RIM's new BlackBerry may overshadow quarterly results

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Research in Motion investors want to know one thing above all when the BlackBerry maker reports quarterly results this week: when will RIM's long-promised iPhone killer finally hit the market?

Robust earnings growth and solid sales of more than 11 million devices are unlikely to impress them much. Both are expected, along with further declines in average selling prices, as overseas sales of lower-end devices grow.

RIM's share of the more lucrative North American market, meanwhile, is expected to have eroded further as the iPhone and a slew of smart phones that use Google's Android operating system eat into the BlackBerry's market share.

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That's where the new BlackBerry 9800 comes in. The touchscreen device is said to have a full slide-out keyboard, along with a new operating system and revamped Web browser.

Analysts say the new device, expected to be dubbed the BlackBerry Torch, could revive RIM's sagging fortunes in North America and help it regain some of its faded glory.

"The expectations are that they're going to want to get a new product out into the marketplace in time for September, because that is when you get the back-to-school and big consumer push," said Mackie Research Capital analyst Nick Agostino.

More details about a launch timetable could not come at a better time for RIM shareholders. Motorola is expected to unveil its Droid X phone on Wednesday, while Apple's iPhone 4 -- which has already posted record pre-orders -- hits shelves later this week.

While Apple's shares have surged more than 90 percent over the last 12 months, RIM's stock has fallen almost 30 percent over the same period, as the once-iconic BlackBerry has ceded market share to its snazzier rivals in North America.

RIM's overseas sales have grown steadily, but much of the gains have come from sales of low-end devices that have weighed on the company's average selling price. RIM is also facing more competition within its once-secure enterprise segment, as some companies are allowing employees to swap BlackBerry devices for other smartphones.

RIM's critics are quick to note the BlackBerry's clunky Web browser, its dearth of in-built memory, its humdrum app store and the lack of a compelling touchscreen device.

But many BlackBerry aficionados and RIM investors are hoping the Waterloo, Ontario-based company will address most of these concerns with a launch of the new device and operating system this summer.

"The major question is how successful the new ... device will be and whether the BlackBerry OS 6 is the solution to improving consumers view of the BlackBerry Web browsing experience," said CIBC analyst Todd Coupland, referring to the OS 6 operating system.

To be fair it is not all bad news for RIM. The company's email and messaging systems are still viewed by many as the gold standard within the industry and shareholders hope that the company can build on its strengths.

Moreover, carriers say the BlackBerry is much more bandwidth-efficient than the iPhone and most other smartphones. Heavy downloads by some users recently prompted AT&T to end its unlimited data plan for the Apple in the United States.

QUARTERLY RESULTS

RIM has forecast shipments of between 11.2 million and 11.8 million devices for the fiscal first quarter ended in May. The company also expects to have added 4.9 million to 5.2 million subscribers during the quarter.

"I think broadly the international business is very strong, the North American business is probably a little bit weak, which is kind of what we saw in February as well," said Morgan Keegan analyst Tavis McCourt.

RIM sees its gross margin at 44.5 percent and the average price of its phones at $305 to $310, slightly below the 45.7 percent margin and $311 average selling price that it recorded in the prior quarter.

RIM could report slightly higher-than-expected device sales in the quarter, McCourt said, though that could come at the cost of a lower average selling price, as sales could be skewed in favor of lower-end devices in overseas markets.

The company has also forecast earnings per share of $1.31 to $1.38 and revenue of $4.25 billion to $4.45 billion. That compares with earnings per share of $1.12 and revenue of $3.42 billion a year earlier, when the global recession was taking its heaviest toll.

The latest consensus has analysts and investors eyeing earnings of $1.34 a share, on revenue of $4.35 billion, according to Thomson Reuters I/B/E/S.

"(RIM's) outlook for where they think they can take their North American business in terms of market share (is key)," said McCourt.

"People are aware that RIM have got a lot of momentum internationally. Investors will be a lot more constructive on the stock, if they start showing some growth again in North America," he added.