What To Expect from BlackBerry World
RIM needs compelling products, and it needs them fast--certainly faster than the timeframes RIM is promising.
RIM's new CEO Thorsten Heins will get his first big chance to address the assembled BlackBerry community as the annual BlackBerry World Conference kicks off in Orlando, FL tomorrow. After famously noting at his appointment in January of this year that he did not see any need for "seismic" change at the company (a statement that was followed by the company's stock dropping 8.5% that very day), Mr. Heins seems to be coming to grips with the difficulties in front of him.
Last month, after the company posted its first quarterly loss in seven years, Heins embarked on a strategic review of the Canadian smartphone maker's direction with an increased emphasis on corporate users. Perhaps unwittingly copping a line from Lou Reed, Mr. Heins said the company "cannot succeed by trying to be everybody’s darling". The company is working to get its BB10-based lineup onto store shelves by year-end, while also seeking licensing deals, partnerships and cost savings of $1 billion this year.
The Huffington Post is predicting Mr. Heins will be unveiling "big new plans", but will "plans" be enough to stabilize the situation, particularly when the company has failed to deliver on so many of the promises it has made over the past year? This morning RBC Capital analyst Mark Sue lowered his financial forecasts for RIM based on continued losses in market share, and he now forecasts revenue for the February 2013 fiscal year of $13.7 billion, down from a previous projection of $14.9 billion, with profits of 96 cents a share, down from $1.95.
Despite all the doom and gloom, RIM still has a lot going for it with an installed base of over 13 million users, a worldwide brand, no debt, and $1.77 billion in cash on hand- not exactly the picture of a company with one foot in the grave. That’s the "snapshot" view, but you also have to consider he trajectory. RIM doesn’t break down sales by region but recently reported that 68% of sales came from outside the US, Canada, and the UK. It's those developed countries that are the trendsetters in the mobile industry. I was in Budapest, Prague, and Vienna last fall, and all I saw was iPhones.
While pushing for high-end phones here, RIM seems to be pushing for lower-prices models in developing countries like Indonesia. In those regions, RIM can still use its well developed relationships with the mobile operators to keep pushing the BlackBerry line, but do you really think Indonesians won't want iPhones?
In then end, RIM needs compelling products, and it needs them fast--certainly faster than the timeframes RIM is promising. If RIM can’t deliver those compelling products, the other option is a good exit strategy. If Mr. Heins doesn't make a good case for the former, we're all thinking of options for the latter.
Look for more on this as the week progresses.