MONTREAL - A year without a new BlackBerry launch has hurt Research In Motion in the competitive North American marketplace, enough that even a decent quarterly financial performance might not dispel concerns about the company's long-term performance, analysts say.
"Our investment concern remains that RIM's existing products are not competitive to sustain market share over the long term," says National Bank Financial analyst Kris Thompson.
Research In Motion will release its second-quarter results Thursday after markets close, with late summer sales of the updated BlackBerry Bold and the Torch expected to help the Waterloo, Ont. company.
RIM has been late delivering some products in recent years, which has been noted by analysts as a competitive drawback. The PlayBook came late into the tablet game, well behind Apple's iPad and devices powered by Google's Android platform.
The last new phone to debut from the company was the BlackBerry Torch, with a touchscreen and pullout keyboard, in August 2010.
Upgraded BlackBerry Bold and BlackBerry Torch smartphones, which have improved operating systems, were rolled out in August.
"In North America, future buyers prefer the iPhone and Android nearly 20 to one over BlackBerry -- a year without a new phone launch has hurt RIM," Thompson said in a research note.
As for RIM's new generation of BlackBerrys, expected to debut in 2012 or possibly late this year, Thompson said there's "limited visibility" into the road map for these devices.
RIM has said its next generation of BlackBerrys will have the same operating system as its PlayBook tablet. These smartphones are expected to be fully touchscreen friendly and act more like mobile computers.
Analysts' estimates compiled by Thomson Reuters are looking for RIM's second-quarter revenue to reach US$4.5 billion and earnings per share of 90 US cents.
Thompson said he expects adjusted EPS of 97 cents, before restructuring costs related to the layoff of 2,000 employees announced several months ago. He expects RIM to ship 11.9 million BlackBerrys during the quarter with an average selling price of $275.
However, Thompson has lowered his estimate for shipments of the PlayBook tablet to 450,000 units in the quarter from 860,000.
Wunderlich Securities analyst Matthew Robison said RIM's current sales may have little bearing on long-term prospects. Robison said RIM's updated BlackBerrys are "essentially equivalent to competitive offerings" from Apple and Android.
He noted that RIM's strength overseas and loyalty among "hard core" users will remain for the near term at least.
"BlackBerry 7 Bold and Torch devices appear to be slowing the exodus to Android and iPhone among hard core and overseas users," Robison wrote in a note.
BMO Capital Markets analyst TIM Long continues to rate RIM shares as "outperform" and has a share price target of $55.
Long said the August quarter marked the bottom of RIM's product cycle and added he was impressed with RIM's updated devices. He is looking ahead to RIM's third quarter with more improvements.
"For November, we expect guidance to show strong revenue and EPS growth sequentially, in line with Street models," he said in a note.
Shares in Research in Motion were down 54 cents, or 1.8 per cent, Tuesday to $29.44 in noon trading on the Toronto Stock Exchange.
