"Our investment concern remains that RIM's existing products are not competitive to sustain market share over the long term," says National Bank Financial analyst Kris Thompson.
Research In Motion (TSX:RIM) will release its second-quarter results Thursday after markets close, with late summer sales of the updated BlackBerry Bold, Torch and Curve expected to help the Waterloo, Ont. company.
RIM has been late delivering some products in recent years, which has been noted by analysts as a competitive drawback. The PlayBook came late into the tablet game, well behind Apple's iPad and devices by other manufacturers powered by Google's Android operating system.
The last new RIM phone product line to debut was the BlackBerry Torch, with both a touch screen and pullout keyboard, in August 2010.
Upgraded BlackBerry Bold and BlackBerry Torch smartphones, which have improved operating systems, were rolled out last month.
"In North America, future buyers prefer the iPhone and Android nearly 20 to one over BlackBerry -- a year without a new phone launch has hurt RIM," Thompson said in a research note.
As for RIM's new generation of BlackBerrys, expected to debut in 2012 or possibly late this year, Thompson said there's "limited visibility" into the road map for these devices.
RIM has said its next generation of BlackBerrys will have the same operating system as its PlayBook tablet. These smartphones are expected to be fully touchscreen friendly and act more like mobile computers.
Analysts' estimates compiled by Thomson Reuters are looking for RIM's second-quarter revenue to reach US$4.5 billion and earnings per share of 90 US cents.
Thompson said he expects adjusted EPS of 97 cents, before restructuring costs related to the layoff of 2,000 employees announced several months ago. He expects RIM to ship 11.9 million BlackBerrys during the quarter with an average selling price of $275.
However, Thompson has lowered his estimate for shipments of the PlayBook tablet to 450,000 units in the quarter from 860,000.
Wunderlich Securities analyst Matthew Robison said RIM's current sales may have little bearing on long-term prospects. Robison said RIM's updated BlackBerrys are "essentially equivalent to competitive offerings" from Apple and Android.
He noted that RIM's strength overseas and loyalty among users will remain for the near term at least.
"BlackBerry 7 Bold and Torch devices appear to be slowing the exodus to Android and iPhone among hard core and overseas users," Robison wrote in a note.
IDC Canada analyst Kevin Restivo said the success of the updated Bold, Torch and Curve devices won't fully clear until RIM's next quarter because the devices were released late in the company's fiscal second quarter.
"It's more a litmus test than it is a full-blown indication of RIM's success," Restivo said from Toronto.
RIM's fiscal third quarter, which will end Nov. 26 and be reported Dec. 15, is generally a stronger selling season for smartphones and there will be more time to "digest" these offerings, he said.
On Tuesday, RIM lost another senior executive to another company.
John Vandermay was vice-president of BlackBerry Enterprise Server Software and led a team of more than 400 software developers and testers. Vandermay will join Gemcom Software International, a global supplier of mining software solutions, as vice-president of product development.
A number of senior RIM executives, including key marketing and product managers, have previously left the company in the past year.
The departures were among the reasons cited by a Canadian investment banker who is rallying other shareholders in an effort to change RIM's board of directors and force it to seek strategic alternatives.
Vic Alboini, chairman and CEO of Jaguar Financial Corp., issued the public call for a shakeup of RIM last week. He said other large RIM shareholders supported Jaguar's initiative but the dissidents had less than the five per cent holding required to requisition a special meeting.
Shares in Research in Motion closed down 28 cents to $29.70 Tuesday on the Toronto Stock Exchange.