BlackBerry 7 sales stall, PlayBook sell-through remains sluggish

Research In Motion’s latest run of BlackBerry smartphones was reportedly well-received early on, with checks from a number of sources having indicated strong upgrade sales for several phone models. Demand has apparently been waning lately however, as strong competition from the likes of Android and Apple’s iPhone has drawn attention away from sleek new BlackBerry phones like the Bold 9900. Now, more bad news comes from a firm that has historically seen RIM’s glass as being half full while other investment banks were telling their clients to head for the hills. Read on for more.

In a note to investors Monday morning, RBC Capital Markets analyst Mike Abramsky suggested that sales of RIM’s latest devices are slowing. “Despite on-time BlackBerry 7 launches, checks are showing slowing domestic sell-through, plus impacts from recent service outages and PlayBook challenges (delayed software, sluggish sell-through),” Abramsky wrote. His checks mirror the findings of similar checks performed by Canaccord Genuity analyst Mike Walkley last week.

Abramsky found that sales of BlackBerry 7 handsets remain stronger internationally, where RIM’s devices have fared much better in recent quarters. The analyst says that RIM remains a top-selling vendor in some markets such as the United Kingdom and Indonesia, but its recent massive service outage may have hindered sell-through in key regions like France and Germany. The analyst also notes that Android has gained momentum in Latin America, which is traditionally a key market for RIM.

Unless BlackBerry phones fly off the shelves this coming Black Friday, Abramsky says that RIM may have trouble hitting its third-quarter EPS guidance of between $1.20 and $1.40. Wall Street’s EPS consensus sits at $1.22 for the quarter.

RBC is lowering its fiscal third-quarter revenue estimate to $5.3 billion from $5.4 billion, and it now sees RIM’s earnings coming in at $1.20 per share, down from $1.28. For the full fiscal year, Abramsky now estimates that RIM’s revenue will slide in at $19.8 billion, down from $20.1 billion, and his earnings projections were lowered as well to $4.68 per share. Finally, the analyst lowered his price target for RIM stock to $23 from an earlier target of $29.

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