RIM buys itself breathing room for BB10 launch

Monday, 1 October 2012 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: Research In Motion Ltd, after buying itself breathing room last week by delivering stronger-than-expected quarterly results, still faces the formidable task of delivering a make-or-break line of new BlackBerry devices early next year.

The more stable cash position that RIM achieved during its fiscal quarter ended September 1 will give the company a fighting chance to market the new BlackBerry 10 effectively while ramping up full production of the revamped line, analysts said.

Until Thursday’s results, RIM was being written off by analysts because of its failure to keep pace with innovations from rivals such as Apple Inc and Samsung Electronics Co.

Investors responded to the rare glimmer of good news for the embattled company by pushing up RIM’s downtrodden share price by more than 12% on Friday.

“I have to admit they did a very good job making the best out of a really tough situation. You’ve got to give management some credit for that, but they still need to nurse the company back to health,” said Sterne Agee analyst Shaw Wu.

The company is counting on BB10 to arrest a precipitous decline in market share over the past year and longer.

But in the end, the success or failure of the BB10 will hinge by how warmly it’s embraced by consumers, many of whom have already switched to Apple’s iPhone and Samsung’s Galaxy, especially in North America and Europe.

Test versions of the BB10 have won praise from carriers and developers, but the true test still hinges on RIM’s ability to win back market share and the hearts of an ever growing base of touchscreen users.

Even though RIM’s aging line-up has lost ground in North America and Europe, the BlackBerry maker managed to top shipment and revenue expectations in its second quarter, thanks largely to strong sales of smartphones in emerging markets such as India and Indonesia.