RIM Rally May Fizzle as Rival estimates are too optimistic IPAD

Research In Motion Ltd. has increased by 41 percent since August on prospects for its new tablet device. That may be too big jump since the product is late to a market led by Apple Inc. 's IPAD, analysts say they are reducing ratings.

Sales estimates for the BlackBerry playbook vary from 1 million units next fiscal year to 8 million analysts try to predict demand for a team that will not leave until the first quarter and will also face other rivals as well Apple.

"It will be a modest seller and the IPAD probably make 10 times more," said Shaw Wu, an analyst at Kaufman Bros. in San Francisco, which cut its rating on RIM to "hold" on November 9. He estimates RIM sold 1,000,000 playbooks next year at most.

The tablet shows that RIM are the growth beyond the BlackBerry device, which is losing users of Apple's iPhone and devices that use Google Inc. 's Android software. Book sales strategies may reach $ 1.1 billion, or 4.8 percent of the 22.8 billion in revenue analysts predict that by next year from RIM. The calculation is based on the median of 17 estimates in a survey for RIM to sell 2.55 million tablets at an average price of $ 430.

At least six analysts have cut their rating on RIM shares over the last six weeks, and less than half of those tracked by us recommend buying. Shares of Apple, it is recommended 90 percent of the analysts that follow.

Some maintain faith in the MRI. Matthew Robinson, Wunderlich Securities analyst in Denver, said in a research note Dec. 10 the playbook is compelling because it works with the BlackBerry, allowing hooked on the smartphone from RIM to "continue to use his communication device preferred. " He reiterated his "buy" rating on the shares.

The fight against Holder

RIM, based in Waterloo, Ontario, is quick to introduce the tablet to its core audience of what co-CEO Jim Balsillie called "people so busy working," with the aim of preventing the IPAD to make new inroads with users business. IPads Apple sold 4.19 million last quarter, revenue of $ 2.8 billion.

By the time the playbook goes, Apple has sold about 17 million iPads, said Steven Fox, an analyst at Credit Agricole in New York Securities, who expects annual sales playbook about 1 million. The IPAD was released in April.

"Unlike smart phones, iPhone, where there was a big hurdle to overcome to enter controlled companies by the owner of RIM, the IPAD is now the owner at the beginning of the company that RIM would have to" in one of its characteristics , "Fox said in a note to clients last week. He cut his rating on RIM "underperform."

RIM says the playbook is better than the IPAD on tasks like video playback. The stock rose 12 percent in two days in October, after co-CEO Mike Lazaridis demonstrated the playbook running video clips. He and Balsillie handle stress the playbook of Adobe Systems Inc. 's Flash technology on which much of video content online. The IPAD does not support Flash.

Expectations 'too strong'

The dominance of market iPad tablet PC that "change when we are in the market," Balsillie said in an interview last month. Apple CEO Steve Jobs has said that devices like the playbook is "dead on arrival" because they are too small to compete with the iPad. The playbook is a 7-inch (18 cm) screen, smaller than 9.7 inch screen of the iPad.

Jeff Fidacaro, an analyst at Susquehanna Financial in New York, RIM expects to ship 8,000,000 playbooks next fiscal year. While his prognosis makes the most optimistic among analysts said recent increases in action suggests that investors are taking sales even more, about 10 million units.

"The investors' expectations are too high for the power of incremental revenues for this release tablet," he said in a note.

Gleacher & Co. 's Mark McKechnie and Exane BNP Paribas Peterc, Alexander both reduce RIM its rating to "neutral," saying recent rise of the action is no longer manufactured cheaply, given the competition. Peterc expects sales of the playbook of 3.3 million units next fiscal year. McKechnie provides 1.8 million.

RIM declined to comment on analysts' estimates sales playbook, said Tenille Kennedy, a spokesman for the company.

'Rally playbook-Driven'

RIM fell 36 cents to $ 60.45 on the Nasdaq stock market yesterday. The stock has risen from a low of 17 months of $ 42.84 on August 31, before the company unveiled the tablet. Apple has increased 56 percent since the introduction of IPAD 27 January.

"Much of it is real based on demonstration playbook," said Colin Gillis, an analyst at BGC Partners LP in New York, in an interview. "But the real position of competition and the scenery has not changed at all." He recommends selling the shares of RIM.

RIM reports fiscal third-quarter results tomorrow. Sales grew 38 percent to 5.41 billion U.S. dollars, according to the average of 43 estimates compiled by us, helped by new products like the BlackBerry Torch slideout keyboard. Earnings per share is estimated to increase to $ 1.65 from $ 1.10 last year.

new software on QNX playbook is able and willing to be the platform for all future devices from RIM, RBC Capital Markets Mike Abramsky said. However, the onus is on RIM to build the software successfully in the playbook and persuade customers to choose the device, Abramsky, who is based in Toronto and has a "top pick" for RIM, said in a research note.

"Apple has a huge advantage and the proliferation of Android devices are," said Abramsky.