Research In Motion is said to be rushing its first QNX-powered smartphone to market in light of underwhelming BlackBerry 7 devices sales. In a note to investors on Friday, Jefferies & Company analyst Peter Misek suggested demand for RIM’s new smartphones is not meeting expectations. An earlier report indicated that sales to enterprise customers have been solid thus far, while consumer demand may be lacking. Misek’s checks indicate that sales of BackBerry 7 phones to carriers is “just okay,” while sales of older BlackBerry smartphones continues to decline. The analyst believes follow up orders from carriers will also fall short of expectations, and RIM’s quarterly earnings could take a hit as a result. Read on for more.
Misek lowered his rating on RIM to Underperform from Hold, and he now estimates that the vendor shipped 12 million BlackBerry smartphones in the second quarter. He projects revenue and EPS for the quarter to come in at $4.4 billion and $0.77 compared to the Street’s consensus of $4.47 billion and $0.87. In the third quarter, which will reflect sales of BlackBerry 7 smartphones, the analyst is forecasting revenue of $4.8 billion and earnings of $0.92 per share. Wall Street expects revenue to come in at $5.5 billion with earnings of $1.36 per share, and RBC Capital Markets analyst Mike Abramsky on Thursday noted that RIM could even beat the Street’s consensus.
The analyst also mirrored earlier reports in his note, suggesting that RIM may be rushing to get its first QNX smartphone out the door. “Based on our checks, we believe the phone is being rushed and features are being stripped,” Misek wrote. “Most importantly, the integration of BES/BIS email/calendar is proving difficult, and we think a QNX phone without these would be a disaster.”
Codenamed the BlackBerry Colt, BGR exclusively revealed preliminary details surrounding the first smartphone that will launch with RIM’s next-generation operating system based on QNX. At that time, we also stated that RIM is making several concessions in an effort to launch the device as soon as possible. We noted that RIM’s first QNX phone will likely ship without support for current versions of BlackBerry Enterprise Server, which provides businesses with RIM’s famous corporate email, calendar and other PIM services.
Though uncited, it is possible that Misek is basing his claims on this report, which has repeatedly been misinterpreted. Our source indicated that the BlackBerry Colt will launch without support for current versions of BES. Instead, RIM will release a new version of BES that will support both its QNX-based operating system as well as older versions of the BlackBerry platform.