Barclays Capital expects Research In Motion Ltd. (NASDAQ: RIMM) to announce both new product -- OS6 and possibly QNX -- and software / application at RIM’s Capital Markets Day on May 2 in Orlando. In addition, the PlayBook sales should be the highlight of the analyst day.
The brokerage expects RIM’s Capital Markets Day to serve as a positive catalyst for the shares. Beyond solid PlayBook sales, the brokerage expects new OS6.1 devices, and timelines for QNX improvements.
We expect a full product refresh across RIM’s current portfolio of its Torch, Bold, Curve, and even Storm product families, during this year, with at least one or two new product unveilings at the events. The next generation of these devices will come with an enhanced operating system -- BlackBerry OS6.1 -- and feature greatly improved processing speeds of up to 1.2GHz, said Jeff Kvaal, an analyst at Barclays Capital.
Kvaal said touch capability will be further incorporated across all the device families with both the touch Bold and Curve expected to launch this year. NFC is also on the roadmap.
Our retail checks indicate PlayBook sales are solid following decent pre-orders. Returns appear low despite early bugginess. Our CIO survey work showed 20 percent to 25 percent are likely to support PlayBooks, said Kvaal.
Kvaal is not expecting material initial unit volumes of the PlayBook and therefore model modest units of about 270,000 in fiscal first quarter and about 3 million in fiscal 2012. This assumes only low-single-digit to idsingle-digit penetration into RIM’s current subscriber base of about 60,000.
Kvaal considers the PlayBook device very much enterprise-focused to start and consider initial demand likely to be constrained to RIM’s current subscriber base. He expects volume ramps through the year as RIM launches the WiMAX, HSPA+, and LTE versions of the PlayBook. Sprint’s WiMAX PlayBook is due for early May, modestly ahead of plan. Equally important, access to the Android market apps will be key.
Kvaal said the BlackBerry Torch 2 is expected to be powered by a 1.2GHz processor including 768MB of RAM and 8GB of storage space. The first-gen Torch only had a 624MHz processor, and is considered underpowered so the improved 1.2GHz processor should help.
The device will come with a 3.2 inch VGA capacitive touch screen and also feature a 5MP camera, plus GPS and Bluetooth capabilities, as well as NFC support. It will run on OS6.1. The device is expected to be released by AT&T some time in third quarter.
Kvaal said the BlackBerry Touch Bold aka “Montana” is expected to support CDMA/EV-DO connectivity though he has also heard that GSM/UMTS connectivity may also be supported.
The device itself comes with a 2.8 inch capacitive touch screen and is expected to be powered by a 1.2 GHz Qualcomm chip including 512MB (update: previously thought to be 768MB) of RAM and 6.5GB (update: previously thought to be 8GB) of storage space.
The device also features WiFi, GPS, NFC, and comes with a 5MP camera with flash and HD recording. Launch appears targeted for August, likely with Verizon and Sprint.
Kvaal said the BlackBerry Touch 9860 (Monaco) appears to be a nextgeneration Storm. The device features a 3.7 inch WVGA display, dual core 1.2GHz processor, a 5MP camera with 720p video recording, and NFC.
It supports only CDMA connectivity and released with OS 6.1. Launch appears targeted for the July / August timeframe. Several blogs have reported that the Storm line may be rebranded within either the Bold or Curve families.
Kvaal also expects to see a touch version of the Curve, including many of the improved features above (faster processor, memory, camera...etc), likely around the November timeframe.
Kvaal expects significant improvements to the BlackBerry ecosystem to come as soon as this summer including the launch of BlackBerry OS6.1, support for native email on the PlayBook and Android, as well as further expansion of QNX apps.
RIM is set to launch many of the above-mentioned devices with OS6.1, which management considers a major upgrade to OS6.0. While details have been limited to date, we do expected enhancement to include updated versions of many of RIM’s popular apps (Facebook, Radio, Podcasts), and the App World in particular. OS6.1 availability is likely for end of first quarter fo 2011, said Kvaal.
Kvaal expects several of the missing features from the initial PlayBook launch, including native email plus contact / calendar integration, to be fixed and available over the summer. He believes AT&T will eventually support BlackBerry Bridge as well.
Kvaal believes RIM continues to make progress with improving its application ecosystem. It is now well known and highly anticipated that the BlackBerry App World will support the apps and games within the Android Marketplace. He believes this does essentially solve RIM’s current lack of apps.
Kvaal said he count over 25,000 in the App World and just over 3,000 for the PlayBook. Android support will be some time in the June to July timeframe.
Kvaal believes RIM may benefit from a music store tie up with Amazon. Amazon remains one of the leading competitors to Apple Inc.'s iTunes store to purchase music and a potential collaboration between the two companies should further strengthen the BlackBerry ecosystem.
QNX smartphones in early 2012
RIM has confirmed that QNX-based smartphones will arrive in early 2012. Kvaal has hoped and expected a late 2011 launch to take advantage of the holiday selling season. Nevertheless, he remains optimistic on the prospect of QNX smartphones and in general RIM’s future product roadmap given the technical capabilities of how he has seen the QNX OS and PlayBook perform.
Kvaal considers QNX an important element in RIM re-establishing its technical leadership. RIM has slowed over the past years in its technical competitiveness as other vendors have incorporated faster processors, better display quality and screen resolution, clearer cameras, among others.
The internet browser has been one of RIM’s biggest setbacks, though has vastly improved on the Torch. Arguably, the browser on the PlayBook is now a strength given Flash support. RIM also continues to lead in push email. In Kvaal's trials of the PlayBook, he believes QNX solves many of RIM’s technical disadvantages and is the reason of much of our optimism. Execution of course remains key.
We expect further detail on QNX Android support (early summer), native email (later summer) and possibly a music tie up with Amazon. We wait for further details through the year and hope for an update on RIM’s progress on this front during its analyst day, said Kvaal.