3r0
Hmmm....Mac OS X, a stable desktop OS in use for the past 10 years, based on a rock solid BSD platform that has been refined for more than 30 years can learn from QNX, an embedded OS that has never seen a day in a desktop?
Well look at that, seems AppleInsider's using its time machine to go forward in time to 2012, second time in two days!
It's RIM's first quarter of fiscal 2012.
Hmmm....Mac OS X, a stable desktop OS in use for the past 10 years, based on a rock solid BSD platform that has been refined for more than 30 years can learn from QNX, an embedded OS that has never seen a day in a desktop?
He was trying real hard to get noticed... so he thanks you.
...BB is still a status symbol for a business professional.
I disagree. That used to be true, though I think the status of a BB faded long ago.