RIM succumbs to Apple onslaught

Research in Motion announced another dismal quarter on Thursday, slashing guidance and jobs as it recoils in the wake of a product onslaught from Apple.

Shares of the Canadian based company fell over 15 percent after it said it expects earnings between 75 cents and $1.05, sharply lower than the already pessimistic average view of $1.40, on revenue between $4.2 billion and $4.8 billion.

The disappointing news doesn't come in a vacuum , but instead follows a series of missteps as Apple and other companies mount pressure on the firm.

Without naming names, RIM executives admitted that the competitive landscape was taking its toll.

The challenges of the first quarter are continuing into the August quarter. The existing portfolio of BlackBerry products has been in market for close to a year and delivering new products has proven more challenging than anticipated, said co-CEO Jim Balsillie.

The wireless phone manufacturer has been on a virtual downward spiral for the past 5 years, and there doesn't seem to be an end in sight.

Since the iPhone's debut in 2007, the smartphone market switched from corporate to consumer, and RIM tried to keep up by adding the standard checklist of features to its BlackBerries.

Consider RIM's Blackberry Storm.

What was touted as potentially the first serious contender to the iPhone debuted with software so poor it was nearly universally canned from analysts and consumers alike. And while subsequent software updates made it bearable, the damage was already done.

Earlier this month Needham & Co. analyst Charlie Wolf cut his rating on the company to Hold from Buy, arguing the company spent a decade as a one-trick pony, delivering the gold standard in messaging services, but that it's just not enough anymore.

The follow-up to the Storm and the Storm 2 boasted a slide-out keyboard and a brand-new generation operating system promising a better experience that should resonate with today's consumer: people who wanted a device that did everything.

But the software was still slow, even the hyped keyboard was cramped and left something to be desired. Over-all sales were underwhelming. AT&T has since relegated to offering the phone for 90% discounts.

We estimate that 1/4 to 1/3 of Blackberry subscribers in the U.S. who came up for contract renewals last quarter switched to other platforms, leading to an estimated net ~1mil subscriber losses in the U.S. North America, Gleacher's Stephen Patel said after RIM gave a disappointing Q1 guidance last quarter.

Most telling: We are concerned that each passing month creates a higher bar for new Blackberry products and lowers the odds of RIMM being able to stabilize U.S. share.

Its latest prospect is the Playbook tablet computer. Executives said RIM shipped 500,000 PlayBook tablets in the six weeks after the launch, exceeding the average analyst forecast of 366,000, but admitted its approach to introducing the device into the market was not as smoothed as planned.

This is a disappointing start to what is sure to be an uphill battle. Apple defined the space with the launch of its iPad in 2010. Combined with the iPad 2 follow up, Apple has already sold 25 million units and is gaining momentum.

The core issue is a page straight out of Sony's 'playbook' -- RIM's skills as a hardware manufacturer have been more than offset by it ineptness in software development, the focus of competition today.

The blame must be laid at the feet of the company's Co-CEO's who in their actions and words, appear to have no clue on how to mount a successful response, Needham & Co. analyst Charlie Wolf said.

The shares have lost over a quarter of their value this year.

RIM's history is still unfolding and with over $20 billion in annual revenue, it has some time to correct itself.

But time is running out.