Blackberry: Past Perfect, Present Tense and Future Unsure (Reprise)
Apple and Android are squeezing and muscling Nokia and Blackberry out in the war of platforms/smartphones. Earlier this month Nokia sounded its profit warning and was unable to put a number to its quarter earnings through the rest of the year. Blackberry followed suit after it reported earnings of $695 million on sales of $4.9 billion compared to financial analyst estimates of $5.15 billion in sales. RIM shipped 13.2 million phones. Shares for the company fell nearly 23 percent to $27.19 (Contrast this with $140 share price in 2008). RIM now expects to make a EPS of $5.5-6 against an expected $7.This current second quarter, which ends in August, will showcase the continuing decline for RIM. The company is calling for sales of $4.2 billion to $4.8 billion.
According to ComScore, Android commands 36 percent market share, with Apple’s iPhone grabbing 26 percent. RIM is at 23 percent and falling.The shortfall in the United States is primarily related to the age of the BlackBerry portfolio. Android faces a pincer tong attack by Apple at the the top end of its portfolio and by cheap Androids at the bottom end of the portfolio.
Even when BB believes that its OS7.0 will be instrumental in turning the course, analysts and geek boys dont give BB a chance against iOS and Android. Product delays and overhead/headcount cuts are having a deleterious effect on RIM’s forthcoming QNX-based super smartphones intended to give the iPhone and Android handsets stiff competition.While new products in the fall should help,they will not be enough to stabilize share loss vs. faster moving competitors. RIM’s new BB Playbook has not cut the ice with the iPad fan-boys and is not expected to enthuse and excite unless RIM initiates huge price corrections which will impact the bottom-lines in a negative manner.