RIM issues low phone shipment warning for Q1 2011

RIM signaled deep trouble with its smartphone business Thursday night with lowered guidance for its spring quarter ending this May. It now expected its BlackBerry shipments to be at the "lower end" of the 13.5 million to 14.5 million it predicted March. Profit would be much lower at $1.30 to $1.37 per share instead of the expected $1.47 to $1.55 it mentioned just last month.

Most of the drop was coming from a shift away from high-end phones and towards budget phones like the Curve 3G. Shipments of the BlackBerry PlayBook are still on track, RIM said, though it didn't say what those predictions were.

Its notice was significant enough to trigger a temporary freeze in RIM trading and a crash of several percent in RIM's stock value immediately afterwards.

The warning was very rare for RIM, especially coming well before the end of the quarter, and virtually guaranteed the BlackBerry would lose phone market share. Its fellow North American rival Apple just shipped 18.65 million iPhones, an increase over a record holiday quarter, where the BlackBerry will have sunk from 14.9 million in its roughly equivalent season. RIM has been repeatedly arguing that it was in a safe position with increasing phone shipments but can no longer claim the advantage.

Most of the blows to RIM have come in North America, where it has rapidly bled share as Android and the iPhone have taken over.

By Electronista Staff