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< >

Thoughts from RIM's Q2 Financial Results Conference Call

RIM!
By Chris Umiastowski on 15 Sep 2011 11:49 pm EDT
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Tonight RIM posted Q2 financial results that disappointed investors enough to send the stock tumbling close to 20% in after-hours trading. Since I covered the stock as an analyst in the financial community dating back to 2000, Kevin asked me to share my perspective on the results with CrackBerry Nation. So here goes.

The Reported Numbers

Q2 revenue was $4.2 billion, which is at the low end of the guidance that RIM had provided on last quarter's conf call. Earnings, expressed as EPS (earnings per share), was $0.80 while Wall Street expected $0.87. Another miss.

Gross margin also came in a tad under the company's guidance of 39%. No big deal, but guidance for the upcoming quarter is what really bugs Wall Street. More on that in a bit.

I think the reported numbers were disappointing. RIM should have been better prepared to issue more conservative guidance after missing expectations for the last few quarters. Apple, for example, has a strong history of issuing very conservative earnings guidance and then beating expectations. I can't even begin to tell you how many large institutional investors have expressed their frustration on this.

But the real focus is on what's coming

Wall Street tends to pay more attention to forward-looking guidance than what happened last quarter. Makes sense, right? Focus on the future, not the past ...

So, RIM actually provided a pretty good revenue outlook. They expect $5.3 to $5.6 billion in revenue. Analysts expect the low end of that range. I think that most analysts don't realize just how high the wholesale prices are for BlackBerry 7 devices. Seeing "average selling price" (ASP) rise, should tell analysts that RIM has a way to compete effectively in the market. At least that's my opinion.

But revenue doesn't tell the whole story. If revenue beats expectations, shouldn't earnings be stronger too? RIM only expects to post between $1.20 and $1.40 in EPS next quarter. Wall Street expects $1.36. So if you are an analyst, you see a disconnect between revenue and earnings. Revenue is rising faster, which can only mean costs are also rising faster.

As it turns out, gross margin is falling. RIM expects margin to drop to 37% next quarter. This was a definite source of confusion among analysts and investors. In my opinion, RIM could have walked people through the issues in greater detail.

Here's what I think is happening. The Playbook is getting discounted because they just aren't seeing the sales they expected. RIM eats that discount entirely, hurting margins. Management did confirm on the call that BlackBerry device margins (ex-Playbook) are at least flat, if not up in Q3. That's a good sign.

Why is the stock taking such a beating

Wall Street is sick of seeing RIM over promise and under deliver. It really is that simple. Remember that RIM originally estimated it could earn over $7.50 in EPS this year. Now, only 6 months later, that figure has been revised lower to about $5.25. This kind of result breeds negativity.

Also remember that RIM stock had rallied from the low $20s (just prior to the BlackBerry 7 launches) to the low $30s prior to the earnings report. Wall Street was catching on to the idea that BlackBerry 7 is a hit among customers. There was a certain level of expectation that RIM would deliver very strong numbers, not weak numbers along with mediocre guidance for next quarter.

Full year 2012 earnings guidance tells an interesting story

RIM had established an EPS guidance range of $5.25 to $6.00 last quarter. This quarter they're saying they will hit the lower end of that range. Let's do some math on this.

In Q1 and Q2 so far, RIM has delivered a total of $2.13 in EPS. The forecast for Q3 adds another $1.30 (mid-point of guidance range). That adds up to $3.43. Unless my BlackBerry Calculator is broken, this means RIM has to achieve $1.82 in the final quarter of the year.

Just to be crystal clear about this, EPS of $1.82 would be a record quarter for the company. Kinda throws a monkey wrench into the "RIM is a dying company" argument, doesn't it? Last time I checked "dying" and "record earnings" don't go hand in hand.

But they have to actually deliver on this promise, and let's face it - their track record for delivering on guidance has been pretty brutal lately. That said, Q4 is the February-ended quarter and includes the massively important holiday season (but not Black Friday). RIM has always seen a pretty good uptick in sales and earnings during the February quarter.

For investors, this means you have to wait 13 weeks before RIM either re-confirms this guidance on its next conference call, or revises its estimate lower. Personally, with the stock back in the low 20s as of Friday morning (based on Thurday night's after hours prices), I'm more likely to buy stock than sell. But that's just me. Do your own research please! I've been wrong plenty of times before.

BlackBerry 7 strength is key

I think a big part of RIM's confidence in the final half of their fiscal year comes down to the strong customer response from BlackBerry 7. We knew things were going pretty well, but now we have some numbers from RIM to back it up.

"Sell through" is a term used to describe devices that are sold to end customers, as opposed to "sell in", which is devices that are sold into the channel (carriers, retailers). RIM disclosed that 35% of North American sell through came from BlackBerry 7 devices in the final week of Q2. That's a good sign. It means BB7 is ramping fast.

Here's another important set of sell through numbers: There were 13.4 million devices sold in Q2 versus 13.3 million in the prior quarter. Yes, that's an increase. Not exactly earth shattering growth, but not too shabby considering that BlackBerry 6 devices fell off faster than they had expected. What this tells me is that, again, BB7 is doing very well.

And the risks remain the same ...

Even if the BlackBerry 7 launch is the most incredible launch in RIM's history, it really doesn't prove that RIM will remain a long term player in the smartphone market. To prove this they need to make one more major transition over to QNX. As a shareholder, I'm optimistic,but not willing to close my eyes and hope for the best.

QNX devices will come out sometime in early 2012. For the record my bet is calendar Q2 (meaning April or later). So we'll be waiting a while. But the devices are not the only risk. RIM needs to deliver compelling apps, and higher quality developer tools.

I also think RIM needs to completely transform itself into a company that won't settle so far away from perfection. From BBM buddy list problems on upgrades to less-than-ideal user interfaces on app world ...RIM simply hasn't put enough effort into making its products flawless. Nobody is perfect, but they need to shoot for getting much closer.

But given the balance of risks to the business and the current valuation of the stock (which trades at under 5 times earnings as of tonight), I'm hanging in a while longer. If I'm not satisfied with the pace of progress then I'll be selling.

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

Follow @cumiastowski on twitter and ChrisUmiastowski.com.

120 comments

Juiceair

I can wait for QNX, I love my 9930. Here's hoping that RIM delivers again when the new phones are released.

maam

Me too! 9900 = best phone ever! I will not hesitate once the qnx comes out!

koool1

I will buy a QNX phone day 1. Bring it.

w0qj

I really hate to say it, but it would have been a lot better for everyone (customers, shareholders, RIM reputation) if it had launched BlackBerry OS7 (Bold 9900 et al) back in Feb/March 2011 before launching the PlayBook/QNX.

PlayBook is still considered a work in progress (where is the autocomplete?), with little support for QNX App platform, and had delayed the entire BlackBerry portfolio of Smart Phones, to the detriment of everyone (customers, shareholders, RIM reputation).

A management decision? You bet.

Kevin Michaluk

You don't have to hate to say that... I agree. I've brought it up lots of times with RIM people, and they still all say pushing the PlayBook till after the BB7 phones wouldn't have gotten them to market sooner (so much recertification, etc.).  Though somehow I don't totally believe that... you can only have one prioirty at once.. feels like PlayBook became priority and dropped the ball on phones for a bit. If that IS the case, could probably quantify it... a few billion dollar swing.

Kiddo2050

So here is the counter argument and I would be interested in your response. The QNX phone absolutely cannot fail, by this I don't means sales I mean the phone is an essential device a communication device that needs to be super reliable. QNX however is totally unproven as a consumer device OS. So how do you make the jump?

You put a device that is non-essential and non-core to the company in the hands of a couple hundred thousand consumers and let them play with it. Mess it up crash it etc. and you learn from the failures.

I would say that if QNX phones are a hit and the playbook doesn't even exist 10 years from now Mike L will tell you the playbook served its purpose in allowing RIM to test an unproven (to end consumers) OS before it went into a blackberry phone.

Kevin Michaluk

yeah, there's always the coulda woulda shoulda angle... don't disagree with you. just want to see the QNX phones be awesome... and have lots and lots of good apps.

Blackberry_boffin

I said it that the PB was an expensive experiment on the wrong device. On a device that was actually supposed to do well. RIM's problem is at the top. Why can't they bite ill news in the bud and issuing cauionary statements before announcing reults and why do they aim higher than they can hit? The biggest problem here is the one I've seen in German automakers. Mercedes has lost huge ground to BMW and AUDI recently because they have rode their existing customers excessively. One suspects they conduct mmarket research here on crackberry where we fanboys say yeah all is well and they dish more of the same. They need new customers, people who swear they never look at a RIM product and turn them around by finding out exactly what they like. That is how you grow your customer base. You do not release 7 or 8 devices which are basically watered down versions of each other. You don't enter a fierce fight with half baked devices which even yo fanboys are dissapointed with. Wake up!

JimmyBX

This is a FANTASTIC post. I am a Storm 2 user and here was my experience with the Storm 2, my visit to Verizon to play with the new Torch 9850 and my analysis of the market and where BlackBerry stands with OS 7.

The problem with BlackBerry is the OS is old. It doesn't have the capacity to handle the new technology. When people want apps, you give it to them. How can you compete when your competitor is able to load up their phones with 100 apps successfully, while your product gags and spits with 15? It's a recipe for failure.

People want better cameras on their phone.
People want better recording devices on their phone.
People want smoother running apps on their phone.
People want a phone that doesn't take minutes to reboot.
People want a phone that's run by those who think proactively.

CrackBerry is fantastic. The problem with the members of this site is their product has been excused for coming up short when placed next to droids or iPhones. This isn't "hating", but more reality from a BlackBerry user who doesn't take sides. The very few things BlackBerry does well (BBM and email) are accentuated profusely almost as much as all the negatives are ignored/made excuses for.

I picked up the Torch 9850 for Verizon. Awesome device, but I understand what the complaints are. What does this thing do better compared to a droid or iPhone? Email and BBM is about it. I downloaded/updated 4 major apps while in the store last night (Twitter, BBM, App World and Facebook) and then rebooted. The phone took over 3 minutes to start up again. That's completely unacceptable for a supposedly revamped OS. And I have been down this road already. The chief defense of BlackBerry fanatics is "security " when it comes to their phone, but that's an excuse conveniently placed to cover up the outdated OS. I don't do any banking on my smartphone. I don't have incriminating photos of Obama, nor do I have any gossip about Jay Z's lovechild in my emails where I will require National Security-like protection. That's not a big deal. What's IS a big deal is an OS that coughs, spits and lags when you put too many apps on it. If the start up time went to 3 minutes with ONLY 8 apps, what is this thing going to do when I begin downloading larger apps by the dozen? I don't need to try. I already know the answer from my previous OS 5 experience and the complaints from the OS 6 users. If you tell fellow BlackBerry users that OS 7 won't freeze or require rebooting, I say you're lying to yourself, to the BlackBerry users and to the rest of the readers of this site. This OS will behave similarly to previous ones, because they're cut from the same cloth.

The one major improvement is the browser. It finally caught up to everyone else. The choices on AppWorld are still lacking. The OS promise of not lagging was proven untrue. Much like the OS 5 and OS 6, the more you load up the OS with apps, the worse one's performance will be. All cellphones require a reboot here and there. BlackBerry OS requires them weekly and sometimes daily. And this is true across the board if you're loading up your device. There's a reason why BlackBerry only gives you 200 MB for apps. They know the OS can't handle it.

I was greatly disappointed in the product. All the videos of the Torch were neatly done in a clandestine way. The lack of apps and reluctance to truly test the OS were hidden from the BlackBerry client base. You were sold the phone via some basic run-thru on app empty devices. These tests are inconclusive and very misleading. I was duped into taking the Storm 2 without anticipating problems with the OS and then having to withstand 2 years of nonsense. BlackBerry doesn't get to dupe me again. I would wager this is the prevailing thought process of 99% of those who have dumped BlackBerry over the last 2 years. That's how I felt with the Storm 2's OS. That's also how people have felt with similar BlackBerry OS devices. The change to these other platforms is the result of 1 reason. A desire to use a better product. The facts are the facts. Droid and iPhone are overall better products. Where BlackBerry is dangling on to their users via BBM, email and the keypad, we're seeing the rest of the people leaving for greener pastures. Just because the Torch is a better phone than the Storm 2 doesn't mean it's in the ballpark as the iPhone4 or droid Bionic. It's delusional thinking. It's also backwards.

I sat there and asked myself the same question. Why do I want to be married to this phone for 2 years when it's barely keeping up with the current phones that keep getting stronger, better and faster? As soon as the iPhone 5 hits the market, it's wrap for BlackBerry. The QNX might be the real deal, but for the next 2 years, iPhone will get the chance to try me out as one of their own. And BlackBerry has no one to blame but themselves. For 2 years, they failed to deliver a product that can match what the competition has to offer. In the world of Smartphone competition, that's inexcusable. And that's why their stock prices continues to fall. That's why iPhones and droids are snatching customers left and right in America. I don't really care what the rest of the world is using, since that doesn't affect me directly. What I see is everyone around me jumping ship to iPhones or droids and saying it's the best move they ever made. The next question is, "What are you waiting for to make the jump?" My answer? "I'm waiting for the iPhone 5 to drop."

br14

Do you know much about operating systems?

Did you realise for example that Android is based on a Linux kernel?

Linux was actally created in 1991.

And Linux is a Unix like operating system. Unix was created in 1969.

Apple also uses Unix type OS.

So while there are issues with the BB OS theyre not really to do with age. More about graphics performance etc. which RIM addressed in OS7.

But theres no doubt that QNX, also Unix based, is a better option for the future.

No BB Drone

yeah , they showed that with the playbook, it really blows android honeycomb and IOS out of the water...........

NOT.

QNX will be your final and biggest disappointment BB DRONE

owen_magnetic

I somehow doubt that there's a lot of leftover code from 1969 in iOS. It is the mobile OS that is the yardstick for every other OS out there, who cares what its lineage is?

Additionally, if your point is that iOS isn't a modern operating system because it's based on Unix, it's worth noting that you've taken pains to point out that QNX is *also* based on Unix.

br14

iOS looks pretty. That's all. And more or less anyone can make software look pretty. Quite why they don't is another question. Apple has great UI design - doesn't mean it necessarily functions better.

Otherwise iOS is a lesser OS compared to QNX, and even compared to Android. Because Apple deliberately restricts OS capabilities to match their engineering restrictions. (Remember when you couldn't do two things at once on an iPhone).

And my point is that most OS have older code. Code and especially OS code, really doesn't age in the way implied in the original comments. Age doesn't matter. Capabilities do matter.

sungercan

A quick technical comment: QNX is NOT based on Linux/UNIX. I have taught QNX as an example OS for a real-time course in post-secondary education.

Very Short Answer: QNX maintains (mostly) POSIX compliance with that of UNIX/Linux. UNIX/Linux has a monolithic kernel while QNX is a micro-kernel that utilizes a "software bus" to extend the OS... (insert tech. blah, blah, blah here). If you choose to, you can make QNX look (emphasis on the "look") like Linux by developing with only the POSIX interfaces (which is built on top of QNX native "behaviors"). You can also choose to use QNX native interfaces and benefit from those behaviors (of which, naturally, there are some costs). Now insert a 15 week course on the rest of QNX. Homework will be checked weekly. There will be a closed-book term test and I will allow a "cheat sheet" on the final exam...

JimmyBX

See, this is the type of washing machine spin response I'm talking about with BlackBerry defenders. Who cares what year these operating systems were created? What does that have to do with the ability of droid and iPhone OS to function better than the BlackBerry OS?

So now we're going to hang on to what I do or don't know about operating systems? It's like entering a car race with a Ford Mustang while someone else is trying to compete with a POS Honda Accord. While I don't know about the engine blocks I do know the Honda Accord stands NO CHANCE 0-60, 0-80 and 0-100 vs the 'Stang. There's no difference with the smartphones.

Thanks for the MEANINGLESS history lesson, but the bottom line is the BlackBerry's OS is a POS next to the Droid and iPhone's OS. How's that?

And to correct you, sir, RIM did NOT address the problem, or did you not read what I posted about uploading apps on the Torch yesterday? Over three minutes loading up with 8 apps on the system. That, my friend, is a POS OS no matter how you spin it. Yeah, it's way better than the Storm...Woopty damned doo! Newsflash! There are better devices on the market. There's more reality.

br14

Yeah but the iPhone makes lousy toast.

Each device has key functions it does well. Whether you want those functions is up to you.

BlackBerry does security and generally communications better than anyone else. If that's what you want, buy a BlackBerry.

If you want to play games, browse the net, and are not too worried about security, buy an iPhone or Android (though the latest BB are pretty good at browsing).

But don't criticise a device when you shouldn't have bought the thing in the first place. (Because it doesn't do what you want).

No use buying a Dodge RAM Hemi and then whining because it uses more gas than a Honda Civic.

JimmyBX

But don't criticise a device when you shouldn't have bought the thing in the first place. (Because it doesn't do what you want).<------------- This is EXACTLY why BB is getting SMOKED by iPhone and Android. That's the prehistoric thinking which has enabled these companies to eat BB's lunch and dinner. The Storm 2 aka iPhone killer (SMH) tricked me. Shame on me. That experience won't happen again. That's why BB keeps losing people by the buckets. Imagine if Google and Apple thought the same way?

Kiddo2050

iOS can't multitask.... why why can't it multitask please tell me why. Whay can't I have a phone from Apple that can multitask. TELL ME WHY!!!!!!!!!!!!!!!!!!!!!!

Why does website after website after website gloss over this EPIC failure of iOS.

Blackberry_boffin

Save your breath JimmyBX. These are fanboys. The real question is why is RIM on the slide when everyone else is on the up? The average smartphone customer doesn't know (or care) how old or what code a device runs, they just put their money on something that works. The hardware and software simply needs to click and match the opposition. And everything will fall into place. Developers with come. Functionality should be seen to improve with a release.

scottae316

As usual people ignore every place but the US, Canada, and Western Europe. RIM own most of the developing world which is where the future is people, in terms of income and population. So while BB's do not do some of the things that iPhone and Android phones do, they do things that the others don't

Your analogy of boot time, really when was the last time you rebooted iPhone 4? At least 3 minutes and if I remember my EVO was a little faster, so by your reasoning iOS is worse than BB OS7. Really, thee whole premiss of your argument is BS. Android phones freeze and have OS problems, iOS not as much freezing. As for restarts/reboots, I have had not had to do so daily, every other day, or weekly on ANY of the OS 7 Blackberry's I owned, not even the OS 6 ones. Have you really owned a BlackBerry since the Storm?

And before you call me the ultimate die hard fanboy, I have only been using Blackberry's for a little over one year. I have owned and used iPhone, iPhone 3Gs and iPhone 4 along with a Palm Pre and an HTC EVO 4G. So, I am a recent Blackberry convert. What I see as the "problem" with BB OS's is that unlike iOS and Android which are totally icon driven, BB OS is a combination of Menus and icons heavy on the menu side. So instead of hitting an icon (after you finally find it), you have to read and search through menus.

Why is it that a Blackberry can serve so many peoples needs? If the main use of your smart phone is texting, email, and talking Blackberry is way out in front. They also have pretty good web browsing now to. If you are looking for gaming, then Blackberry is not your machine.

I would love more apps, but I can live without them as I do know. I used few daily on my iPhone 4 and the majority of those have Blackberry replacements, sorry. So if you cannot push an icon and have an app it is bad. BTW, I have more than 8 apps on my Blackberry's and few of them are under 1 MB, and my Berry still wrks fine.

herrbremerhaven

Bingo! Menu driven interface. That's why users complain the OS seems slow. That's also why new smartphone users think the iPhone is "easy to use". Maybe it is dumbing-down the interface, but remember that the average consumer is not tech savvy. Think of the home button on the iPhone and iPad as an "oh shit" button; when the user does not know what to do, they hit that and return home, like Dorothy in the Wizard of Oz.

As for the slowness after loading up apps, I get that on my Bold 9650, because I have a ton of apps loaded. About the only way I can get around it is to avoid launching some apps. I still like the form factor, and I do a ton of e-mail everyday, but I do wish the ticking clock didn't show up so often. Boot time is about 10 minutes on average here, worse than my heavily loaded MacBook Pro.

When I see the profit margins in the quarterly reports, I have to wonder at the stinginess of RiM. Throw some dual core or quad core processors into some of these new devices, then let them fly. Accept a little less profit to get out faster devices, and win more repeat customers. Anyone else notice that the subscriber base growth was near the sales figures, which seems to imply new users over repeat purchasers. Come on RiM, do something for us loyal customers.

jamesbyjr

@JimmyBX, how long does it take for an iPhone or an Android phone to load? Please provide that statistical data. On the other hand, please let us know where we can get this information. I have the Torch 9810, and it does not take that long for my phone to start-up because the phone comes with a 1.2GH processor, which is faster than most phones on the market, including the iPhone. The only phones that are faster are the ones with dual core processors such as the Motorola Droid phones...

News flash: There are a selection of devices on the market that consumers can chose from that meet their needs. What is better to you is not best for me. Your analogy with the Honda Accord is weak. Are you talking about racing, quality, reliability, value, resale value, etc. If you are talking about value, quality and reliability, then the Honda Accord wins.... I can get you the statistical data on the Ford Mustang and Honda Accord if you would like.

I had an iPhone, and was greatly disappointed. I am truly amazed how the iPhone has dominated the market because when it was launched it did not have basic features such as a video camera, and bluetooth that was fully functional. The reception has been a problem since day one. Since I have had my Torch, I have not had any problems with reception as I did with my iPhone. I have friends that have called me on their iPhones on Verizon network whose calls have dropped. Apple knows there are problems with reception on their phones.

You mentioned in a previous post that you do not care about security because you do not do any online banking, then why do you need a smart phone! Most people purchase smart phones to conduct personal business online. Are you only purchasing a smart phone to download applications? I have to say each to its own; however, I would not pay for a smart phone and a data plan to download applications. Personally, I am finding most applications are useless. Most applications that people are downloading are not being used. If there was an application on our phones like on Windows that alerts you when applications are not used, it would list over 50% of the applications on our phones that are not used. I have deleted over half the applications on my phone that I downloaded because I was not using them. I have only 10 application on my phone that are downloaded applications. I deleted applications because I felt that I wasted my time scrolling through nonessential applications.

I purchased Quicklaunch to eliminate icons on my phone so I could be more productive. I do not think that you can implement Quickluanch on the iPhone because the iPhone is not menu driven, which makes the iPhone one of the most unproductive phones on the market. A phone should create productivity. You should not have to search for applications or scroll through applications to locate the important ones. In addition, you should not have to connect your phone to the computer for updates... Therefore, I do not understand your logic when you say that Blackberry is antiquated and Apple is updated. I can give you a laundry list of antiquated things about the iPhone, and I bet you my Crackberry friends could do the same...

JimmyBX

Uh James, lemme break this down SLOWLY for you.

Mustang= rabbit.
Accord= turtle.
iOS = Mustang.
BB OS= Accord.

I don't think we can get any more clearer than that. You want to spin, go pour some Downy over yourself and jump into a washing machine.

I got DUPED into buying a touchscreen BlackBerry that was supposed to be an iPhone killer. I got owned instead for two years with a POS called the Storm 2. Since I was weened on the LG Dare when it came to texting/typing, I figured the crossover to the Storm 2 would be no problem for me. The original Storm's touchscreen wasn't good, so I passed and waited for the 2. What a sucker move that was. I wanted a phone I could use to text blast 500, 1000, 1500 people at one time. The BlackBerry served it's purpose. iPhone didn't have the capacity to do so back then. Now, you can buy an app and send unlimited texts on the iPhone.

Dude, I personally don't care what YOU think about the iPhone. The bottom line is their iOS is faster, more reliable, and completey more efficient than the 9850's OS 7. As for dropped calls on the iPhone, their issue is their carrier. AT & T is crappy service. That's why their calls drop.

NedKLee

Storm 9500 > Bold 9780 > PB 16GB

Wouldn't it be a dull, colourless world, if we all drove the same car, particularly 'stangs, (now there's a bucket of bolts for a starter)

In my house there are 5 (smug)Iphone/Pad/pod users, it goes something like "look Dad, can your BB do this?"

Me, I'm the little guppy swimming against the current,the thing is BB is doing EVERYTHING I need it to, so what is the problem?

One question but, why did Apple take sooooooo long to respond to the Diginotar thing,or in other words, how fast does a "stang go on contaminated fuel?

Btw, happy for you to buy Apple, I own some of their stock too.

NO_CARRIER

JimmyBX - I like your Ford Mustang vs Honda Accord analogy where the Mustang is the iPhone and the Blackberry is the Accord.

The Mustang is simply a faster device, can run circles around the Accord---it wins the race! Sure the Mustang will also need to visit the gas station more often to top-up on fuel (battery life), isn't as reliable (iPhone repairs, especially hardware issues), doesn't handle crashes as well, Mustang easier to break into---easily stolen (security, including jail breaking), will require replacing a lot sooner (lifespan of the device). Not to mention it has a higher running cost over the lifetime of the device. (data plans, contracts, apps, accessories). On a side note, Ford has issued a fix (to be done on a complaint basis) on their Mustangs in November 2009 for an issue with their antenna amplifier and bad FM radio reception. Don't know if it was only an issue if a passenger was hanging out the window and touching the antenna with two fingers though.

But for that short year after it's release---the Mustang is the winner of the 0-60 race, and prettier to look at.

Good job with the analogy Jimmy! Thanks for coming up with that.

browniet87

I had the 9850 in my hand seince the day it went on order. I have 50 application on my phone at the moment (and will add more when they are avalible). Guess how many times it has frozen on my?? Not once yet, it still only takes 3 minutes to start up just like when it was new and the os is still fluid with all those apps on it.

I'm sorry you only got to experiance the phone in the store for 20 minutes and made your opinons. This phone can keep up with any of my freinds phones ie iPhones, andriods and even one windows phone(ps they have tried and loved my new BB phone)!

The only complant i have with the phone in the week that i have had it is that DEVLOPERS are slow to update there apps to work on the new OS!

JimmyBX

Either you're loading up apps that are smaller than 100 KB or you're simply lying. Take a video of your 9850, show me all 50 of your fully loaded apps, pull the battery and prove to me your phone took ONLY 3 minutes to load up. Otherwise, you're FOS.

That's the ONLY way I will believe you.

browniet87

Well come on over to Denver CO and I will show you! I’m not going to take a bunch of screen shots for you. But here is a list of the apps I have on the phone.

Player for youtube
Tunein Radio Pro
Slacker
Dilbert
Gas Buddy
Poynt
AP Mobile
The Weather Channel
Wikitude
Brew World Free
Google Search
The Daily Star
Names and Numbers
QR Code Scanner Pro
Pocket Express
Yelp
Foursquare
Bing
WikiLeaks Free
MapQwest 4 Mobile
Google Maps
Waze
Bing Maps
Facebook
Twitter
Windows Live Messenger
Yahoo Messenger
Memory Booster
Battery Saver Free
One Touch Flashlight free
Google Sync
Aces Traffic Pack
Gold Scarab Deluxe
Bejeweled
Angry Farm
Pixelated
Forces Of War
Bubble Shooter

Blackberry apps/Preinstaled
BBM
BB Protect
BB Travel
BB Traffic
News
Podcasts
3D Rollercoaster Rush Jurassic 2
Brickbreaker
Word Mole
Uno
Documents To Go
VZ Navigator
Youtube (short cut)
49 and 1 preinstalled shortcut

Sorry about the shortcut so I was wrong there are 49 applications and I am still waiting for 14 apps to be updated so I can add them to my list and I’m not worried about it affecting performance! The restart time was 3min 15 sec sorry again for being off 15 whole seconds!

Haters got to hate! Lol

JimmyBX

Video is real simple. No screen shots required. You don't own a camera? You don't own another smartphone?

It's SO laughable seeing people LIE to defend their favorite TOY! Like little children. The video would take only as long as it would take you to zoom in on your screen and, remove the battery and record the time it takes to load up.

If you're so wllling to type out all your apps, back up your alleged claim. Yeah, I'm going to believe your phone rebooted in the same time the Torch @ Verizon did in the same amount of time minus 40 apps...PLEASE! Who are you fooling here? Prove me wrong. I'm a Storm 2 owner for the past 2 years. I don't need to hate, fool.

browniet87

Some of us have to work and yes i do have another phone and yes it is a BB but it is locked down by a IT policy and i didn't not have to type out the list because i already had the list of apps i wanted to DL on my phoine once i got it!

Thank you for proving me right about being a hater if i have the Storm 2 for two year i would be bitter and hatefull towards any new touch screen BB also.

But if you really want to see a video send me your email address and i will get one out to you sometime tonight or tomorrow.

ChrisInSD

you two are hilarious...

browniet87

Thank you I try! lol ;-)

JimmyBX

c74crewbx@aol.com....I want to see the entire thing load up. I want the video to start as you open up your 9850's app world showing all the apps, perform the pull and allow it to reload. I'm no hater. I tell it like it is. Hard for me to believe a phone with over 40 apps from App world will load up in the same time a phone with only 8 loads up in. That's BOOOOSHYT IMO.

browniet87

I dont lie and i have no reason to. Expecialy on here so here is the url to the video so everyone who does not belive me can see it. Sorry about the quality of the vedio this is the first video i have done on my playbook.

http://www.youtube.com/watch?v=1V0DJL_MHwA

Oh and sorry about the hater coment JimmyBX but i do not like being called a liar.

JimmyBX

OK...Sorry for calling you a liar, BUT, as evidenced by this video, yesterday's time was just over 3 minutes for you. Today, it was just over 3 and a half minutes. If we re-visit this OS with usage, the reboot time will be 4 minutes and so on and so forth. When I first had my Storm 2, it did the same thing. It was quick upon first install/reboot and with "x" apps. And as time went on, the OS got slower and slower and slower.

Is over 3 minutes acceptable. I'm sorry, but it's simply not. In 2 years, it will look even more horrific!

Kiddo2050

It's SO laughable seeing people LIE to defend their favorite TOY! Like little children.

Ah.. hate to break this to you but you are talking about yourself there...

JimmyBX

I own a Storm 2, you ape! How am I defending it???

brug0710

You should go to the Iphone forums and start posting there.
If you hate so much your BB brake your contract a buy u a new iphone. Go an have your candy, we will keep eating steak.

dantefc

50 apps with that ridiculous memory? Sorry but, I don't believe you

rlhammon

Thank you... you've said what I've said a few times.

I feel stuck with my Storm2. No ability to upgrade the OS, they don't support it. Same issue I had with the Storm. When I left AT&T to go to Verizon I left for the Storm. Not for BB, but a touchscreen device that worked. At that time I felt like the Storm was a better choice than the iPhone.

Storm2 comes, I upgrade because the Storm has issues... and the OS upgrade is supposed to fix them, and, I found out the Storm was designed from the start not to support the next OS upgrade. I suck it up, and do it... because there isn't an iPhone on Verizon at that time, and the Android devices weren't better.

Now... Storm3(Touch) comes out. Once again, not designed to handle the OS upgrade, so I'll have an orphaned phone again and have to pay for a new phone come two years. Now I can get an iPhone on Verizon, and now... Android has good phones.

I spent an hour last night at a Verizon store going over BB options, Android (Bionic), and considering iPhone / Windows phones. I can't see the reason to stick with the Torch (I want touchscreen) over any of the other phones. I stayed before mainly because I didn't want to switch providers, and I had only one choice in touchscreen devices.

I think what people miss is that BB has fallen behind the competition, and when there are choices... people evaluate them (at least I do). After using the Torch yesterday, and seeing the ugly buttons (don't have them on the Stomr2) all I could think about is that it would be taking a step backwards, or at best no step forward. I'm going to get the same phone again... same lack of OS upgrade path, and frankly I didn't see anything (except the browser) that was different. Yeah.. the screen layouts mimic other phones now, but performance wise I saw nothing that stood out.

The problem isn't that I'm a BB hater, but that I'm curious enough to search out for something different. Knowing that my BB experience has never been the holy grail... I'm still looking. That's the part RIM doesn't understand. They never provided that BB experience to a touchscreen phone, and we are all leaving for someone else who can.

As much as I don't care for Apple products, I'm considering the iPhone5. I'm also looking at a Droid Bionic. My comparable device from BB is at best 6 months away, and I don't know what it's going to be like. I'd rather take the known phone now, then hang onto my Storm2 and hope a QNX is better.

I believe it's time to change...

browniet87

I dont lie and i have no reason to. Expecialy on here so here is the url to the video so everyone who does not belive me can see it. Sorry about the quality of the vedio this is the first video i have done on my playbook.

http://www.youtube.com/watch?v=1V0DJL_MHwA

Oh and sorry about the hater coment JimmyBX but i do not like being called a liar.

AZagnit

I too am a Storm 2 user and this post says everything that I've been saying of late too.

I originally bought the S1 when it first came out and I'm among the small group of people who really enjoyed it, with the exception of the browser. When the phone grew too much for me to bear, I bought a new S2 off Craigslist and I couldn't be happier, again with the exception of the browser, but once I discovered Opera Mini, I was content.

I relegated my S1 to be a clock in my home entertainment center. I wiped it clean and simply installed the latest official software, completely clean, with nothing other than the factory original apps. And guess what? Every once in a while, the phone will catch my eye as it just reboots itself. IT ISN'T DOING ANYTHING OTHER THAN BEING A CLOCK! No network, no BIS. NOTHING! But it still gets stupid on the regular. Am I wrong in thinking that this shouldn't be happening?

I don't really know why I felt compelled to share this other than say that I share the frustration of a flawed operating system. Things have to change.

rtk777

Kevin, I have to agree. I think that RIM needs to realize that they always need to have their phones at the top of their priority list. After all, it's the phones that are their bread and butter. I hope that they never neglect or become complacent again. The Playbook is an extremely nice device. Although, it's still in its infancy, and has soo much room to grow and mature.

The bottom line is that we expect great things in the upcoming year from RIM. I have a feeling that we are finally seeing what "THE" sleeping dragon looks like when they awaken after a long slumber(and it's about time).

We just have to keep the faith, and pray that it's not misplaced.

I'm in their corner ! ! !

kojita

It was Chris, not Kevin...couldn't be it was wayyyy too pessimistic

Chris Umiastowski

I hope you guys don't feel I was way too pessimistic! I always try to present a balanced argument. After all, Wall Street is puking out the stock on these numbers, so I have to explain what's going on.

I think if the Street looks past sell in and examines sell through, the numbers are actually decent. Decent for a turnaround that is early on, that is.

ChrisInSD

Actually your comments are refreshing. Kevin's silly "BlackBerry still is #1!!!! Bold 9900 is most amazing thing since running water!" mantra in every post is a bit much. Love being a BlackBerry user and fan but concerned our group is turning into a strange bunch of zealots refusing to acknowledge reality. We can hope for the best without sticking our heads in the sand.

NedKLee

Storm 9500 > Bold 9780 > PB 16GB

Chris,I thought your analasis was very fair, balanced and most of all, informative and I look forward to more of your insights in the future.

I really am looking for an excuse to stick some money in RIMM and nothing in your post or the podcast has given me reason to change my mind, I reckon RIMM is on the way up.

BTW, before I get flamed for hyping up the stock, I have nothing to do with the stockbroking or banking industries, but I like to make my money work for me and I rely on people like you to allow me to make informed decisions, so Thank You and more power to your arm.

Paulzmbie

lol, I love your dragon part.

bbkrazy

Great Post Chris... RIM Will be just fine - QNX is coming :-)

Charlieo132

With the possibility of Having to defend the co CEO roles at the end of the year, guiding down later on will be a major issue for them. They are pretty much backed into a corner now. Im in the corner along with stock they have an ace up their sleeve to meet the earnings forecast.

Hope they have one hell of a holiday push. And some shock and awe at devcon.

It was a shitty qtr but was expecting it, the pps not s much.

Chris Umiastowski

Yup I totally agree, Charlieo. If they thought missing was possible they should have taken away the lower $5.25 number. But they don't like to admit any weakness, so they simply said "lower end". Risky if they don't have solid SOLID knowledge of carrier plans that are firm, not quasi-plans.

That said - take a look at most Feb quarters for RIM. As soon as they became a consumer-centric company (from a volume perspective), Q4 was smokin' hot. And with BB7 happening, potentially even more so this year.

Fingers crossed, but eyes open ...

Darlaten

Wallstreet arnt the only people tired of RIM promising much and delivering little. That probably should have been the tag line for the Playbook given what's happened to it.

The danger now, and I think quite frankly it's already too late, RIM's performance or lack thereof in terms of providing support to its devices has turned off all but the most loyal of supporters. Just read through any internet forums - granted not statistically significant nor representative by any stretch of the definition - but there is a growing hostility on the part of users against RIM.

You are seeing people who used to swear by RIM indicate that they are no longer considering any RIM product in the future. They feel betrayed, used, taken advantage of, lied to, mislead... and these are the polite words that are being said. Other individuals are downright hostile.These feelings will not bode well for future investment reports.

The true question over the next quarter is whether or not consumers, investors, wallstreet and others will continue to have faith in the company and its ability to turn itself around. Sadly, its hard not to get the impression of a ship thats started to sink.

jbs-horn

The expectation of QNX is going to dampen demand for the OS7 devices that RIM wants to sell by the boatload. One thing that is interesting about RIM's business model, though, is the revenue stream derived from subscriptions to BIS and BES that are collected from the carriers. The ability to earn continuing revenues from conservative customers who don't feel the need to have the latest and greatest is greatly underestimated by the media and most of the commenters here on CrackBerry. And RIM had a 40% increase in those subscriptions. No other smartphone manufacturer has those revenues. For an example of a business model based on content rather than hardware sales, watch the upcoming introduction of Amazon's tablet. They are working overtime to put the infrastructure in place to earn revenues from consumption of content. I think it will radically alter the market for Android apps on tablets.

Charlieo132

Well aware of BES and BIS revenue. Apple use to get a cut of the data plan although I'm not sure if they still do. BIS revenue from Virgin is hidden in the data plan now so it doesn't stick out like it use to.

br14

RIM announced a video store with 10,000 videos. It went almost unnoticed in the financial statements but I for one would be happy to see it.

Content is the answer. And Apple has left an open playing field because they're so obsessed with controlling the space.

Bold_until_Hybrid_Comes

Just drove by rim building 8 parking lot is full people are at work. don't worry guys rim isn't going anywhere.

experiment 626

Absolutely. the QNX smartphones should have come first before the PlayBook. All you have to do is look at HP to see how far selling tablets is going to get you. The OS 7 devices are good updated BBs that should have been out last year.Debatable that there's even a market for a BB tablet.

Jake Storm

Don't forget that the PlayBook received FIPS certification late in the year after most government budgets were already spoken for. I think they will sell a lot of units to government starting in the new fiscal year (April 2012).

br14

I've a Playbook and it's a great device. And will be even better when its finished :-)

It's debatable there's a market for any tablet. I do see the odd dork with an iPad on a plane but it's hardly a portable device.

QNX requires a fairly hefty processor and that meant a switch of chip manufacturer. Probably easier to create a tablet than a phone. More room for stuff on the circuit boards.

Agree about the OS7 devices though. They should have been out in the spring at the latest. My guess is the graphics stuff took a while to rewrite.

WillieLee

From a company that used to either meet or beat their guidance, this year has been an aberration. But I am worried that they didn't react quicker to the shifts in their carrier partners strategy. I think RIM has gotten too lax listening to their customers instead of delivering their own vision to the marketplace.

It was "interesting" that the sell-through numbers were ignored by the media in favour of the weakness. Seeing as shipments were so low, the channel inventory must be running very lean. If the sales of BlackBerry 7 devices are as strong as they say, there could be an upside if carriers start ordering more devices to refill inventory.

The costs are a worry but they do need to establish a presence in the public, especially given the general negativity put forth by the media. Especially the paid-for negative articles.

Chris Umiastowski

WillieLee - yeah this is HUGELY important in my view (the inventory angle). In fact that's what I consider to be my single biggest mistake in making a call on the quarter in my post (on my blog) Wednesday. I said we'd see street-beating results. Oops .. dead wrong. And the reason ... all that BlackBerry 6 inventory still has to work its way to zero. It will start in the USA but quickly be followed by RoW.

So let's see what they say on the December conf call. If BB7 takeup is still strong and inventory has bled down further, we should be back in business. At least until the QNX transition panic sets in. After all, RIM has to get a lot of things right now to re-establish trust with the investment community. It's gonna take a while.

jpassarella

Wish somebody had asked them why AT&T isn't carrying the new Bold 9900.

EFats

I think a couple of things not pointed out a lot:

RIM took a one time hit for cutting employees. They also spent a wad of cash buying up Nortel's patent portfolio (along with other partners). As I understand, that wasn't chump change. I saw numbers around $770million. That is also a one time cost, no?

Charlieo132

Employee cutting will Go into the 3rd qtr. The patents are a one time cost.

Chris Umiastowski

Yes, you're right about this but it's not as relevant as you think. Here's why:

1) Wall Street already ignores the restructuring. The EPS of $0.80 excludes it.
2) The patent acquisition is a capital cost. It doesn't hit earnings. It hits the balance sheet. It's like you going out and buying a new house ... doesn't affect your net income but affects your cash / debt situation.

reden82734

Another thing...where are the shares buy back? If they did not buy back shares in the low 20s does that mean its not cheap enough for them to buy their own stocks at that level?

br14

They used all their free cash to buy patents.

br14

The carriers are the key to the smartphone market and until we have some way of signal transmission outside of cell towers, they will continue to control the market.

Asian manufacturers of Android devices are dumping product on North American and European markets at low prices to carriers and the carriers love it. It's why Samsungs revenues are through the roof, but they're not clearing much profit on smartphones.

Androids are less expensive that BlackBerry in part because of lower licensing fees. Patent violation cases should level the playing field.

RIM could use a dynamic COO from an entrepreneurial company that understands the nature of an industry where product life can be as little as three months and where whether you can run "Angry Birds" is a key market differentiator.

And what about the cost reduction approach where 2000 people that middle management don't like just get let go? Bizarre.

Despite the above RIM is still making lots of money and is quite capable of making a come back.

No BB Drone

RIMPIRE STRIKES BACK

wahahahahahaha biggest joke ver. Although It is very tue indeed. Rim will go down by the force called andr-IOS 9=android & IOS). LUKE and HAN Solo. While Lazaridis is the emperor and baisili is Darth vader . The rimpire will fall, so that slogan is just as stupidly chosen as rim real marketing schemes.......... Shame on you BB drones

Kiddo2050

Hate to tell you this (no I don't really)but it's all over for Apple. Windows 8 will ship 350 million copies in it's first year. That's right one year. Hundreds of thousands of businesses considering the iPad are going to say, woops no thanks.

And Apps....350 million in the first year, there isn't a programmer on the face of the earth that won't program their App for Win8.

Ya you might say over for the PB too. So what it's a tiny part of RIM where as the stock market has been pinning Apple growth on the iPad. Wahahahahaha! It's over baby and now you know the real reason Steve Jobs stepped down.

And you are talking about iOS and Android.... silly boy.

gfr3

every stock exchange worldwide should be shut down!
money fanatic idiots dealing with money that nowhere exist and keep almost the whole word in a struggle, second time in short period now,sad that the people that should be in charge of it just won't admint that there is something totaly going wrong.
companies should feel more obliged to they're employess than to the investorts again.

rim still is in the win-zone, what a lot of companies can not accomplish.

Alphalucard

As a consumer i only see good things coming from all these pressures to RIM. think about it, now they must up their game to meet the expectation of the mass. Whether it is through change of CEOs or them getting their act together I dont really care. things can only get better for us either way.

However, the real problem is when average users like me and most of you guys starting to all think like big investors getting frustrated with stock price... really? whats in it for you if the company's stock goes up or down? Your devices just works. it doesnt get slower when the stock price goes down nor will it get faster vice versa.

Think of it the other way round: early 2010 stock price was good the company is doing well everyone's happy bla bla what do we get? complacency and everything leading to this point. Therefore as a CONSUMER i prefer thing to be rough for RIM so that they deliver. sure defending them will be tougher but thats not my job at the first place. i dont give a damn about wall street.

Chris Umiastowski

I like your angle. Very true that when competition smacks RIM in the head, they get back up and work very hard to improve. That's good for customers.

... unfortunately I'm still losing money on the stock these days :(

Pete6#WP

QNX is coming. QNX has been coming for a while now. The iPhone 5 is also coming and so are all the new WIndows Phone/Nokias. Windows 8 is also on the horizon. Android ain;t standing still either.

Now ther is absolutely nothing wrong with competion. It improves the breed and gives us choices. All of which is good.

QNX phones have taken far, far too long to come to market. If they are not truly great and fantastic then, much as I love RIM and BlackBerrys, then I am afraid that it will be all over for RIM.

I do not want to see RIM become RIP. Change within RIM is needed NOW!

dweese

I love my BB and my PB, but I'm up for a hardware upgrade early next year, and I'm looking at moving to the darkside (iPhone) which sucks because I'll get clowned at work and by my friends as I've been a long time BB supporter. Buy why did RIM even come out with OS7 phones. They should have skipped that and spend the time and money on QNX. So now we wait until April 2012? For a phone that most likely will have killer hardware and an OS but will be fresh on the market with no developer support, well Apple will be talking about the iPhone 6. As much as it pains be to say RIM is too little to late. The upside is they still control the biz phone market,,

Pete6#WP

Oh, OS7 was really just RIM trying to do marketing. OS7 is OS6.1 in reality. Tha's all there is to it.

The new clutch of phones are a combination of "because we can" and testing technology.

I have no idea what the delo to QNX really is but abive all, I suspect management at several levels within RIM. The just seem moribund to me. There's no sense of urgency let alone desperation.

Make no mistake, RIM is now drinking at the last chance saloon. One glitch with QNX or a clutch of bad reviews and they will be in real trouble.

nyc_rock

The true test will absolutely be Q4 for RIM. The rediculously high price of the Bold definately inflated RIM's gross margins. Just as the playbook started off strong so have OS7 devices. You can always count on RIM's die hard fan base and corporate users to buy at the newly released prices. With the GS2 variants, Iphone 5 and Mango WP7 devices all being released the competition for the other 95% of the market is going to be fierce. RIM will have to discount thier flagship to be competitive and this will have a negative impact on gross margins. If they dont get the QNX phones out before Q2 of 2012 RIM will have a very tough time coming back. The worst thing they could do, announce them this Holiday and then dont release them until next April/May. Even the failthful will be jumping ship if we get another OS7 like slow motion release. I would be selling now as the stock is going to go lower before the end of the year. Then buy back at the low if QNX is looking good.

dagerlach

Every two years, consumers will exchange their phones for something new and popular. Two phone types stand above the rest in capability, iPhone & Android based. When the RIM Blackberry interface is compared by the average user to the iPhone or Droid, it appears antiquated. OS7 is a step toward closing the gap and QNX is even closer, but they are still behind. RIM needs something big to lure customers away from Apple and Android systems. It has to be something so technically significant that people want to eat the cost of their current phone to have this new smart-phone. Until that time, they will continue to loose market share.

ODAAT

Thanks to Chris for a more informed article. It is hard to believe what is written in the comments and forums about the future of RIM as so many people either have an angle or are completely misinformed. From what I read of your article, RIM are still in the race but need to pull their finger out. I can live with that.

mapsonburt

Great article Chris... one of the best in recent memory. I agree with your observations and conclusions but was surprised that nobody on the analysts call about the prospects of RIM continuing these (impressive) sell rates of BB7 in the face of an impressive QNX preview at DevCon. I'm concerned that people (like me) will see the device and conclude they can hold on to their existing BB until next year -essentially "freezing" the BB7 market.

I am a proud PlayBook owner but its now very clear how little that device actually means to RIM's revenue (and how much it can negatively impact its earnings). They sold 200K PlayBooks against something like 11 M BlackBerry phones - even assuming RIM gets double for a PlayBook what they get for an average BlackBerry - not a very safe assumption due to the fact that BB phones drag through BIS/BES revenue and PlayBooks don't - yet. Its importance now to RIM is as a testbed for the new QNX phones. Pissing off 200k customers against the 14M new BB onesnis a no contest.

This whole saga is reminding me of IBM's ill-fated OS/2 adventure. They had by far the best OS but couldn't come close to Windows because they had no idea how to sell through the channels to end consumers. They were International BUSINESS Machines after all - they forgot that for a while - and once their newly (externally) hired CEO refocused the company on that, their fortunes improved dramatically. RIM is in a tough spot because their market is changing... Apple and Google have reintroduced "cool" into the devices and employees are pushing for the capabilities of running THEIR choice of device (after many companies forced employees to buy their own phones).

I think RIM is doing some of the right things.... making applications that make things so much easier to do productive WORK on the BlackBerry (BB Travel, BB Protect, BB Conference, BB Maps, etc) while ensuring the major competitive applications run on the Platform. If they can't get That done, they are dead. The next 2 quarters will tell the tale. I'm not buying more stock.

dweese

IPhone 5 is due out next month it looks like. And none of the insiders are saying anything about LTE, Apple is most likely waiting until next year once more LTE comes online to sell with the iPhone6. That's RIM's saving right there. RIM says QNX phones around April of 2012 than they need to have their first QNX phone LTE powered as well, get a LTE PB2 out at the same time and for once Apple would be playing catch up to RIM for a change. RIM is in the right position to do this. LTE will be have been online for a few months and more people will be asking about it. If they just give us a 3G QNX phone in the spring that will be their end.

jbliv63

Excellent analysis, thanks for sharing.

sirfly2fly

i have a couple of thoughts on mind..i like how we will find out the features of the QNX smartphones next month when the "iPhone 5" drops so we can see wat the competition is. Also they made a statement regarding all the features we want on release? well what do we want?

lnichols

Showing off the QNX phones at DevCon is a huge mistake IMHO. I think it will hurt OS7 sales. They should have just kept their mouth shut and shown off QNX phones at CES in January, which is much closer to when the phone may be available. Now someone who may have bought an OS7 device for someone around the holidays may say "That QNX phone shown at DevCon looked awesome, I'll wait for it". Of course who knows when RIM will deliver a QNX phone because no matter when they say it will be ready we know that they have no credibility to hit a date, or even a season for that matter!

dumbo1975

I agree with JimmyBX. Note: I am also BB user and keep wishing Blackberry will be better. Apparently not. The OS is so old, not intuitive, boring. The only thing why BB is alive is probably BBM, but surely iPhone 5 with their own iChat or whatever they call - it's sure going to kill BB/BBM on the spot. In addition, the phone itself! - it has a boring look and it keeps bragging about the best keyboard ever etc etc. For those of you defending BB, please ask yourself, had the price been the same, would you choose BB or iPhone 4/5??? Please be honest, me: I'll take iPhone 5.

sirfly2fly

Yes. I think all the features on my BB are great..i can integrate everything into my contacts(bbm,twitter,FB,etc.) auto correct best i seen on any phone. iChat wont touch BBM, not w/ the new social platform, that caro app is a good example started about 3wks ago and already over 16k players. Camera better than iPhone 4, world phone..

TomCanuck

I'll chose a physical keyboard over touchscreen anyday when it comes to a "communication first" device. And I actually like the BB OS. :) and for the record, the 9900's keyboard IS the best

TomCanuck

Less than ideal App World UI? You can say that again, App World 3 is blah looking, and ssssllllooowww ..

Dark_Halmut

The PlayBook may be a work in progress to power users, but without another marketing campaign and progress will be mostly fruitless. Rim fans here won't agree but, the public has pretty much written off the Playbook right along with the other Android tables that just weren't quite there.

Dark_Halmut

The PlayBook may be a work in progress to power users, but without another marketing campaign and progress will be mostly fruitless. Rim fans here won't agree but, the public has pretty much written off the Playbook right along with the other Android tables that just weren't quite there.

rightmuch

Haven't been on this site for a while, but I'm always impressed with the absolute devotion of BB users. I was one of them for 5 years. Then I got an iPhone 6 months ago. My experience is like most former crackberry devotees. There is just flat no comparison. With the management decisions recounted in this thread, I just don't see much of future for RIM unless Google buys it.

kcdist

Call me stupid, however, I bought a whack of RIMM today.

I actually thought the results were.....not half bad.

Key takeaways for me were:

Sell through of 13.7 Million. To me, sell through is the key metric. Shipped numbers, although interesting, do not tell the true story. I understand RIMM books revenue at the time of shipping, but the health of the company relies on sell through. It appears the channels were somewhat bloated, and I wondered how they would deal with all the old OS6 and earlier stock.....it appears they were able to sell much of it.

70 Million Subscribers. A 40% gain over one year ago. These are the numbers of a dying company? This is a fantastic number because, unlike the competition, RIMM makes money each and every month on each and every subscriber...........which leads me to the next positive...

Record breaking Service Revenue of over One Billion for the quarter. This is very telling number. My favourite saying in business is that you never sell a product once - meaning it is critical that you sell, and then also generate recurring revenue. RIMM seems to be doing this in spades, especially compared to the competition.

NO BUY BACK.! ...Likely a strategic move on RIMM's part. They knew this quarter would be a sh!t show based on the transistion to OS7, and they likely had a good idea the share price would be hammered today. The next few weeks seems to be a much better time to re-purchase shares in the low 20's or high teens.

Forcast. This was the major issue for me. During the CC, and I haven't seen it mentioned elsewhere, there was a comment made by RIMM about the large back order. To me, that infers that they are producing at 100% capacity. Also, the fact that RIMM didn't lower the 2012 annual EPS forcast. of $5.25 tells me they know, about one month after launch, that they have a good thing going with OS7 phones.

Though not a huge generator at this time, I love the idea of the video store and the music project.

I work in Mexico, and BB is king here. Few people I deal with even know what RIMM is and I would be laughed at if I told them that the BB brand is in 'trouble'. BBM is THE way to keep in touch among the upper lower class on up. I have no idea what the smart phone breakdown here is, but I would guess that BB is at 70%. This is the same in most Latin Countries....

Unfortunately for investors, the analyst focus on the U.S. of A........However, so long as International Sales stay strong - and I don't see how they cannot, at least over the next two years - RIMM will thrive.

That said, there are some major challenges. Marketing, or lack thereof, is huge. In a major department store in Mexico City they have an iPad area. Six iPads on display, and the only thing missing is flashing neon. The Playbook is also sold, however the only sign of it is a box locked in a glass display. How can they compete? Personally, I have been responsible for at least five Playbook sales.....however, the awareness is dismall that they even exist.

If the OS7 launch was a dud, I would be concerned. However, it seems thata the OS7 launch is a smashing success. So long as RIMM has learned their lessons, and can transition seemlessly into the QNX phones, I see a bright future. My only regret is that I don't have even more free cash to buy up shares at this price.

Final thought. Jim Basille. Even though I liked your message, PLEASE PLEASE PLEASE go to a finishing school for public speaking (or even just for reading). You are painful to have to listen to. Also, spare us the friggin adjectives. My eyeballs were hurting from rolling into the back of my head after hearing, for the 1000th time....."iconic" keyboard, 'amazing' Liquid Graphics. Stick to the facts. The public will decide if it's amazing or not.

br14

Great analysis. Mind I would say that because I agree with just about everything you said!

dumbo1975

Bla bla bla... QNX is still 2012. By then, Android and iOS are going to release their better OS. And again, BB will be slaughtered. I know you all want iPhone LOL X-D

1magine

RIM has been trying to secure QNX to the BES infrastructure. It has been unsuccessful. They have tried various upgrades and failed. They have begun writing new BES and BIS code from and have been unsuccessful. They are now writing entirely from scratch and realize that the interaction of their software and engineering groups is completely broken. Internally RIM is far more of a mess than any analyst has dared to say. Managament is entirely dysfunctional all the way down to group leaders. FIxes are coming to be certain, but the delays and poor choices from marketing, consumer research and timelines are because the hard choices aren't being made.

Several months since release, and Playbook is still unfinished. OS7 for all its sparkle, runs on a Java code that most professionals shy away or flat out refuse to code for. So you won't see the Amazon cloud, MLB live video, Angry Birds, Skyfire, Optimum or Dirrect TV video. The collection of OS7 phones is decent, but far overpriced for most, except the BES crowd. And the disjointed choices on the hardware is nearly unfathomable. The 9900 9930 is a great device, but why the camera choice? Why wasn't WIFI sharing worked out prior to release? And the 9850/60? A plastic body and screen with raised plastic buttons and no NFC? Really? What was that intended to compete with? Why not use the glass and metal signature of the 9900 series on the 9850/9860?

Carriers are not looking to carry these devices and BES servers are slowly and quietly going dark. (see latest BES licensing figures).

IT departments worldwide are paying attention, because CEOs and Boards world wide are begining to ask, "What happens to our investment in servers and handhelds if RIM declares chapter 11?" and "What should we be doing now to protect ourselves?"

kcdist

Far too many inaccuracies, conjecture and personal subjective opinion to even begin to respond.

Okay....just a few.

None of the actual users of the 9850/60 are actually complaining about the 'plastic'. That's left up to the tech writers and those that wish to 'pile on'. I would prefer the best material possible, and with the amount of cracked screens I have seen in my travels, plastic is the way to go.

You should know that pricing for the devices is set by the carriers. That's why AT&T is selling (my favourite) the 9810 for $50. Deals can be had at Wal-Mart and other third party retailers. The Carriers are going to sell at a price that they believe is perfect equilibrium....High enough to maximize profit, but not too high to drive away business.

'Carriers are not looking to carry these devices'....Fantasy on your part or outright lie? Not sure which, however, carrier interest is off the charts by all checks.

'IT departments worldwide.....' Just pulled that statement out of your arse? 40% subscription gain in the past year. 'nuff said.

dog5

I didn't see this posted, but this was the article in the Wall St Journal today. Not good.

http://blogs.wsj.com/marketbeat/2011/09/16/research-in-motion-this-is-wh...

Maestrodog

I salute everyone on here who tried to tell this story the last year or two and were labeled with the silly nouveau cliche of "hater" by the silliest of fanboys this side of Snapple--who even in recent weeks were posting the most sad of pollyanna "hey, the stock's up, Rimpire strikes back, tee hee..." posts.

We were in the fact the LOVERS, offering tough love to a company that means as much or more to us as those who sing it's praises blindly.

That's not hate. That's business.

We were offering all the right ideas and free focus group information of which a firm could dream.

RIM missed that memo too.

jr4941

Very good article. Thanks for the read. It's always interesting to see the market reaction to these calls. RIM should be more conservative in their estimates and then blow them away. I think they are also doing a much better job of keeping new products under wraps. Talking about the PB only raised expectations and disappointed many reviewers. Reviewers, as awful as many of them are, are still extremely important to a product's success.

I hope that they keep as much of the QNX phones under-wraps until they are just about to be released. Show it closer to the final build so that people will get excited. Hopefully we'll see a shake-up and get some good marketing going on as well.

lorax1284

I posted this on the pcmag.com post about RIMM's quarterly report... but it's pertinent here, so here it is:

RE: RIM placing all bets on success of BlackBerry 7
Well, since the devices launched in mid Q3, which still has 2 weeks to go (assuming Q4 starts October 1st) and the results being reported are Q2, which was just weeks prior to the expected launch of the new devices that were being eagerly anticipated, it makes sense that Q2 would have been relatively weak, as potential customers (who would possibly have to sign multi-year contracts to get a device subsidy from their carrier) would wait.

So, a dismal Q2 is to be expected but to suggest that Q3 will be equally dismal, discounting the launch of many eagerly-awaited new devices in Q3 seems premature: IF Q3 IS DISMAL, then even this ardent BlackBerry supporter will have to admit CRUSHING defeat, not just a downturn.

Unfortunately, market perception plays a lot into this, and my new Torch 9810 is a great device, and the PlayBook is a GREAT companion device FOR BLACKBERRY DEVICES, and when the 2.0 OS is released, it will be a much better companion device for OTHER devices, but I'll call trying to sell the PlayBook as a general-purpose device rather than as the ultimate BlackBerry Handheld (phone) companion tablet was a huge "have our cake and eat it too" marketing error (which I think caused their marketing head to roll, continuing with the French Revolution metaphor).

I expect Q3 and Q4 to be pretty good, in fact, and that when the QNX-based handhelds do launch, there will be pent-up demand there, and the established apps / developer relationships on the QNX platform from the (not quite as sucessful as the technology merits) PlayBook.

So, RIMs strategy SEEMS to be a movement to a "single OS on both tablets and handhelds", which is exactly what Android and iOS are doing... whether or not QNX is a viable OS, whether or not the marketplace will support THREE mobile device OSes (well, don't forget Windows Mobile 7 on handhelds and Windows 8 on tablets) is the question: if not, if QNX isn't a viable platform in the marketplace (the jury's still out on that) then RIMs business model and strategy will have to make a 87 degree turn, possibly to something Android|WinMo + (their global server infrastructure) + (carrier relationships) + (best-of-breed security) + (proprietary apps).

I hope it doesn't come to that.

falconeight

Die rim die......and take crack berry with you.

jkrist

Hey JimmyBX,
Nicely done. I have had my fair share of pain with RIM in general and Playbook in particular (which by the way, run on QNX which is supposedly gonna be the saviour for RIM).

I spent an incredible time of amount at my Organization bringing in RIM trainers, trying to develop corporate apps, an in general trying to sell RIM as an Enterprise platform. At each step RIM either created problems or had problems with their approach or with their Platform:

1) I needed to create multiple logins to simply get the development work going. This was simply a pain the in the behind. Can you imagine a large team of developers all requiring multiple logins into the RIM world just to get their work started. Additionally, while working with Eclipse as a development IDE there were numerous issues updating and downloading DEV libraries. On top of this the only way you could contact RIM support was via your Account Manager, which simply sucks!Whatever happened to support@rim.com?

2) I was told I had to re-write apps developed for BB6 to run on the Playbook. Who has the time for that?

3) There was no Email client on the Playbook. We were told it will be released later (RIM now has habit of saying that: right now we are being told to wait until 2012 for QNX phones. If that is the case then why release BB7?)

I can go on and on but RIM is simply gonna go down and bite the dust. As I write their shares have fallen 20% and stand at $23 and change.
There is a reason why the market is reacting like the way it has reacted lately and even if all the BB enthusiasts (I was one of them not too long ago) still are in denial then , well, no one can help them :-(

Just my 2 cents!

C_McD

Apple only has one phone at a time... focus. I think variety is the spice of life, but keeping it simple is much easier to manage from an engineering/marketing/technology viewpoint.

tmw624

I have been waiting to get the new Bold from Sprint and it's been out of stock since it came out. Maybe sales would be better if production was better!

afrikanac

READ WHAT OTHER PEOPLE HAVE TO SAY ABOUT RIM TODAY!

www.nytimes.com/2011/09/16/technology/research-in-motion-posts-disappoin...

Its a shame the company has fallen so low and even now instead of admitting that they are going in the wrong direction, waking up and trying to not sink the ship they still try and explain why there profits are down 58.7 %. If i was a shareholder I would want resignations first thing tomorrow morning....

Joelist

I was a BBer (Storm 2 and still have a bold from work). I finally went Android (currently Thunderbolt) because the unreliability and slowness of the phone drove me crazy. For example the battery pulls (evidence of memory leaks in the OS). I know other BB users and the running joke amongst them is "did you pull your battery today"?

The reality is that RIM is in trouble. Not dead or necessarily doomed but in trouble. The main thing they have banked on with corporate customers has been security. They even felt safe jacking the already exorbitant BES fees because of this.

The problem is that while iOS still hasn't caught up on security, Android has an app named touchdown which definitely does catch the security up (all Touchdown stuff is isolated from the main OS and tightly secure). That removes the main objection to enterprise deployment of Android. In addition, WP7 already had excellent security (fully sandboxed among other things) and Mango enhances this.

These factors will make using ActiveSync (100% free) more attractive than paying for BES.

If RIM wants to successfully fight this they have to build a more reliable OS (battery pulls have to either end or be drastically reduced). It also needs to be faster running and have a bigger app base (the ability to run Android apps as in the PlayBook could help here). This is because ultimately they are going to have to rely on phone revenue as BES pricing will have to be either drastically cut or eliminated.

westtwelve

JimmyBX

Dude I totally agree with ALL your comments. The BB fanboys here need to chill and realise that we also use BB's. Some users have good experiences and some don’t. Everyone is entitled to their opinions negative or positive. However these fanboys need to stop being in denial and defend an ageing OS. Yeh WOW!! Blackberry OS 7 has launched, but it is so 2009. RIM have lost their edge and have fallen behind, don’t even try to deny it fanboys its fairly obvious everyone else outside of crackberry agrees. RIM for far too long have relied on BBM and email. If it wasn’t for the fact that RIM charge for BIS & BES and the heavy government and official use RIM would be going down faster than they already are. Face the facts fanboys.

Why don’t you fanboys read this article and see why those 2 RIMjob CEO's need to go.

http://www.bgr.com/2011/07/13/rims-inside-story-an-exclusive-look-at-the...

RIM are taking steps to address many issues with BB's, patience is a virtue

Kiddo2050

I've read a lot of these comments as sickening as they might be, but really none of them impacts the bottom line for me.

1) Tons of people I know have blackberrys including my familty members who live in a different country and I just love BBM.
2) I love typing on the 9930, it's fast and it works.
3) I had an iPhone and I hated it. Really there was a period there of about a year where I owned every product Apple made and while they were beautiful none of them really worked. The phone didn't connect when I went abroad, and I had to shut the data off or risk mortgaging my house.The computers didn't run all the software I needed and yes I even got sick of the apps. They crashed a lot.The battewry life, oh God, if you think the 9930 is bad you simply cannot go for the iPhone.

So what am I to do, Go to Android give up BBM. I've looked at Android phones and they just don't appeal to me. Crazy icon lay-outs, crazy huge size.

At the end of the day I realize that while the Blackberry has tons of short comings including annoying lags (much less on the 9930) and slow reboot. I still think it's the best phone for me.

I get the feeling that most of the people on here bitching at RIM really haven't tried living with another phone. I did and hated it.

Am I optimistic about the Playbook? No. Am I optimistic about the QNX phones? No.

But at the end of the day no matter what people say, I like my 9930 and I'm keeping it.

Robert22

I like Blackberries as well, but look at the Motorola Droid Pro+ device. Simply perfect. The only better things on the 9900 are the keyboard and the BBM. I hate the camera on the 9900 and the weak battery.

Kiddo2050

You know there really isn't anything wrong with the 9930. I think they only kinda fail for RIM on that was they didn't make the things you use all the time Email, Calendar, contacts... prettier. Why they miss stuff like that I just don't know. In other devices they put out I would grant them that graphics was hard, but clearly on the 9930 it isn't yet they stick to dull flat boring email and calendar interfaces. Even the UI is good one the phone but not the apps you use most.

The one thing that's good about Apple stuff is that it looks nice, that's pretty much it.

Looking at the playbook email etc. it's a little better but I really hope the guys at TAT make the new phone look nice. For most people that 60% of what they want.

BBPandy

@ Chris Umiastowski
Who do you use to trade?
e*trade looks good for an American, unfortunately I'm in Canada. I purchased some RIMM stock when it was @21.90 so despite having taken a hit in the last 24 hours I'm still in the green (barely) I would like to buy some more stock but I really don't want to pay the huge brokerage fees leveled against people who have <100,000. My stock portfolio is in the hundreds not the millions.

Any suggestions?

Surly Kevin didn't pay $20 - $65 CAD in fees for his 1 RIMM Stock?.........
(my fees)
https://www.scotiaitrade.com/pages/home/fees1.shtml

Chris Umiastowski

I pay $9.99 via TD Waterhouse. I'm Canadian too. Yeah, I think you need an account value beyond some threshold, but I've got no idea what that threshold is.

My advice is make sure you're investing in stocks for the long term so you are not actively trading. That's the only way you can keep your commissions down to a very low level.

BBPandy

Looking at TD Waterhouse fees
http://www.tdwaterhouse.ca/products-services/investing/discount-brokerag...
Looks like their threshold is $50,000 or it's $29.99 That's more then Scotia Bank's :(.....Though Their BlackBerry App looks interesting. iTrade (Scotia Bank) doesn't have mobile Apps. I have to use "Wikinvest Portfolio" to look at my stocks.

glassofpinot

Chris: Thanks for your take - thought it was well balanced. You were polite/professional in sticking to the facts and avoided talking about the people.
In the end, people have to perform or whoever really controls will make a change. Not basedon opinion, personality or rants but on the need to get performance.

glassofpinot

Kevin: Thanks for putting this on.

Robert22

The 9900 is not only a hardware upgrade, but a downgrade as well. Why the bad camera without autofocus and why the weak battery?? Why is RIM doing such stupid steps?? The 9900 should be a new flag ship, but it isnt because of this!