Here’s what really matters from RIM’s disaster headlines today

RIMM Stock Talk
By Chris Umiastowski on 2 Dec 2011 11:42 am
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This morning RIM made more headlines, and I don't mean that in a good way. The company announced a $485 million write-down of inventory. They also provided an update on Q3 sales and the Q4 outlook. There are two main elements to the press release, and I'll discuss both of them here.

The $485 million inventory charge will get the most attention in traditional media. That's because $485 million is a big (some would say shocking) number. It's the kind of thing that gets people to click on a headline to find out more. But it's actually the least meaningful part of the news.

While the inventory charge is a lot bigger than I expected in a post I wrote last week, it's still just an accounting entry. And it's still just a backwards-looking piece of news. It really doesn't mean anything to the future of RIM.

Here's why: When a device manufacturer buys parts to make their stuff, they are buying inventory. They record the value of the inventory at the price paid to purchase it. Then they convert the inventory into finished goods. The cost of manufacturing gets added in, and they now have finished devices in a warehouse ready for sale. Normally they would sell these products at a profit. The difference between sale price and inventory cost is the company's gross margin.

But when things go wrong, and you can't sell your products at a price higher than what it cost to make them, you need to write down the value of the inventory. You wave the accounting magic wand and declare a new (lower) value for the inventory. Since you already spent the cash to buy the components and make the products, the write-down is considered "non cash". It's the accounting way of saying, "We screwed up in the past."

In the case of RIM, it means they bought too much inventory. It also reflects past mistakes such as leaving the device so unpolished for so long.

Let's throw around some numbers.

Research firm iSuppli estimates the 16 GB Playbook cost $271 (parts only) to build. Add in some conversion cost (manufacturing) and you're at about $300. Probably a bit higher considering the product was new at the time and RIM always has lower yields on newer products. But let's go with $300 for the finished manufacturing cost.

When they discount the device to $199, they are losing a hundred bucks on every unit. One way to explain a $485 million write-down is to say that RIM has almost 5 million units of Playbook sitting in inventory (or as raw materials).

And in fact a big chunk of the inventory absolutely has to be raw materials, or what we call ‘work in progress' (WIP) inventory. I say this because RIM only had $298 million of "finished goods" inventory on its balance sheet as of last quarter. Also keep in mind that the inventory is not being written off to zero value. It's being marked down to reflect true realizable value.

So the entire Playbook write down really only tells us that RIM bought far too many components. It shows us they took a gamble that didn't work out. These things happen. But it's entirely backwards looking and doesn't do anything to help you evaluate the future of the company.

So let's turn to the REAL news ...

RIM also announced, much deeper down in today's press release, that it will be shipping fewer BlackBerry smartphones in Q4 as compared to Q3.

For those of you who don't follow RIM's financials that closely, let me break this down. Q3 just ended (November end quarter). Black Friday promotions would be included in the quarter but most of the Christmas sales would fall into Q4, which has a February end.

Over the last several years, RIM's sales have been dominated by consumers, not enterprise customers. They stopped reporting the breakdown, but everyone knows it's true. And since that time, RIM has always seen a very strong increase in Q4 sales.

I expected this year's Q4 to show a particularly strong bounce. I was obviously wrong. But I wasn't alone and I'll explain why some of us expected a strong Q4.

Carrier inventory has been dropping. In fact, during RIM's latest reported quarter (Q2), they shipped only 10.6 million units but end customers purchased 13.7 million units. With inventory bleeding from the channels like this, it seemed clear to me that Q4 sales (into the channel) would be very strong. You wouldn't even need a big spike in end demand. You'd just need stable demand and a requirement by carriers to maintain something on their shelves.

What does it all mean?

RIM's press release this morning tells us that they shipped about 14.1 million BlackBerry devices in Q3. That's up 33% from last quarter. That was already baked into guidance last quarter. It looks as if BlackBerry 7 did have a good launch, driving more end-customer sales, as a result, more carrier orders.

But this demand is not expected to continue into the Christmas quarter. That's bad. RIM is being assaulted by competitors. It's like they're having sharp objects hurled at them from all angles ... and they've been bleeding. I was looking to BB7 devices to serve as temporary shielding. And by temporary, I wasn't thinking a few weeks. But it looks as if this shielding has already faded.

It's no surprise that BBX is the only thing that can save RIM. However, I am surprised by just how little near-term protection BB7 has provided .

RIM is expected to launch its first BBX phones "early" in 2012. We're still not exactly sure what this really means. But it needs to be damn soon.

The inventory write-down tells us nothing about the future. The fact that BB7 phones are not selling well tells us that the future is at risk. But only the release of BBX phones and their inevitable success or failure, tells us what the future holds for RIM.

Disclosures: I own shares of RIM, Apple and Google.

Chris Umiastowski is the co-host of Stock Talk, a Mobile Nations podcast. You can follow Chris on twitter at  @cumiastowski and read more posts by Chris at ChrisUmiastowski.com.

145 comments

ifarlow

Excellent article of unfortunately bad news. I very much appreciate the facts as presented without the spin of "everything is wonderful in RIM's world." Here's hoping that RIM can turn this ship around, but I'm starting to line up alternatives just in case the first part of 2012 is more disaster after disaster.

Dim-Ize

Wow. This is very disappointing news for RIM - their ability to recover is extremely challenging.

Blackberry_boffin

Agreed. Admittedly advertising costs money but Blackberrys have clearly disappeared of late in the media it needs most; prime time tv where idle consumers see them and realise they still exist. In the tech sites where they have largely been advertised they have been hammered in reviews without offering counter action. The PB miscalculation stung them too and if a similar miscalculation is made on the BBX devices then its curtains.
In addition I think there has been so many handsets released this year that it would have been naive to expect BB7 devices to stay relevant. Why were the bulk of the BB7 devices released around the same time anyway? Proper pacing will have ensured the the interest sycle was prolonged.

guerllamo7

This is a great analysis. I would like to add that RIM made money this quarter and even if the gloomy projection takes place next quarter it should be quite profitable. The really bad news is that they are missing the boat on growth.

It is really to bad that the endless media criticism of RIM has had an impact. I have people tell me the love my Bold 9930 but are afraid RIM wont be in business next year. Same for the Playbook.

Even if RIM has had a year, that it wants to just get past, I do feel it will have a better 2012.

The OS7 devices are nice but the numbers speak for themselves. RIM does need the BBX phones, not to survive but to resume healthy growth in my view.

So lets go RIM. Get the BBX devices fully ready and then launch a great comeback!

gord888

so they are still turning a profit this quarter? so what is allthe hoopla about?!

taylortbb

Yes, missed in all of this media hype is that RIM will make a profit of about $650 million this quarter. And over the year will make a total profit of about $2.5 billion. While less than the competition, RIM is in no danger of going bankrupt like many seem to think,

ifarlow

And how does that compare to last year at this time? RIM might still be making money, but the rate at which they make it is slowing down. On its present course, RIM will stop making money and eventually start losing money unless they get this ship turned around.

taylortbb

It compares to $911 million profit in the previous Q3. Previous Q3 however was RIM's best quarter ever, hardly the fairest of comparisons.

I'll also note expenses will be up as they're now supporting the development of two platforms at the same time, with both BBX and OS 7.1 currently in development. You've gotta invest money to make money. Right now we're seeing the investment part, 2012 will have the make money part.

I'm not saying everything is peachy at RIM. But to think they'll be bankrupt in 6 months like many seem to think just isn't true.

ifarlow

So it's not fair to compare this quarter to last year's Q3 because last year's Q3 was RIM's best quarter? How is that not fair? RIM was doing well then, and not as much now. That's the reality of the situation and a very fair comparison.

Besides, while I don't believe RIM will evaporate overnight, I do believe they are struggling in a bad way. I am always amazed at the people that will continually make excuses for RIM (or any other company for that matter) because of blind loyalty. For example, so many people are hanging their hats on RIM's promise to release OS2 in February 2012 despite the recent and continual examples of RIM missing their mark. Why is February 2012 so special that THIS time RIM will get it right?

Anyway... I agree that RIM won't be bankrupt in 6 months, but I don't hold out much hope for RIM to get back to where they once were. The market is moving too fast. Several years go RIM missed the boat, fell of the dock into the water, and has slowly and uncomfortably discovered that they aren't the best swimmers out there.

cherolis

This is the kind of stupidity I'm talking about. RIM is making boatloads of profit.. but because someone else is out there making more... then RIM is somehow dying.

ifarlow

This isn't an issue of RIM making less profit than another company, this is an issue of RIM making less profit that RIM did last year. RIM is in trouble, like it or not. You can take that to mean I think RIM will blow up next year if you want, but I never said that. What I did say, and will say again, is that RIM is struggling. You can pretend it's all roses if you want, as misguided as that is, but I would rather keep my eyes open.

SBMobile3

Isn't that what the very definition of COMPETITION is?! No one told RIM to try to compete with Apple. It's their fault for being arrogant!

Chris Umiastowski

This is exactly right - that's what the investment community hates. RIM is shrinking profit-wise. But yeah, they're trading as if they will never make money again. Seems a bit overblown.

Navidb

They won't really make a profit of $650 million this quarter. That may be the "adjusted" earnings but to be accurate you have to deduct the $360 million in after-tax write-downs and any other "one-time" charges from their earnings. They will make a profit this quarter, but a very small one.

W Hoa

You might want to go back and either read or re-read the article. Something about 'non-cash' charge.

SBMobile3

iPhone 4/4S will make OVER $20 BILLION IN PROFITS this year in comparison!!! It's DEFINITELY NOT looking good for RIM!! Their numbers fall every quarter & you guys sit here & talk about their still making profits! DELUSIONAL SUCKERS!! LOL

Thunderbuck

What that says is that BB only holds so much of the market. Fair enough, but that's kind of like trying to say that Nissan is dying because Toyota sells more.

Apple's share of the market doesn't kill RIM. There are people who wouldn't buy an Apple product if their lives depended on it.

Android? At this point, there are enough security holes to keep it out of the Enterprise market for a good long while.

RIM isn't dying. They've had a really (REALLY) bad year, but to be honest there are some good, solid reasons to believe that 2012 will be an improvement.

yukiyuli

So true, they are going DOWN not without reason. RIM has lost it passion to make good product. Playbook is definitely a big flop. Now, let see what did they do to OS 7 devices.

9900 is top their top of the line product with bunch of problem, no autofocus camera (bad design decision), poor battery life (less capacity battery for bigger screen and faster processor - again bad design decision), faulty track pad, automatic brick, sleep in death, etc.....

9790 is their new launch with nothing almost nothing new. RIM got to slash the price 50% to attract crowd and yet it comes with some problem.

BBX probably can not help RIM

papped

Not sustainable. It's like death by 1000 cuts.

rfalter

I'm only replying to this post because it seems to be based on prayer, not business. There is virtually nothing in OS7 vs. OS6 that was compelling to last more than an hour....liquid graphics.....c'mon? First off, the PB is dead, dead, dead. The only press it has gotten is how much it is being discounted. If it's cheap enough, people will buy it, but that sets the new bar way down, and it's tough to ever raise it again. I'd bet $1000 dollars that there isn't a chance in h__l that even two BBX phones that aren't science experiments will be released by June 30, 2012. And RIM just has to cut back on the absolutely ridiculous number of models they offer, who in God's name can keep track. Apple, love 'em or hate 'em offer two versions, and 3 models of each, the ONLY difference being memory. Makes it kind of easy for consumers OR business. Plus, the number of SIGNIFICANT, USEFUL new apps for BB is dwindling...how wonderful I can get poker for free as a give back for RIMS October crash.

For those of you who think RIM is 'to big to fail' because they have cash on hand, dream on I'd be so surprised to see them in business a year from now.

dasdas1

I think BBX is going to be like Windows Phone -->>> Much too little and way too late.

iPhone and Android own the present and the future. RIM's stock price can only go down from here.

Thunderbuck

There are many users that simply will not get an iPhone. I don't know that Android has so many haters, but I'm pretty sure there's room for a third major platform.

Remember as well, that developers will easily be able to port their Android apps over to BBX... If you can hit double the customer base with only a little re-coding time, why wouldn't you take advantage?

merlenmeyer

I just saw a friend that had his iPhone 4s with him. He has traditionally been a Blackberry user, but was intrigued by Siri etc.

I showed him my Torch 9860 and after about 5 min he nearly decided to send the iPhone back and get a 9860.

I am not saying this to argue that RIM isn't in trouble, just that the iPhone is really more consumer-oriented in my opinion -- all the kids have em :-)

I am gonna write a review of the 9810 my wife has and my 9860. Not 100% satisfied, but have no thoughts about sending them back for iPhones.

ifarlow

You do realize that BlackBerries are huge with "the kids" in Europe, right? Might want to be careful throwing stones in your glass house.

merlenmeyer

I was joking about the kids ... duh!

sinsin07

All the kids have them? You need a vision check. Walk around any NYC office Building at lunch time. You will see business people on their iPhones. They may have a company issue Blackberry, but they have an iPhone too.

sinsin07

Porting Apps? The same thing was said about Webos. Didn't happen,

Chris Umiastowski

This is the risk, for sure. You're right.

Big difference for RIM is the user base. Way way way bigger than WP

gord888

Not really a fair comparison
1) BB still has a large following all over the world
2) While they are losing overall market share they are still growing

gord888

can someone explain how it can be inferred that bb7 devices wont sell well during christmas?

Kevin Michaluk

Because RIM is projecting Q4 to be down from Q3, but normally Q4 with Xmas sales should be a growth quarter.

psamson

I don't understand this thinking that BBX will somehow be the miracle saviour for RIM. When has RIM ever demonstrated that they understand software?

Consider Windows Phone. The tech press thinks it is amazing. The developer platform is solid and they have already hit 40 000 apps. By all rights it is an amazing, innovative, well-regarded OS with a strong developer following from a company that truly understands how to build a operating system. And look how well Windows Phone has sold.

Do you think BBX will be better than Windows Phone?

RIM simply doesn't have the chops for software. They've demonstrated that repeatedly when it comes to the Java BBOS and also are showing it with their inability to ship software and apps built on the new QNX platform (And it's a new platform! Zero legacy to contend with and they still can't ship email, PIM, etc. in a timely fashion) And don't talk to me about QNX. It's a OS kernel ffs. A kernel is at the lowest lowest layer in the software interaction hierarchy. It's not really all that different from the linux kernel used by Android, or the hybrid kernel in iOS.

And RIM is losing engineers and talent at an astounding rate. it hasn't received a lot of publicity but people close to the company tell me talented engineers are resigning at an alarming rate.

toppa

in addition is dingleberry make u wonder about QNX and how much a turn around we will see

biggietoms

Spot on, I dont think BBX can save RIM. I bet the BBX phone will be just like the Playbook great hardware but no substance when it comes to apps and such. and there is nothing to hold onto anymore, just a long hard fall. Makes me sad cause I Like RIMM.

Thunderbuck

You're not taking into account the easy Android portability in BBX.

In many cases a developer just has to convert the .APK Android app files to .BARs. In other cases, it will take some tweaking, but it should still represent a minimal effort compared to developing for an entirely different platform.

yukiyuli

if so why didnt they do it for QNX? nobody is going to make an effort for product that is not selling, nobody will use it anyway.

what i mean with nobody is where the user is significantly less than other

buckwylder

so i suppose this version of the playbook just became a promotional device rim is probably going to (have to) use like that, just get them out there, regardless. the money's spent, which is kind of what they're saying, hmmm

i like my bb7 device, i think a lot of other people do too
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papped

The PB was basically done once they missed the last 2.0 update release and waited too long to lower the price.

Sith_Apprentice

Could the lower number of shipped devices also be a product of EOL older handsets (OS 5/6 devices) and focusing solely on BB7 devices (which would then make a higher percentage of sales). I cant imagine carriers ordering any BB OS5/6 devices anymore since BB7 is out for everyone. It is also possible that RIM moved a shipment up into Q3 that was meant for Q4 because they solid sold out of their BB7 devices slated for Q3 release.

BillW69

It's ALMOST a great analysis. If your report is accurate, Q3 was quite strong but December, January and February will be weaker than September, October, November. Q3 includes all the "Christmas sales" because RIM ships in Q3 for December sales. It seems to me the only important Q4 metric will be how Q4 this year compares to Q4 last year. Q4 to Q3 is virtually irrelevant, I would think.

Chris Umiastowski

This isn't entirely true, Bill.

If you look back over many years of history, RIM has much stronger sales in the Feb quarter. Only some of the xmas shipments happen in Q3.

In addition, a very smart guy who educated me on this years ago explained that most cell phone sales actually happen AFTER christmas. It's a bit weird but makes sense once you hear the logic. In post paid markets, people tend not to buy phones as gifts. But after Xmas when people take their Xmas gift money, or return gifts for cash ... they use the money to buy themselves things. And phone sales in January are VERY strong as a result. Feb not so strong.

moe1up

Mission Rimpossible?

cmcichon

Great write up, Chris.

When I read the release this morning, I knew it wasn't great news, but wasn't entirely sure what it all meant. You're posts are excellent for explaining things down to a level that everyone can understand.

Just wish the news was better :-/

deadspoogi

how in the hell is the playbook costing THEM $300 to make? I'd say it costs them $150 MAX.

ifarlow

Well, since you say so it must be true.

Kishore Thaakur

+1
Exactly!! How the hell is it costing them so much?? Something seriously wrong with them..

tkao2025

"When they discount the device to $199, they are losing a hundred bucks on every unit."

Is this the price that the retailers are selling the device for or is this RIM wholesale price? If RIM is selling $199 to the retailer, than wouldn't the device sell for a lot higher in stores?

RIM-Administrator

"Outside of research and development costs, it cost Research in Motion $205 to produce a BlackBerry Playbook, versus the $280 that rival Apple pays to make an iPad."

Chris Umiastowski

You're right - I completely missed that. RIM must leave enough margin for the retail channel. Anyone know how much Best Buy pays for Macs? That might be a good comparison. How much margin is there on PC products at retail?

the_sleuth

margin on most electronics is less than 10%, computers 15%, Macs 15 to 25% depending upon the model

Sith_Apprentice

If you do a direct comparison between the expected Q3 numbers this year and last year you see the following (obviously RIM is making slight projections so these numbers are close)

q3 ending 27 Nov 2010 -
14.2mil BlackBerry shipped (Company record)

q3 ending Nov 2011
14.1mil BlackBerry shipped

q3 last year
5.5bil Revenue

q3 this year
slightly lower than 5.3bil

q3 last year
$1.74 earnings per share

q3 this year
$1.20 - $1.40 earnings per share

q3 last year
$2.5bil cash (increase of $446mil)

q3 this year
$1.5bil cash (increase of $80mil)

When you do a direct comparison, Revenue is down, shipments are slightly down, and EPS is way down. Q3 last year was also RIM's strongest quarter to date. However RIM is still increasing cash on hand (if only slightly). The outlook is not good at all, but it isnt "THAT" bleak. The full financial release will reveal alot more info, lets hope they continue to slow the bleeding.

hawaiiberry

Lately I've been looking at the iPhone and iPad ... seriously considering dropping my work and personal Blackberry devices ... and even my Playbook ... No 4G, no keyboard even for the Playbook, few decent apps for the Playbook, gotta buy a new device to use the new operating system ... all getting very clunky ... something better happen quickly ... once the 4G iPhone and iPads are out ... I predict a lot of us will be gone unless Blackberry offers something substantial. Blackberry should learn from the Palm folks -- they had some great product but didn't keep up ... We can only be loyal for so long ... work needs to happen!

ifarlow

I had forgotten all about that... what happened to the RIM keyboard for the PlayBook? It seems to have gotten lost in the same black hole as the significant PlayBook developments did.

BBA Brian

It is a great article, but, I am concerned how Chris is shocked by these developments

1. No RIM advertising
2. Aggressive ad programs by Samsung, HTC and Apple
3. Constant RIM bad press
4, BBX rumors of early 2012 launch

Why would it be a shock that OS 7 sales would slow down big time in 2012???????

I am the biggest RIM fanboy out there.. and I would not recommend and OS 7 phone to someone in 2012...

flashop

"1. No RIM advertising" <-- I think that has been one of RIMs biggest problems for awhile. This fact plus all the media bashing because we don't have Angry Birds and fart apps is killing RIM as well.

I will admit that we don't have as many apps as apple and android but I we have a lot more then consumers think. Consumers know nothing about BB7 and the app world today. They are basing everything they "know" off of what they know about the 8300's they are upgrading from. Day to day stuff my BB7 device and Playbook work great together. Every person I show both devices too love them and didn't know you could do what I do with my devices.

addicted44

"because we don't have Angry Birds and fart apps is killing RIM as well"

This attitude, which the co-CEOs clearly share (with their dismissive tone of giving the rubes thousands of apps with the Android emulation) is the problem with RIM.

I have an iPhone, and I have exactly 0 games, and no fart apps on it. The apps I have do the following:
1) Media management, and playing (Music, Podcasts, Shazam)
2) Financial tracking (keep track of all purchases and sync all transactions with my computer SW, and have easy access to all accounts).
3) Local information (Yelp, Grubhub, Seamless)
4) VNC (connect and control my computer from anywhere)
5) Sports (Fantasy sports, and ESPNs app for easy access to all scores).
6) Social stuff (Facebook, Twitter, Whatsapp)
7) Productivity Apps (email from 4 accounts, calendars and reminders synced between laptop, phone, and iPad)
8) Reading (News Reader, Kindle)
9) Travel Apps (Apps for local city information, and to buy tickets)
10) Recipes Apps (I enjoy cooking, and get a ton of apps from here).

The fart apps are the exception. Games are extremely popular, but there is a LOT MORE that is far more useful than games. There are many extremely useful apps (e.g., Square) that have spawned new business models even.

Thunderbuck

Ummm, almost ALL of the apps you named are available on Blackberrys (I love Shazam, for instance), so I'm not sure what your point is...

arkansasindian

His point might be that people use iphones for a lot of things other than gaming and fart apps..considering all those apps are available for BB, maybe media is bashing RIM not for the lack of angry birds, but because their products suck for the most part lately..have you considered that? I have been using a BB for 4 years now and I love the fact that I can get my company email on it very easily, but I am not sure if that is worth the headache of constant freezes and other myriad software and hardware issues..I will be switching to iphone next year..i will miss bbm, but hey, i think i will get over that..

cherolis

You use an iphone for financial tracking?

Then you're opinion can be summarily dismissed as you clearly know less than nothing about security.

The only cell phone anyone should go anywhere near any of their accounts with is a blackberry.

Flyerssignguy

Easy to understand BB7 Sales fading. Unless your Blackberry totally goes bad.........why wouldn't you wait for the BBX Phone.........especially if you have seen what the Playbook is capable of doing. I keep doing maintainance on my old Bold. Also, RIMM is going to get more Software makers interested in BBX, if more Playbooks are sold.....even at a loss..........which will help BBX Phone Sales.

Zetti

That makes sense to people like me an you and this community who share an interest in phones, but I just believe the general population has no idea what BBX phones are, that they are coming out, and what they are capable of. I think the unfortunate reason BB7 phones are fading are because they are depicted as inferior to android and iPhone.

jelp2

I wish they were given a chance to be depicted as inferior to Android and iPhone. BB7 phones aren't advertised!!! Thats RIM's biggest issue right now. Products nowadays need to be "in your face" with consumers. There's too much competition to hope for word of mouth. I wish they would take the bull by the horns and advertise themselves and not rely on the carriers.

papped

Because BB7 phones are a finished product and a known quantity. BBX is a complete hail mary and an unknown. You have no clue what you are getting into and so far the PB has not been a good indication.

Beesh1

I have been with RIM for a hell of a long time and I dont want this company go down. The fact that the playbook has a reduced price, allows it to actually compete and maybe outcompete the ipad2. But we all know how many fanboys there are for apple -_- brainwashed!

I say numbers have decreased because of the blackout of connection, because this problem doesnt occur with other companies.

ifarlow

Luckily there are no brainwashed masses supporting RIM, otherwise your comment might have come across as absurd. That was a close one. Good job.

BBThemes

the most logical reason (without taking any cometition into account) for the relative short term of BB7, is because of how much the media has hyped that BBX is going to be out soon, and much as the ip4S/5 rumours hurt apple in sales before the 4S launch, this is much the same, but maybe increased due to competition, and the fact its a different platform too.

papped

Or the fact that BB7 devices were insanely delayed, not super aggressively subsidized (the one exception being the 9810 on AT&T), zero advertising in the US (plenty of it in places like Mexico, India, etc), slow app upgrades from BB5/BB6 apps... There were so many things that went wrong it's hard to point at one.

Accell

STOP this talk! a world without RIM is not even thinkable. I just think they need to concentrate on a small number of phones, and then work on a few tweaks and software improvements on them. They are a true icon and need to keep that in mind. In a world of bigger and touch phones they need to bring on board a high end touch, but keep to the keyboard to which they should push, it is what they do best afterall. Can I please have a job at RIM, I would really love to be on board this amazing company and help steer the ship though these tough times.
I think RIM is the titanic and theres a bloody great iceberg, in the form of an iphone sticking out of the water, lets sail right round it and get into some clear waters!

ifarlow

Stop this talk? Nah... truth hurts sometimes. Perhaps it would be better for you to stick your fingers in your ears and repeat to yourself "I can't hear you... I can't hear you."

glennster28

BBX is a definite reason why BB7 sales will slow down over the holidays. For me, I'm holding off on getting BB7 phones and using my upgrade to get the BBX phone. I'm sure there are plenty others like me.

snowfort

People are waiting for BBX phones rather than commit to OS7. BBX will have to deliver a whole load of awesome.

cognatus

Nice article ..thank you

buckeyeind

Great article. You have to believe that any director of purchasing (at least U.S. companies) is not going to issue large purchase orders for the current playbook and BB7. There is a good chance that the large retailers are breathing a sigh of relief in that they emptied their stores of the PB stock (regardless of how good the PB is,or has the potential to be). Also, and more importantly, they have to be completely done ordering based on RIM potential and promises. I would think that it is a real possibility that you will not be able to find a PB on the sales floor until spring and that is only after the success of 2.0, not the release of 2.0. On a bigger issue, the sales of BB7 will continue to drift due to the BBX platform due "soon". I've worked long enough for global companies to know that "early" in any given year means "mid to late".
Even SAP is waiting for the 2.0 release on the PB while they have functioning apps for companies using Apple and Android tablets in the corporate environment. As the old saying goes "weight (wait) broke the wagon". Regardless of the quality of product, the constant "just wait until February"; "just wait for BBX" is tired and worn out. The public isn't waiting and neither are corporations.
The current regime at RIM has taken a bucket that was once full of integrity, emptied it to about 1/4 full and is going to play hell trying to fill that bucket again. It can be done, however, I just hope the end of 4th quarter doesn't bring a reduction of employees and someone can right this ship.

westex#WP

I think that Business is more likely to order BB7 phones than BBX phones because the BBX phones will have to undergo extensive testing before companies will adopt. That is one reason why the Playbook hasn't been adopted by Business yet. It appears they are all still in the "testing" phase.
Some good news is that with the Playbook fire sale there are now thousands of Playbooks "in the wild". That should certainly give developers incentive to develop for the Playbook.
Market share is the silver lining in a fire sale (see HP Touchpad). The Playbook, with a continued sale, could eclipse the Touchpad as the #2 player in the market.

Thunderbuck

Were I CEO, I'd be out every day doing by best to convince the major publishers to develop for BBX, and I hope that's just what's happening.

I agree, it's important for things like Citrix and VMware View and SAP to be on the Playbook, but it's also important to remember that Android versions can be easily converted.

I think at this point the major new app announcements are being held off until 2.0 launches. They'll add excitement to the launch, and there will be time for the dust to settle from the massive discounts.

cherolis

The sky is not falling people.

Rim is selling a lot of phones. They will sell more phones this year than they did last year. That's not bleeding.

The difference is the market for smart phones is expanding exponentially and RIM isn't keeping up with it. That is the kind of thing that Harvard business grads fret about... the kind of idiots that preach, "if its not growing its dying." its the kind of thing that very short sighted shareholders care about... but short sighted shareholders should be trading baseball cards instead of stock options.

ifarlow

Interesting. I wonder how many Palm faithful repeated a similar chant while Palm/WebOS flamed out.

cattonb

lol.. Palm never sold 14 million smartphones in a quarter... stop with the Palm/RIM comparisons

westex#WP

If you can't see the similarities between Palm and RIM, you really shouldn't be reading tech blogs. Both companies had terrific Operating Systems and faithful followers, but couldn't ship polished products in a timely manner. The "battle cry" for both companies? "Coming Soon."

Thunderbuck

Touche.

It really IS a different situation, though. RIM still holds considerably more market-share than Palm/HP could have ever dreamed of, and a lot of it is with customers (i.e. enterprise) who have a considerable infrastructure investment.

The other thing to remember (and nobody seems to if they keep making this comparison) is that PHONES NEVER WERE HP's CORE BUSINESS. And even if it were, it was a questionable platform.

There's no question that RIM has had an awful year. I'm not sure what they could have done differently with the Playbook launch (other than maybe price them more competitively from the outset), but on the phone side they're still doing well.

BBX is looking good. PB OS 2.0 is looking good (I'm impressed with the Android compatibility just in the Developer Preview). Fusion looks like it MIGHT be good, if it works as well as promised.

I'm seriously considering buying stock this morning, frankly.

ifarlow

The connection between RIM and Palm is not so much the devices they make (or made, as the case may be) although the delays do account for many issues both companies have experienced, but it's more so the arrogant attitudes of the companies. Both rested on their laurels and are paying the price. RIM is now floundering, much like Palm had done years ago, and given enough time with not enough changes, RIM could end up fading into history like Palm is doing now.

I hated to see Palm's light fade out, but I found it shocking all the comments flooding in to PreCentral when it happened. So many people wanted to act like they never saw it coming. How could they be so naive?

I see it happening again.

Thunderbuck

I don't know if "arrogance" quite comes into it so much as just the market moving faster than they expected.

It doesn't help that for much of this year RIM's product announcements were, um, less than credible at times.

RIM still has market share, and they're still MAKING MONEY. I think they can still come out of this.

BTW, I'm not sure Palm's demise was exactly arrogance, either. They just didn't have the resources to enter the phone market with a truly competitive product. Being bought by HP put them on life support for a couple of years (and Meg Whitman hinted this week that the platform may not be abandoned completely), but I don't think it was arrogance.

ifarlow

Perhaps arrogance is the wrong word, although if it weren't so early I'd go looking for examples of what I mean. Nevertheless, the point still stands that Palm was Palm's own worst enemy, and RIM seems to be in the same boat (and has been for several years now).

On a side note... for Meg Whitman to be taking so long to "decide" what to do with WebOS suggests to me that she is delaying the inevitable announcement that WebOS is gone. She has already hinted that it would cost too much to sustain in-house, so I'm not sure what people would expect to happen with it at this point.

Snowman888

As much as we all love RIM phones I think we have to see the gravity of the situation, the majority of the public do not care for RIM products... It's that simple.
I engage with a lot of people and not one conversation is ever, 'I want to switch to a BB when my contract is up' RIM needs some marketing magic to change this.

Toasterg

Exactly, I believe that RIM need to find some ways to deliver the benefits and strengths of their products to the eyes and ears of people, and to let them know why those strengths are relevant to the users.

Whenever I talk to someone about BB, no on ever know about the goodies like keyboard shortcuts, themes (ok, OS7 not included), "actual" cut-and-paste, accurate/fast text selection (especially the two-fingers instant selection since OS6), fast folder and icon management, blinking led, convinence key, and highly customizable sound and alert profiles... etc.

Although these things can be "excessive/hard to learn/hard to adapt to" comparing to iphone etc., but they are very powerful and handy when we get to use them. However, such benefits are virtually not seen anywhere in any of RIM's promotional material. This really get me scratching my head, because successful companies wouldn't hide the unique benefits (or just features) of their products from potential customers, its like selling a Ferrari without telling people that it has a kick-ass engine but only talk about the tires and windshield.

Toasterg

For the Q4 shipment part, I really hope the weak # is just a result of RIM finally learned to provide delibrately depressed numbers so the actual result can top the projection.

DaedalusIcarusHelios

That's what I was hoping too. Take the hit now, and then in February nothing but good news...

anthogag

The media constantly questioning RIM's future is a huge source for steering consumers away from RIM devices in the US.

Even this thread, in a BB fan site, has vultures.

Current BB devices are great. I hope their new marketing strategy is more aggressive.

theRock1975

Nice post Chris. I'm following the stock very closely as well. I'm glad you took the time to explain that it was an account receivable write down and not a cash write down. Unfortunately the average person will take it as a loss. Looking at the bright side, the 199 frenzy was definitely a good thing. It's a highly competitive market and they should push as many of these devices out as possible to lift up BBX. I can't believe how much money I already spend on apps for the playbook.

Thunderbuck

Let's be honest, a near half-billion writedown is bad, whether it's A/R or cash. Most institutional investors don't draw a big distinction on that.

Even so, I agree that the fire-sale prices moved a lot of product. And the Android compatibility in 2.0 will attract a lot of attention, too.

Hopefully, these sales (and RIM's strong expressions of faith in the platform) will draw the notice of some developers.

Chris Umiastowski

IMPORTANT: It was not an AR write down. That would be the same as cash. It was an inventory write down. Probably just a slip of the keyboard on your part (?), but just wanted to make sure other readers don't get confused.

kingbernie06511

ANYONE who though that OS7 devices would shield RIM from anything has been living under a rock and has no idea where the market is moving towards.

Their CPUs are 1-2y old, no front camera so no video chat. No innovation at all from OS7 devices. Their hardware is not even BBX compatible. And regarding the 9900, there have been Google devices with Android with a touchscreen+keyboard. Hardly innovative. And the BBOS is old. Put that all together and you have a recipe to sell little devices with low margins.

In fact, OS7 was supposed to be OS6.1. This is clever marketing though.

DaedalusIcarusHelios

Have you even used one of the new BB7 devices? Night and Day from my Storm. The interface is very smooth too. I have a ton of apps installed, and I'm really impressed with my Torch 9850. The fact is that most people have a preconceived notion of BlackBerry based on older devices, and aren't willing to discover that the new devices are a major improvement in so many areas, yet still maintains the strengths of the platform.

Regarding the version number of the OS - who cares? It's not like version numbering in the past made any sense (ex: 4.7 -> 5.0). The improvements from 6.0 to 6.1/7.0 are substantial, and with the hardware requirements drawing a line in the sand, the distinction was necessary.

Zetti

I agree with you that new BB7 phones are a big step up for Blackberry's. There is little argument there. But take the Blackberry name off of the phone and you have something that the market has already seen, and seen over a year ago.

DaedalusIcarusHelios

Some bleeding edge Android phones may have had some of those specs (or better) a year ago, but there are still high-end Androids that recently came out with less RAM, for example. RIM has been slow to advance the specs, and the BB7 phones should have been out in early 2011, but many high-end Android phones also have had lag, battery drain issues, and inferior corporate email functionality out of the box (anecdotal evidence at my work from fellow IT guys that have them). I think if you not only strip out brandname but any info on specs, the BB7 lineup is right up there in user experience, IMO.

jpcharlie247

All true, and I completely agree with the math on paper, but we also have to at the human aspect of the market as well. I was running with an 9800 and was content until i could not pass on a great deal to get the 9810. However I would be bold to maybe say that yes on paper sales may look down but what is going on in my head is, "why invest in a newer OS, when right around the corner will be a completely new device with a new operating system?" That would be my two cents. I would guess that all BB addicted out there, including me, who are updated on all BB new, are just waiting for our new phones to hit the market in 2012. I know I am warming up the car now!

sadi85

BBX won't save RIM, It's not about the core quality of an OS that's important, rather the whole ecosystem. I guess the best way forward for RIM is to adopt Android OS and do some minor tweaking to make it work with BES, and forget about BIS altogether.

kingbernie06511

yeah but the start of an ecosystem is recent hardware running quality software in a compelling package.

Sith_Apprentice

This is a terrible idea. Why does everyone push RIM to go to Android? That would leave them as a hardware manufacturer. No, they would fail even faster in that environment. They need to outsource their HARDWARE not their software. But BBX on an HTC/Samsung/Motorola high end device and THEN see where the market goes.

DaedalusIcarusHelios

I agree - going full Android is retarded. QNX is a superior platform to build on, and with Android app support, its the best of both worlds. I haven't had as much luck as I had hoped with app conversion (for the apps I want), but hopefully RIM will continue to work on the Android Player, update it to support 4.0 since the source code is out. The build up of native apps will take a while, so Android fills the app gap (at least theoretically).

I don't think they necessarily need to outsource their hardware though. They are more than capable, they've just not been focused on making the right decisions in that area. PlayBook has good hardware, and BB7 phones were a huge leap (although still lacked front-facing cameras, and weaker CPUs compared to the top-end competitors). I think the first BBX phone will be competitive in hardware, but probably not bleeding edge top-of-the-line. I'm ok with that as long it has all the features and functionality as the competition in both areas.

XPEH

A wave of analyst downgrades is gonna follow very shortly.

saalnaz

many are talking about BBX phones here as if its going to be a ground breaking thing.
I'm a fan of BB and i own the 64 GB playbook. sometimes, people on the other side of the atlantic fail to see what companies on the opposite side can offer. Im sitting in Dubai here where i get the best of almost all worlds. companies like Nokia/BB/apple and Samsung have large market shares and people are not so one dimensional when it comes to choosing their gadgets.

why im saying the above is because i have just recently bought the Nokia N9. many people on the North American side have not heard of this phone but ofcourse they know the brand 'Nokia'. the phone is based on meego OS which is new and its linux based but a very good OS indeed. i always say, if BBX can do 75% of the things that this Nokia N9 can do, then i will consider it a success. the funny thing is that Nokia is considering to kill off this new OS for the sake of going with eco friendly 'WP' platform. and the interesting thing is that many people are more interested in the N9 than their recently released WP phones which they are heavily marketing because people wanted a new thing which is absolutely unique.
N9 has been released in late september/early October. i was not even thinking of the phone or Nokia in general but i was never an ihpone person nor a bloody Android person so this phone came out of nowhere and i checked it out and i fell in love with it on first sight!
let me say this, almost all if not all reviews about the N9 have been positive. yes, even the american based reviewers have been blown away by this device and i know how many BB fans complain of the biasness of American outlets toward BB products but if you need to see how bias they are toward Nokia in general and other european based OEM/OS.
http://www.engadget.com/2011/10/22/nokia-n9-review/
the phone is gorgeous and it can do what many BB fans want from the BBX phones in terms of having no buttons on the front side and the swipe etc. There are fewer than 1000 apps for the N9 so far but guess what, i still think the limited number, which will grow ofcourse, are better than BB/playbook are offering. yes, apps are very important and if you can mix it with a proper phone you will have a winner. many have said that this N9 would have been the official iphone killer as it can do so much more than an ihpone and it is so intuitive and easy to use but Nokia CEO (ex. MS executive) is called a trojan amongst Nokia fans and it seems like Nokia fans want to boycott the recently released Nokia WP phones as a resentment to the decision of their CEO to dump the Meego platform and go for a WP which will pretty much make them an OEM with low margin sales.
yes..i think many people are into apps (fortunately or unfortunately) and it is strange to see the lack of quality in PB apps until this stage although the tablet has been released for what..8 months? 7 months?? while a new platform by nokia (2 months) already showing better app catalgoe.
the biggest mistake with PB was it was released without the major apps which people want like stupid angry bird/skype/whatsapp and many others. and it was released with some basic stuff that should have been there like email etc..
the Nokia N9 has come with angry birds (it is actually cool that you can unlock certain levels of the game by using NFC to tap other NFC based devices and the NFC infact works on the N9 unlike the BB9900. N9 comes with the skype albeit the voice only at this stage. it has great mapping app (nokia owned). it comes in general with some nifty apps.
i feel that american companies are trying to shaft RIM and trying to take it out of business by not giving it premium apps like skype/the stupid amazon book reader etc...RIM, as i said before, should just give some proper money to those companies to get those apps on its platform or their sales will suffer.
if those companies still insist on not selling the right to use their apps, just develop similar new apps with 3rd party companies to make them cross platform (whtsapp comes to mind as people use it alot who are not on BBMs).

people said BBX should come with a killer hardware but i think many people want the software and apps more. N9 has taken a lead in doing what BBX is trying to do and its a wonderful little device and im very happy with it. I have a BB but i would never buy a BB as a personal phone. i get it from work so i decided to go for full touch screen but with uniqueness and beauty.

cal919

With multiple outages and the poor device options and quality I am the proud new owner of an Iphone. Now that I have it I really don't know what I was waiting for. RIM has a cancer that will not go away.

thecsman

So, owning a phone (your operator is the one that really owns it) makes you proud.

jimread1949

Hi everyone, just so you know I love Blackberries and would not consider another phone or tablet I have a curve 8530 and a 16Gb playbook. Also I love Crackberry.com and log on every day to keep updated. What I don't love any more is the winging whining users that appear to infest the Crackberry site. Will these people ever stop their doom and gloom whining.
Q1) why do you need a 4G playbook?
A1) I am sick of getting free internet 3G access I want to pay a carrier
A2) I want a 4G playbook even though there is no 4G service from any carrier (Reality)
Q2) I want native email on my Playbook
A1) I hate it that my phone see's my emails
A2) When I go out I take my playbook with me and leave my cell phone at home
Q3) List of and quantity of companies that went bankrupt with Billions in cash and profit
A1) None
A2) Still none
Q4) Reason to drop Blacberry and go to another system
A1) Must have an android so my files can be hacked
A2) Want iq software pre-installed (android and ios)
I could go on and on but there is no point, you have the best phone and tablet on the market so stop whining and support RIM in the US like its supported world wide

bitek

My first comment is.

1. How many Playbooks have been sold. 5mil would be a great news.
2. I would love to buy RIM stock because this company will come back.

ifarlow

1. 5 million? No chance in hell.
2. No one is stopping you, so buy all the stock you want. Enjoy.

thecsman

If they keep pushing hard, they could reach 1 million total since launch before year's end. Then, they should celebrate this with some advertisement.

ifarlow

If they could, then they should definitely advertise that milestone. Unfortunately, RIM isn't so good with advertising.

bitek

5mil might be over optimistic but for sure Rim sold way more than 1m.

ifarlow

No, they didn't. RIM may have shipped close to 1 million, but they have not sold nearly that many. Big difference, which is why RIM loves to talk "shipped" not "sold."

tboyd1120

RIM pisxxd off all the carriers by emplementing bridge on the playbook and the carriers have lost a lot of money by not being able to provide data plans for playbooks. If the carriers don't promote BB and they don't carry the latest and greatest and don't push BB. Blackberry brand will not sell. All the carriers are taking out their revenge on RIM. Playbook is a fine product but RIM is loosing the PR battle with the carriers.

FASHER

Guess I'll be on the Blackberry ship until it does whatever.

Even though I could never manage without my keypad, I still wonder why BBerry didn't do a better job of jumping on the "powerful, thin, sleek, mega storage, fancy touchscreen" phone bandwagon...... Obviously, I mean better than the Storms....

Thunderbuck

The 9800 was decent, as are the current Torches. The new touchscreen Bold is doing great.

The phone side has been a bit of a letdown, but I see some hope.

undone

With a wave of lower end phones coming out/releasing I think they are understating the potential demand. RIMM is suffering from waiting too long on devices between cycles, hence the overall year picture is weaker. Will the consumer want a low end BB? Possibly. Are they planning on talking up new BBX devices during DevCon Asia? Again Possibly.

As another note, I just dont believe every one wants a touch screen phone.

engineer2001

Ouch. My wife loves her Bold 9930. I hope RIM picks up the pace and outdoes Windows Phone in the future. Everyone seems to think WP7 is going to be the last nail in RIM's coffin. They had better get that London device out like yesterday (and not full of bugs). If they have an employee that gets the weekend off, they need to be asking why at this point. Work, work, work, and crank out that new savior phone ASAP.

ComfyJammies

It's all kind of sad. Before the iphone came out, RIM was so far ahead, and they sat on their laurels. I love my 9930, but say, oh goody, now RIM is only 1-2 years behind, and this is the phone they should have been selling 2 years ago. Too many missteps, too many crappy phones in between. What the future holds is really up in the air . I've been a BB user for 5 years, and I like my real keyboard. But if things don't change, I don't know if I'll stay.

pauldriver

Just got my playbook and it's impressive, the G.F. wants me to swap her for her samsung tablet, I'm gonna have to figure something quick (lest I risk the domestic bliss).

If RIM can get a BBX phone out quickly with just moderate security (better then Android) they will start eating Google's lunch, and may erode Apple's market share as well.

Sadly, this is unlikely to happen. I've been dealing with RIM since the BlackBerry pager days, and they are not good at hitting release targets.

akaquietstorm

Great and well delivered article..

koool1

I have said all along the only thing RIM should be working on is getting the QNX phones out and getting them 100% right.. ASAP.

I have my money ready RIM, I love my Playbook and my Torch but I want a QNX phone. If it isn't out soon and as promised - a Google phone is my next stop sadly. Please don't disappoint a loyal fan!!

Thunderbuck

One significant point to note, though: that cost analysis on PB losses doesn't factor in that the 32GB and 64GB versions only cost a few dollars more in parts, and nothing more to build.. The margins on them are much heathier; on the 32s they're probably close to breaking even and on the 64s they may even be making money.

Kekus

Great article, I like that you stuck with the facts. Also lots of interesting comments about what people feel the future holds for RIM. The reality is that no one knows. Consumers are fickle and can change direction very quickly - if given the right reasons.

I have the 9900 and love it. I also have a Playbook 64gb and love that too. I also agree that RIM moved to slow, giving up the huge lead they once had. Their lack of visible marketing in North America has been noticed by everyone. What the reports typically don't call out is how many of the Android phones are high end vs.the low end cheapies. Consumers in a slow economy that want even minimal smart phone capabilities will go for the free Android over both the iPhone and RIM product - because they can afford it.

So what does the future hold for RI M - It comes down to execution. The company is cashflow positive, so they do have time on their side. If the Android emmulator works as many of us have seen on the Playbook, then the whole "number of apps" issue goes away. Also as they move to BBX their cost of supporting the phones will start to decline as they'll only have one playform to support - Apple figured this out from the get go, RIM gets it now, and no, it's not too late (I'm sure many thought Apple was dead in the water a long time ago). For those who think the QNX software is just another operating system, do your research. It is argueably the most stable and efficient platform out there. How many times have you had to "reboot" your playbook. For me, since April, the number is 0. I've only ever run official releases, never side loaded. So yes, the next 3-9 months will be tough, but RIM still has many things going for it, and several tough, but manageable hurdles to get over. I own RIM stock and I'm keeping my stock as long as there's no more talk about purchasing hockey teams - they need to focus right now.

moemoes38

The main problem with RIM is they are not competing enough with their competitors, blackberry phones are just as nice or nicer then a lot of other cell phones on the market the one thing the don't have and need is the support of applications I have experience this first hand and its killing them most people have no idea about there cell phones as far as memory or how fast there cpu all they care about is downloading apps rim don't have that and as long as they don't have that they will continue to fall behind

JPMorgan_

Numbers don't like, thinks are not looking very bright for the company, just a couple of thoughts, I read that someone posted "I can't get that BB5, BB6 phones are still being shipped since BB7 is available for everyone" - WRONG - In countries like Mexico, one of the fastest growing smartphone markets in the world, RIM only released the Bold 9900, and it's only available in a few Telcel carrier stores, not highlighted or anything, brings a lot of concern, and now some might say, emerging markets like Mexico can't pay for a premium smartphone, that's nonesense since there is a big market segment willing to pay, the big proof is the iPhone4S (available same day it was released in the US) and that for weeks there was a waiting list, since it sold out in a few hours. Also de Nokia N9 is available everywhere (Bold 9900 is not), LG Optimus 3D is also available everywhere through Telcel distributors (Bold 9900 is not), Sammsung Galaxy SII same thing, and the Motorola Razr. I can't understand why RIM doesn't give a damn about a market like this, and at the same time their competitors are growing big time. And I forgot to mention that the lastest Windows Phone is also available and highly supported by Telcel. I don't know where the problem really is, but 99.999% of smartphone user here doesn't event know the Bold 9900 was released and has never heard of BB7 OS. This makes me mad, you can't compete like this.

Second, what we all know, it all comes down to BBX Phones early next year, we'll see what happens. Hopefully RIM we'll make an espectacular comeback, maybe not... Please RIM, give some respect to the mexican smartphone market, since iPhone'sell here like hotcakes and your phones are not very popular anymore. Sad but true.

bruni

I have a 64gig Playbook and the 9930 but these are my last BB purchaches. The latest playbook update which knocked out my ability to use the wifi in my own home for more than 3 min with the PlayBook was the last straw. This company has been business school object lesson level bad since the 1st Storm came out. I left after that fiasco and came back but... fool me once, shame on you, fool me twice...

I'm liking what am hearing about the upcoming motorola razr-max with a bigger battery and 4.5" all HD screen with motocast, smart-actions and the superior call quality I enjoyed with my Moto Droid vs. my latest BBerry.

herrbremerhaven

Honestly I am not surprised they guided lower. This now establishes a consistent track record of the coCEOs missing targets they set. That's it for me with them; I am voting against both of them at the annual meeting. Just look what a CEO change is doing for HP. The current coCEOs built RiM, but they are not changing and growing with the market; they are obviously out of touch with reality.

I still like my 9650 and I am very likely to get a PlayBook at the discount price in the near future. However, like a few others commented, I have trouble recommending any current BlackBerry phones. I almost always need to explain why I have a 9650, instead of an Android phone or an iPhone; while it does function well, it's simply no longer a desirable phone.

dannyd86

I'd hate to be involved in the smart phone industry. So much heated competition. I'm nervous for RIM and I could care less about what phones best. I happen to like my blackberries and will give the bbx phone a shot. But if blackberries dissapeared today I'd be happy with an iphone just the same

STR8WESTCOAST

LOL. This is to funny. Weep on suckas. Maybe I missed it but I also read $50 million was lost during the outage. Main reason I jumped ship. You pay for what you get. I have an extra iPhone for sale...........just sold it. LMMFAO

ifarlow

Drive-by posters are so tiring.

hawaiiberry

Once again my Playbook's email bridge stopped working ... been like this from day one ... now I'm on the road and I'll have to wait to reload the Playbook software to get it working correctly again. So frustrating. If RIM is smart they will get the software gurus cracking big time. The Playbook hardware is great -- size, basic functionality, resolution ... but the software is soooooooo inadequate. On the phone side, stay with three or four basic designs and make the software awesome. Take a hint from those who are successful in the auto industry of all places ... consolidate and do it right! And focus on the SOFTWARE!

Darlaten

What I learned would be defined thus:

(i) The two CEO's are blatantly incompetent to lead a company in 2012 - they need to be fired now.

(ii) Anyone who thought that BB7 was going to be the "saving grace" of RIM was completely delusional. The writing was on the wall when BB7 was first announced with many people on these very forums saying that RIM was making a mistake in releasing an out-of-date and antiquated phone and OS that was years behind everything out on the market. Why this is a big surprised to anyone is completing astonishing.

(iii) Hopefully this will be enough of a kick in the pants to the investors to finally call for heads to roll at this company; it is time for new leadership. BBX will not sort this company out if it is still led by the people who screwed it up in the first place.

FOR_CE

Did they actually expect to compete with Apple and Android phones with specs considered to be a year behind. I think they also forgot many consumers are actually smarter then they think. I mean OS 7 was originally meant to be OS 6.1 which means these phones were actually just meant to be a stop gap before QNX (until they renamed it BBX and pushed it back till 3rd Q next yr). Then to add insult to injury in October every other major vendor announced new phones and BlackBerry announced nothing but smoke. So I'm not really sure how BlackBerry could have expected to compete this winter with literally nothing!

This is coming from me, a current BlackBerry user who's contract is up later this month but refuses to sign a 3-year contract (yes I live in Canada, the carriers up here are brutal) to an OS 6.1 device that was never meant to have access to major software upgrades to begin with. So, that pretty much leaves me with the competition to choose from and that Galaxy Nexus is looking pretty sweet right now.

italianstylzzz

This is expected news, 300 off each playbook.... Where do people think this would lead to? Its what happens in 2012 and release of o.s and new bb devices that will be the big thing. 2011 was a write off... Get over it. My o.s7 device is fine, I don't find it a pushover device. Works perfectly fine with my playbook. Iphones are crap.... The end

the_sleuth

Chris, great article. RIM is in dire straits with a few more quarters of pain. RIM is obviously suffering from the Osborne Effect.

http://en.wikipedia.org/wiki/Osborne_effect

Tax loss selling might be your next article, just a suggestion.

sinsin07

The article is clueless.

Ahh poor RIM. They came to a gunfight carrying a pocket knife. And the blade wasn't even sharp.

ifarlow

How is the article clueless? Can an article even be clueless? I would love to hear your explanation.

Laura Knotek

Kudos to Chris Umiastowski on this article. I am not an accountant or stockbroker, nor is my friend to whom I sent this article. However, you explained it in a way that folks who are not experts in that area are able to understand.

serversurfer

Unfortunately RIM is the best example for scuttle a former good product with explicite advantages.... This happens everywhere where geeks with no idea of market are heading a company. BBX will be to late and RIM will get the place in market where Lazaridis an Co. should belong to: into the cellar of meaninglessness.... A hostile takeover by a chinese group is just a question of time... I see lenovo-berry....

lorax1284

My blackberry is still my favorite device / form factor. I'm sure that there will always be lots of people who agree with me... But shareholders eager to maximize their value will drive the company in directions that will end up ruining the BB experience, I've no doubt about that

mavricxx

I love my PlayBook but, I can't help and think that if RIM would have released the tablet around this time of the year for the holidays and had focused all their efforts during that time on OS7 or BBX and had the new phones out then they would have been doing alot better not to mention we wouldn't have had a half baked PlayBook.

Darrweng

Goodluck to RIM on the journey ahead! it maybe sinking but we will never let you down!

bzeal11

this is really unfortunate.. the BBX phones need to put out good hardware that goes above the competition..

theadrock13

LOL. RIM is failing and all this spin can't save it.

ciscotechwannabe

Can somebody let Rimm know that they need to let the Playbook use apk files directly?
No, it's not easy to convert apk to bar, it's an epic disaster.

I would hate to see Rimm FAIL!!!