It's official: with the launch of Research In Motion's
RIM said on Tuesday its tablet will finally hit store shelves April 19, seven months after the device was announced.
The North American rollout will come almost a month after Apple's
On Tuesday, Apple confirmed it would start selling the iPad 2 in 25 more countries from Friday. That eased concerns that the crisis in Japan might curtail the supply of crucial components for electronic devices. Shares in both Apple and RIM closed higher.
As it enters the tablet market, RIM has little room for error and a small window to impress. It was once the undisputed king of mobile communications, but slicker Google
The big question is the Playbook's appeal to those not already part of the BlackBerry world, said CCS Insight's Geoff Blaber.
While investors await the consumer's verdict, the Canadian company has one more set of quarterly results to unveil without the PlayBook.
The report, due Thursday, is likely to show RIM's global growth story on track. As with recent quarters, the catalysts are sure to be higher overseas sales of cheaper handsets and U.S. discounts. Turmoil at Nokia, the leader in the low-end of the market, probably didn't hurt matters either.
The PlayBook will likely contribute only marginally to sales and earnings this year. Even so, it represents a nascent opportunity for RIM in a booming tablet marketplace.
RIM is hoping the PlayBook's natural affinity with its corporate-friendly smartphones gives sales an early boost and offsets a move by more companies to allow workers to use their own non-BlackBerry smartphones to access work-related email and data.
Unlike the almost 10-inch iPad, the 7-inch PlayBook boasts support for Flash, but the RIM tablet will not ship with its own cellular connection until mid-year.
The first version of the PlayBook pairs with a BlackBerry smartphone for features such as corporate email and to any smartphone for connectivity when not near a WiFi connection.
RIM's tablet will sell in 20,000 retail and wireless carrier outlets including Best Buy
Apple sold nearly 15 million iPads in nine months of 2010, two or three times as many as analysts had forecast. It is expected to sell 30 million or more this year.
Still, worries remain about the supply of key components. Several key components in the new version of the tablet come from Japan, including the battery and the flash memory used to store music and video on the device, according to research firm IHS iSuppli.
Expectations for the PlayBook are lower, with between 1 million and 4 million sales seen this year.
Scotia Capital analyst Gus Papageorgiou, who expects sales at the high end of that range, said the expansive distribution network could boost PlayBook 2011 sales to more than 7.3 million in North America alone.
While RIM is seen as less exposed to Japanese supplies, its conference call following the numbers could also provide further insight from mobile industry executives on supply chain disruptions due to the earthquake.
RIM likely shipped almost 14.9 million devices in the quarter, which included Christmas and Valentine's Day, according to 12 analysts surveyed by Reuters. They shipped 14.2 million in the previous quarter.
Analysts on average expect RIM to earn $1.76 a share on revenue of $5.64 billion, both some 38 percent higher than a year earlier, according to Thomson Reuters I/B/E/S. RIM's own forecast is for sales of between $5.5 billion and $5.7 billion and earnings of between $1.74 and $1.80 a share.
In its last reported quarter RIM got 44 percent of its revenue from outside North America and Britain. That portion is expected to grow as RIM extends deeper into emerging markets.
AVERAGE SELLING PRICES
A shift in mix toward cheaper phones will hit average selling prices and mean RIM must ship even more phones to boost revenue, but will likely not hit gross margins, which at 43 percent are among the highest in the mobile industry.
Meanwhile, a November discount on its Torch model, launched in August with an improved browser, may have offset RIM's U.S. market share losses since Verizon started selling the iPhone.
Turmoil at global rival Nokia
Analysts expect RIM's earnings to drop to $1.65 a share in the current quarter on revenue of $5.65 billion. (Additional reporting by Euan Rocha in Toronto and Arup Roychoudhury in Bangalore; editing by Frank McGurty, Bernard Orr)