RIM investors fear more bad news on QNX

Wed Dec 14, 2011 1:59pm EST
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By Alastair Sharp

TORONTO (Reuters) - Research In Motion has already doled out a big helping of bad news ahead of its financial results on Thursday, but surprises could still await investors hungry for details about what many see as a new, make-or-break BlackBerry.

Investors are desperate to know whether RIM will stand by its current timetable to switch its smartphones to the new QNX operating system by early next year. The transition is considered the Canadian company's last, best chance to reverse its declining fortunes.

RIM acknowledged two weeks ago it would take a hit on unsold PlayBook tablets and ship fewer smartphones in the current quarter than in the third quarter just ended. That pushed its stock to lows not seen since 2004, and perhaps set a floor for expectations.

"Most of the news is on the tape," said analyst Colin Gillis from BGC Partners, referring to an already-depressed share price, which has fallen 10 percent since the December 2 profit warning and is now down more than 75 percent in the past year.

"The worry with this company is there's more bad news."

RIM has had its fair share this year, including a massive network outage, botched and delayed product launches and a precipitous fall in its share of the U.S. smartphone market as Apple and Google fight for supremacy.

Gillis said he will have a close look at RIM's balance sheet and cash flow this quarter to judge whether the company has the resources to survive the impeding transition to QNX, an unpolished version of which already powers the poor-selling PlayBook.

RIM made its name with secure, reliable communications for the world's business and government elites before branching out into what is now a crowded consumer market.   Continued...