BlackBerry maker Research In Motion will need to deliver strong new devices on time to win back consumers who have bought Apple's iPhone and Android smartphones, analysts said Wednesday, a day after RIM's shareholder meeting.
"From a consumer's point of view, nothing has been holding them back from migrating towards the Android and Apple ecosystems," said analyst Anil Doradla of William Blair & Co.
"You've got this whole large set of people who have upgraded their phones over the last two years and they did not go with a RIM phone. It's going to be so much more difficult for RIM to get back these guys," Doradla said.
Doradla noted that RIM has put out few new devices in the last two years while Apple has updated its iPhone and consumers have been able to choose from numerous Android smartphones at a wide range of prices.
"It's a question of whether they are going to be on the fringes or they're just going to be a non-entity. They are not going to be coming back to their glorious past."
RIM shares (TSX:RIM) dipped in afternoon trading a day after co-CEOs Jim Balsillie and Mike Lazaridis admitted at the company's annual meeting that it could be doing better in some areas. But they remained upbeat that an upcoming new generation of high-end BlackBerrys will drive stronger results.
A number of recent troubles have attracted criticism and depressed RIM's stock value, including the lacklustre debut of its PlayBook tablet, a cut to its financial guidance and a plan to lay off some staff. Research In Motion also has been criticized for taking too long to get out its new devices and not being able to capitalize on the popularity of consumer software applications likes games, puzzles, music and other diversions.
RIM's BlackBerry blog said its BlackBerry App World recently had more than one billion downloads, a milestone reached after more than two years. By comparison, Apple's App Store said it reached one billion downloads in 2009, nine months after it opened.
The RIM executives said a new slate of smartphones with an updated operating system will be ready to hit the market in the coming months. They also said a new generation of BlackBerrys with the same operating system as the PlayBook tablet will help secure the company's future success when they debut next year.
RIM shares were down 44 cents or almost 1.6 per cent at $27.08 on Toronto Stock Exchange, far below their 52-week peak of $69.30 but above the low of $25.28. In 2008, shares were trading at $140.
Northern Securities technology analyst Sameet Kanade said RIM's constant message of "everything will be fine, we are in a transition phase -- please believe in us" is wearing thin.
"Unless we see a positive buildup in market share and positive sell-through of smartphones and tablet PlayBooks, I think for us it's going to be a matter of standing on the sidelines," Kanade said from Toronto.
"They have gone in four years from being a leader to a reactor, to sort of a follower of what's going in the space and too late to market to recognize the threat of the iPhone and more importantly, right now, the threat of Google's open platform, Android."
But BMO Capital Markets analyst Tim Long, still bullish on RIM, said the new BlackBerrys with updated operating systems that will be released in the coming months are a positive "product refresh."
"We maintain our 'outperform rating,"' Long said in a research note. "We continue to believe that sentiment is far too negative. We believe the product refresh will help sales and EPS (earnings per share) rebound."
