Analysts: RIM poised for strong quarter

Research In Motion is expected to report strong financial results when it posts its fiscal fourth-quarter earnings next week, but some have concerns about the BlackBerry maker's long-term smartphone strategy.

The company is poised to see revenue jump 24 percent, from $3.46 billion to $4.3 billion, when it reports earnings March 31, according to MarketWatch. "Our qualitative discussions with carriers suggest that RIM is still the clear leader, with Android-based phones the platform with the most current momentum (albeit from a very low base)," Hapoalim Securities analyst Kevin Hunt wrote in a research note earlier this week.

The optimism about RIM is fairly widespread. Though RIM is expected to have taken a hit from sales of the Motorola Droid, analysts see the company benefiting from Palm's weakness in the market.

"We believe the strength in the quarter was once again broad-based," Tim Long, an analyst at BMO Capital Markets, wrote in a research note earlier this month. "International markets most likely drove growth again, with Latin America leading the way."

However, some analysts are worried that RIM may not have what it takes to compete in the cutthroat smartphone market, and that its lead in the enterprise market may slip as Apple, Nokia and other Android phones catch up. Research firm Canalys said earlier this month that North American smartphone leaders RIM and Apple will ship more phones this year, but Canalys forecast they will lose some market share due to increasing competition. The firm said RIM's market share will fall from 49 percent last year to around 43 percent this year.

RIM has taken steps to address critics--the company plans to launch a new WebKit-based browser in a bid to attract a wider audience to the BlackBerry platform, though it has not said when the browser will be available--but some remain concerned about the company's long-term position, especially in the consumer market.

"The breakthrough innovation of 10 years ago rarely makes the breakthrough innovation of today, and the company's current strategy is too centered on leveraging in today's changing environment what made Blackberry so strong in the past," Pierre Ferragu of Bernstein Research wrote in a March 16 research note. "Trying to apply the synchronization principles that made email so efficient to a larger range of experience is unlikely to deliver a better experience and has chances to fail."

For more:
- see this MarketWatch article

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