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RIMM Looking Shaky

Posted on Tuesday, Sep 20th 2011

According to the IDC Worldwide Quarterly Media Tablet and e-Reader Tracker, media tablet shipments worldwide grew 90% sequentially and 300% over the year in the second quarter to 13.6 million units. IDC forecasts 62.5 million units to be shipped worldwide in the remaining half of the year compared with 53.5 million units projected earlier. The biggest market share is commanded by Apple’s iPad, which contributed 68.3% of the market share. Android-based media tablets contributed 26.8% of worldwide tablet shipments. Despite the launch of BlackBerry Playbook, Research in Motion (NASDAQ:RIMM) failed to break into this growing market. Most concerning, their smartphone business is showing signs of floundering.

RIMM’s Financials
RIMM’s quarterly results were also rather disappointing. Total revenues in the quarter fell 10% over the year to $4.17 billion compared with the market’s estimated of $4.52 billion. The company shipped 10.6 million BlackBerry smartphones last quarter and 200,000 BlackBerry Playbook tablets. The market was looking for Playbook shipments of 490,000 to 500,000.

Net income in the quarter of $0.63 was significantly short of previous year’s $1.46. Adjusted EPS of $0.80 also fell short of market’s projected earnings of $0.89 per share. Worse still, RIMM failed to generate any cash from operations in the last quarter.

For the current quarter, they are estimating revenues of $5.3 billion-$5.6 billion with EPS of $1.20-$1.40. For the year, EPS is expected to be $5.25-$6.00.

RIMM’s New BlackBerry 
RIMM continued to devote a lot of its energy to the smartphone market and recently launched BlackBerry 7. The new version of the phone was launched in most regions around the world, except for some markets in Latin America and Asia, where the launch is scheduled for the current quarter. Overall, the company launched the 7 with more than 90 carrier and distribution partners in 30 countries during the latter part of the quarter. In North America, the phone has received mixed reviews, with many claiming that despite its upgrades, the phone still lags behind the iPhone, especially in terms of the available apps.

RIM also announced the BlackBerry Music this quarter. BlackBerry Music is a social music-sharing platform that enables users to build a community-based music library from leading music companies, including Universal Music Group, Sony Music Entertainment, Warner Music Group and EMI, to share among their friends. The service will have more than 10 million songs available in its catalog.

RIMM’s stock is trading at $24.15 with a market capitalization of $12.58 billion. It was at a 52-week low of $21.60 in August 2011.

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you say that
“the phone has received mixed reviews, with many claiming that the phone still lags behind the iPhone”

It all depends what reviews you quote. There are probably 3:1 great:ok reviews, however, you chose to quote the 25%.
Even old declared BB “enemies” like engadget had to say that the new phones are great.

and which phone, BTW, for there are three?

iNonymous Wednesday, September 21, 2011 at 10:47 AM PT

The phones reviewed include Blackberry 7’s Bold 9930, and Torch 9850. Sure Endgaget claims that the phones are among the better ones that Blackberry has launched, but in the same vein they have also said ” join us all in crossing our fingers as we wait for the next release of BlackBerry OS, which hopefully will bring something truly different to the table.” http://www.forbes.com/sites/briancaulfield/2011/0… Even CNET reviews state that though the Bold 9930 is well made, “OS 7 isn’t really too different from OS 6 in terms of look and feel” http://www.forbes.com/sites/briancaulfield/2011/0… and is overpriced.

Sramana Mitra Wednesday, September 21, 2011 at 5:24 PM PT