By Ben Dummett, Dow Jones Newswires
Tuesday 03 May 2011
Blackberry maker comes out fighting in wake of last week's Q1 profit warning.
Research In Motion Ltd. Monday reiterated its reduced financial guidance and maintained there will be a resurgence in the company's fortunes when it starts selling its new smartphones later this year.
RIM's stock fell 14% Friday after the Waterloo, Ont.-based company cut its earnings projection for its first quarter, which ends later in May. RIM said sales in the U.S. and Latin America had slowed and that it sold a greater portion of lower-priced BlackBerry smartphones than originally expected as it faced delays in introducing new products.
At its annual developers conference in Orlando, RIM unveiled its newest version of its BlackBerry Bold smartphone, the first to run on the company's new BlackBerry operating system, and video chat for its PlayBook tablet.
Click here to find out more!The "company expects growth in the (third and fourth quarters) to be driven by BlackBerry 7.0 smartphones and to a lesser degree the playbook," Jim Balsillie, RIM's co-chief executive told analysts at the conference.
Balsillie said U.S. and international carriers are keen on the new products but the company hasn't yet delivered them for sale because they aren't ready.
The transition to new products is the "natural course" technology companies follow, but once completed, RIM will be poised to regain market share in the U.S. from rival Apple Inc. and continue to grow internationally, the executive said. Further, RIM doesn't expect to face the need for similiar transition in the next decade, Balsillie said.
Still, the product-launch delays are costing RIM potential business. A&T Inc. won't allow its customers to download key software needed to fully use the PlayBook until it's finished testing it. RIM couldn't deliver the product earlier to AT&T because it wasn't ready, Balsillie said. Releasing products prematurely is akin to taking "one step forward and two steps back," the executive said.
Some investors were particularly surprised by the slowdown in sales in Latin America as international sales have been key to RIM's growth. Balsillie suggested this slowdown is temporary and will rebound once the company introduces its higher-end products and more tiered pricing for its smartphones to address a wider market.
On Nasdaq Monday, RIM is down 0.9% to $48.20.
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