The new year can’t come soon enough for RIM. If the Waterloo-based company is to stay relevant in the long term, it will need to turn its fortunes around in a big way. I wonder what kind of new year’s resolution co-CEOs Mike Lazaridis and Jim Balsillie will make come January 1, 2012.
A new report coming out of Tech Trader Daily says that RIM’s shares are down $1.08, or 6%, at $17.11 as of Monday morning. The BlackBerry maker has fallen well below expectations this year, causing multiple analysts to slash estimates – chief among them is JMP Securities’s Alex Gauna, who downgraded RIM’s status from Market Perform to Underperform. Underperform is just another way of saying get your stuff together.
Low-priced smartphones are increasingly threatening to Research in Motion revenues and gross margins. The range of $130 and below smartphones has been steadily expanding and compares to RIM’s average device ASP of $287 in the August quarter.
Gauna isn’t the only one painting a grim picture of RIM. RBC Capital’s Mike Abramsky cut his price target from $29 to $23, cautioning that “impacts from recent service outages and PlayBook challenges (delayed software, sluggish sell-through)” will result in lower than anticipated Q3 revenue, $5.3 billion down from $5.4 billion.
And lastly, Kulbinder Garcha of Credit Suisse reiterated a report that RIM’s new QNX software is being delayed until mid-2012, with no respite in sight. Even worse, Garcha’s valuation of RIM reveals that a buyout is unlikely to happen because of “inherent concerns with the platform, a relatively weak intellectual property portfolio, and an enterprise value of $8.2 billion.”
Hey RIM, your days are clearly numbered. Stop dilly-dallying and pick your game up.
Does anyone even care about a QNX-based device anymore?