BlackBerry delay darkens RIM's future
By Euan Rocha
TORONTO (Reuters) - A months-long delay in Research in Motion's new BlackBerrys and a dreary quarterly report sent RIM shares tumbling again on Friday and pushed some analysts to sound the death knell for the mobile device that once defined the industry.
RIM's announcement late Thursday that it expected to launch smartphones powered by its new QNX operating system months after initially expected revived calls for the ouster of RIM's co-CEOs Mike Lazaridis and Jim Balsillie.
The delay, combined with a dismal performance outlook issued along with the quarterly results, sparked renewed chatter about the break-up of the Canadian tech giant, which has floundered as nimbler competitors claw away at its market share.
"RIM confirmed the BlackBerry 10 smartphones will be delayed until the latter part of calendar 2012. This could be game over for the BlackBerry franchise," analysts at Canadian brokerage National Bank Financial wrote in a note to clients. BlackBerry 10 is the name the company has given to the QNX phones, which RIM had initially expected to deliver in the first quarter.
On Friday, the delay spurred several brokerage firms to cut their price targets and ratings on RIM shares and sent the Waterloo, Ontario-based company's shares tumbling more than 12 percent on Friday.
"We see a high risk that this is too late to turn around RIM's position and believe the risk of further delays is meaningful," Nomura analyst Stuart Jeffrey said in a research note. "Even in the best case, however, it seems unlikely RIM will have large volumes of its BB10 devices on sale within 15 months."
RIM has been counting on the new QNX operating system to make up ground lost to Apple Inc's iPhone and iPad and the slew of devices that use Google Inc's Android software. The delay portends another long year of transition for RIM, allowing rivals to make further in-roads into RIM's market share.
RIM on Thursday also provided a gloomy outlook for earning as sales of an interim line of legacy BlackBerry 7 smartphones lag during the crucial holiday season. Even if shipments hit the high-end of RIM's expectations during Christmas, the company will still post the first annual decline in its history. Continued...