Research in
Motion will reveal its second-quarter financial results late Thursday, but
here's what most BlackBerry investors really care about: What the heck is going
on with BlackBerry 10?
RIM
shocked the industry in June when it said that the BlackBerry 10operating
system, meant to be the crown jewel of the company's turnaround, won't hit the
market until the first quarter of 2013. The software had previously been slated
for release later this year.
The news was so damning that critics wondered aloud if RIM (RIMM) will even survive long enough to
launch BlackBerry 10.
Fast
forward three months. RIM spent this week at its BlackBerry Jam Americas
developer conference trying to prove those naysayers wrong. The company
released a new update to the developer tools for BlackBerry 10 and revealed
that the number of BlackBerry subscribers grew 2 million over last quarter to
80 million worldwide. (It also released a cheesy music video that several
writers declared the worst corporate video ever made.Fortune's Dan Mitchell called it "slightly creepy on a
few different levels.")
RIM
CEO Thorsten Heins devoted much of his keynote speech at the conference to
BlackBerry 10, saying that the OS is on track for launch in early 2013. He
ended his talk with a statement that highlights just how heavily RIM is
depending on BlackBerry 10 to be its savior: "We are convinced this
platform will shape the next 10 years as profoundly and as positively as
BlackBerry shaped the last decade. To do that, we are listening. We are
focused. We are excited about our future."
Until that future arrives, RIM is stuck in a holding pattern. Everyone fromApple (AAPL, Fortune 500) to Nokia (NOK) to Microsoft (MSFT,Fortune 500) has released shiny new gadgets
recently, but RIM is essentially forced to wait for the BlackBerry 10 software
before it can unleash any significant new hardware.
Early
reviews of BlackBerry 10 have generally been positive -- but if RIM's future
rests solely on the success of this OS, it has a lot of ground to make up.
RIM's
main problem is its lost stronghold in the corporate market, where it once dominated.
Rather than issuing company BlackBerries, many employers now have
workers bring their own devices into work. Those workers usually
choose Apple's (AAPL, Fortune 500) iPhone and Google's (GOOG, Fortune 500) Android devices.
Meanwhile shipments of BlackBerry phones fell a staggering 41% over the
year to 7.4 million last quarter, according to an IDC report. That represented
less than 5% of the market -- the lowest level since 2009, IDC said. On the
financial front, RIM still has over $2 billion in cash on hand. But it lost
$518 million last quarter, when sales slumped 43% from a year ago.
The
near-constant barrage of bad news from RIM over the past year hastarnished the company's
image. In the tech field, it takes a certain amount of cachet to
convince consumer and companies to choose your gadget over all the rest.
Investors
are also worried. RIM shares have lost 54% of their value in 2012 alone.
Still,
with its large purse and growing subscriber base, RIM isn't dead yet. BCG
Partners' Colin Gillis included a cautiously optimistic "investment
haiku" in a note to clients late Wednesday: "There is still a chance
/ RIM finds a market foothold / although it looks bleak."
How
good that chance is now rests on BlackBerry 10.
@CNNMoneyTech September 27, 2012
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