Research In Motion (NASDAQ:RIMM) said it will not release its first BlackBerry 10 smartphones running on QNX software until the "latter part" of 2012 because the dual-core LTE chipset it intends to use for the platform will not be available until mid-2012. Previously, RIM had said it expected QNX-based smartphones sometime in early 2012.
The news came as RIM posted weak fiscal third-quarter results that were in line with its own lowered expectations. However, the company's outlook for a weak fourth quarter--when BlackBerry maker RIM and other handset makers typically record higher volumes--was particularly troubling to investors, who sent RIM's shares down more than 5 percent in after-hours trading. (Investors have been pressuring RIM on its management structure; in response, RIM co-CEOs Jim Balsillie and Mike Lazaridis agreed to cut their salaries to $1.)
Analysts greeted the delay in the launch of BlackBerry 10 smartphones with a mixture of astonishment and resignation. "This could be game over for the BlackBerry franchise," analysts at Canadian brokerage firm National Bank Financial wrote in a note to clients, according to Reuters.
RIM reported net income of $265 million, down from $911 million in the year-ago period. RIM had said earlier this month that it would book a $485 million pre-tax charge related to unsold BlackBerry PlayBook tablet inventory. RIM's revenue for the quarter clocked in at $5.2 billion, down 6 percent year-over-year from $5.5 billion.
RIM shipped 14.1 million BlackBerry smartphones during the period, in line with previous guidance of between 13.5-14.5 million, and said sell-through was 13 million units in the quarter. The company shipped 150,000 PlayBooks in the quarter, down from 200,000 in the second quarter and 500,000 in the first quarter. Lazaridis said that RIM remains committed to the PlayBook and the tablet market, despite its difficulties with the rollout of the PlayBook.
RIM forecasted smartphone shipments of 11-12 million units in the fourth quarter. "I think [investors] will be surprised by the magnitude of the decline" in BlackBerry shipments for the fourth quarter, Jeff Fidacaro, an analyst at Susquehanna Financial Group, told the Wall Street Journal. "It implies that the BB7 phones did not meet any of [RIM's] expectations."
The company has been cutting the price of the PlayBook by as much as $300 as part of holiday promotions, but said that additional promotional activity is needed "to drive sell-through to end customers." RIM said that this is due to several factors, including recent shifts in the competitive dynamics of the tablet market and a delay in the release of the PlayBook OS 2.0 software, which is now expected in February.
Balsillie acknowledged that RIM's market position and performance in the United States has not been up to par. He said that RIM is conducting a full evaluation of its business and is "leaving no stone unturned" in terms of looking at product management and the number of products it launches, marketing and advertising, partnerships and licensing and RIM's organizational and management structure. He also said that RIM plans to undertake a comprehensive advertising and marketing campaign for the U.S. market in 2012.
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