Analysts, investors sour on BlackBerry 10

Research in Motion Ltd. is counting on the upcoming release of the new BlackBerry 10 to improve the company’s flagging fortunes. But from what they have seen of the new phone thus far, analysts and investors remain skeptical.

The Ontario-based company has been leaking various features–such as full touchscreens and responsive keyboards–of the BlackBerry 10 at its annual conference in Orlando, Fla. this week.

“This would have been great if it happened in 2011,” said Peter Misek, an equity analyst with Jefferies & Company Inc., in a note. Though he noted that the attendance of all the major carriers at the conference was an encouraging sign that they had not given up on RIM, Misek worried that the models of the BlackBerry 10 he had seen were quite rough despite being close to launch.

“Preliminary views of the handsets and comments from RIM indicate that the hardware is ‘pokey,’ battery life is poor, and the software is rough or incomplete,” Misek said. “RIM has stated that the launch version will be improved, but there are only approximately five months left.”

In the meantime the company’s competitors will continue to try to widen the gap between their products and the BlackBerry. “BlackBerry 10 is in early stages and the competition will have new offerings in the market when BB10 smartphones arrive later this year,” said Jennifer Fritzsche, a senior analyst with Wells Fargo Securities.

RIM’s sales have fallen for five consecutive quarters as BlackBerry’s have fallen out of favor with consumers, who have switched in droves Apple Inc.‘s iPhone and phones running Google Inc.‘s Android operating system. The company has pointed to the BlackBerry 10 release as its chance to catch up with other phone-makers and halt this trend.

The touchscreen keyboard for BlackBerry 10 will incorporate a predictive typing feature. Users will be able to swipe upwards to complete words that the keyboard suggests. (RIM)

Among the new features announced at the conference was a touch keyboard that will gradually adjust the relative size and position of keys as its software learns where individual users tend to press. The company also demonstrated software that will allow users to toggle between applications with horizontal swipes without leaving apps to return to the home screen–a frequent complaint of iPhone and Android users.

The company is also trying to encourage third-parties to create their own apps for the BlackBerry, which developers have been slow to do. “While RIM is addressing prior shortcomings that limited developer momentum, it is still playing catch-up versus Apple’s 600,000 apps and Android’s 400,000,” said Mark Sue, an analyst at RBC Capital Markets. “RIM’s smaller app and content ecosystem could constrain BlackBerry’s traction among the broader consumer market.”

RIM has a long way to go to reverse its recent decline. The company’s stock has plummeted more than 75 percent since last April, falling from a 52-week high of $57.32, to its current price of $12.80. Its low share price has periodically sparked rumors that all or part of RIM may be acquired by a competitor. Its stock reached a six-month high of $17.57 in January on talk that Samsung was considering purchasing the company. But such rumors have dwindled since.

“We believe that RIM has no near-term interest in a sale of any part of the company,” said analyst Misek. “The jury is still out on licensing.”

The company’s stock has fallen more than 15 percent since the start of the conference on May 2.

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