RIM Hails PlayBook As A Winner Despite High Pricing

BlackBerry smartphone maker Research In Motion has high hopes for the BlackBerry PlayBook, its answer to the Apple iPad that will begin US shipments on April 19.

RIM has invested enormous resources in the tablet – from promotional dollars to the April 2010 purchase of QNX, the operating system for the PlayBook. The company is betting big that the device will fortify its future as it risks continuing to lose market share not only to Apple but also to Android mobile devices.

“We’re investing in opening up a new category, bringing in a new platform. This is no time for half measures,” RIM co-CEO Jim Balsillie told analysts on a conference call announcing the company’s fiscal 2011 fourth-quarter earnings. “This is a time of enormous investment and transition.”

Thousands Of Pre-launch Orders

While RIM is not offering sales guidance on the tablet, its expectations were hinted at, as analysts peppered the executives with questions.

“We said, like, 20,000 retail outlets,” Adele Ebbs, RIM vice president of investor relations, said at one point during the call, indicating the Best Buy, Office Depot, Radio Shack and Staples stores that will sell the PlayBook in America, in addition to the number of carriers that will support it. “They’re not going to have, like, one or two devices. So I think you can kind of see it’s not going to be in the tens of thousands.”

Balsillie jumped in and added, “Let me put it this way. Many of our corporate clients have approached us about each wanting tens of thousands of PlayBooks… They’re looking at tablets and they like the PlayBook architecture.”

He went on to say that RIM has “some good expected numbers”, and that it is anxious to get the device out, but it did not want to rush things and risk shipping an unstable or glitchy device.

“We believe [it will be] stable by April 19,” he went on. “It’s got a great over-the-air utility for upgrading; it’s got so many things that future-proof it… It’s a winner, it’s such a winner.”

RIM also shipped a record number of devices during the last quarter – 14.9 million – for a year-close total of 52.3 million. Handsets accounted for 81 percent of RIM’s revenue during the quarter, with 16 percent going to services and three percent to software.

Its guidance for the second quarter of this year, however, sent its stock falling in late trading. While Wall Street expected an average of $5.65 billion, according to Bloomberg, RIM announced expected revenue between $5.2 billion and $5.6 billion. In part, this was attributable, again, to the efforts it’s putting into the PlayBook.

“Earnings per share for the first quarter are expected to be in the range of $1.47 – $1.55 per share diluted,” RIM said in a March 24 statement. “This guidance reflects a mix shift in handset towards lower ASP products in the first quarter and an increased level of investment in Research & Development and Sales and Marketing related to our tablet and platform initiatives.”

It added that guidance range was also “slightly wider than normal” due to the risk of potential disruption in its supply chain due to the recent catastrophic earthquake and tsunami in Japan, where a number of components suppliers are located.