updated 04:45 pm EST, Tue November 8, 2011
Barclays does not believe RIM on time with new OS
Barclays Capital analyst Jeff Kvaal on Tuesday cut his share price target for RIM by almost half from $40 to $23 after casting doubt on promises that its first phone based on BBX would ship around early 2012. He believed that the hardware had been quietly delayed based on the typical carrier certification process. As it usually takes half a year to get a phone fully approved, any phone would ship in late winter at best and more likely sometime in mid-year, Kvaal said.
He also pointed to "checks" in the distribution chain that reportedly backed his view, although it wasn't possible to verify the accuracy of the claims.
Kvaal's view of the company's future was mixed. Subscribers were a positive for RIM, with a 40 percent year-over-year spike to 70 million in total. International sales, including in the unusually loyal UK, were also helping shore up results. Regardless, the analyst saw RIM shipping fewer phones in its current fiscal year at 56.5 million instead of 60 million.
Estimates for the BlackBerry PlayBook were also cut in half from an already low number, down to one million. RIM officially shipped 700,000 PlayBooks in the tablet's first six months on sale and, even with significantly reduced shipments in its spring quarter, had to make numerous steep discounts to keep stock moving.
The Barclays researcher warned that RIM's problems could become more glaring if BBX and the repeatedly delayed PlayBook 2.0 didn't arrive quickly enough. RIM was strong in e-mail, but it was ceding ground to Apple's iPhone and Google's Android that could see them negate remaining advantages, Kvaal said. Apple has already eliminated most of the advantage of BlackBerry Messenger with iMessage, which replicates much of real-time, secure chat but isn't limited to smartphones or to one device like RIM's feature.