If Research In Motion’s latest results are any indication, phones powered by Google’s Android software are not the ‘iPhone Killers’ that so many bloggers and pundits were eager to brand them, but rather they are burying the Blackberry.
“Based on our store visit findings and product roadmaps, we expect further share gains from Android-based devices, as well as the iPhone,” wrote Baird analyst William Power, who downgraded the shares to ‘neutral’.
“Most of the major U.S. carriers have lined up behind the Android platform, which could squeeze out the heavier Blackberry campaigns of the past.”
Research In Motion shares plunged today after the company missed analysts’ sales estimates for the third time in the last four quarters and ceded more market share to competitors.
The conventional wisdom was that Blackberry would use its entrenched corporate position to grow into the more sophisticated consumer space, using well designed consumer phones that had the same features that made them so attractive to business people: push e-mail functionality, a Qwerty keyboard and reliability. It would do this while Apple fought it out for the rest of the teeny-bopper and geek market with the barrage of new phones coming from Motorola to HTC mimicking the iPhone’s touchscreen interface and apps store. But something changed.
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“Research In Motion has grown much faster than the industry by focusing on simplicity, reliability and continuous innovation,” wrote MKM Partners analyst Pablo Perez-Fernandez, who still rates the share a ‘buy’. “But competitors are catching up, with Android, WebOS and the Apple OS as the most obvious threats. Apple and Palm are particularly problematic for RIMM, in our view, because their offerings support consumer push email, superior web browsing and compelling user interfaces.”
Meanwhile, Apple is expected to say today that it sold more than 1 million 4th generation iPhones yesterday. In one year, shares of Apple have nearly doubled and Research In Motion has lost almost a quarter of its value. Google’s stock is up 14 percent.
“We estimate that net subscriber additions in North America declined on a sequential basis, which we attribute primarily to the success of Android-based phones, such as the Motorola Droid and the HTC Incredible at Verizon,” wrote Goldman Sachs analyst Simona Jankowski, who like the wireless sector, but calls the Blackberry-maker a ‘sell’. “Research In Motion delivered earnings per share upside largely by cutting operating expenses.”
In a puzzling move, Research In Motion said on its earnings call yesterday that it would be releasing two significant products at the end of the second quarter and start of the third quarter, but declined to say what they would be. Not exactly the same kind of theater used by Steve Jobs. The Wall Street Journal reported earlier this month these products could be a touchscreen phone and a tablet.
But that’s not quick enough to placate analysts, concerned about the loss of market share.
The earnings were “not the stellar results bullish investors were hoping for and opened the door for more questions,” wrote Citigroup’s Jim Suva, who also recommends selling the shares. “Inventory decline eludes to the conclusion that new product launches are not in the coming weeks, but rather months.”
How many iPads will Apple have sold by then?
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