RIM delays QNX phones, offers dismal outlook
By Alastair Sharp and Euan Rocha
TORONTO (Reuters) - Research In Motion posted a sharp drop in profit on Thursday, offered a dismal outlook for BlackBerry shipments around Christmas and delayed the likely arrival of a make-or-break overhaul of its smartphones, sending its shares tumbling.
RIM's shares shed more than 7 percent after the company said it did not expect to release a line of BlackBerrys equipped with the new QNX operating system until late next year, long after its initial promise of a first-quarter delivery.
It was the latest in a long series of setbacks for a company that once dominated the smartphone market but, to the chagrin of investors, is now struggling to keep pace with the innovations of Apple Inc and other rivals.
To make matters worse, RIM said it would ship just 11 million to 12 million smartphones in the weeks around Christmas, a range that lines RIM up for the first quarter-to-quarter decline in six years during the crucial sales season.
The likely drop bodes poorly for RIM as it was banking on an improved BlackBerry 7 line, equipped with the legacy operating system, to stem defections until it could release the QNX line.
"The matter that they turned in a bad quarter shouldn't come as a shock to anybody," said John Jackson, an analyst at CCS Insight in Boston. "I think the more important issue for RIM is that it is highly unclear exactly when they're going to be able turn things around."
The Waterloo, Ontario-based company has been counting on the new operating system to make up ground lost to Apple's iPhone and iPad and the slew of devices that make use of Google's Android software.
RIM's market share, particularly in the United States, has steadily eroded and its share price, down about 73 percent this year, has followed suit. Continued...