As I write this, shares of BlackBerry maker Research In Motion
The company's $1.78 of GAAP earnings per share on $5.6 billion in revenue wasn't bad; 36% year-over-year sales growth and 32% higher earnings beat analyst expectations on the bottom line and in line with the Street in terms of sales.
That's alright, but earnings guidance for the next quarter came in about 8% below the current analyst outlook. There's the results-driven reason behind free-falling share prices. Why the low expectations? RIM sees its sales shifting into lower-end, lower-margin models in the near term, and expects to invest a lot of money and effort into its tablet and platform initiatives.
And that's where the second shoe drops: Separately, RIM also announced that its QNX-powered PlayBook tablet will run every one of the 25,000 existing BlackBerry Java applications by means of an "app player" tool. More apps can be created with the BlackBerry WebWorks tool kit or by exporting Adobe Air apps.
But wait, there's more! Adobe Systems
So by my count, that's at least four distinct app models, including the native BlackBerry Tablet (QNX renamed) environment running C/C++ programs. RIM saw Palm floundering with a weak app ecosystem and is determined not to meet the same fate as its own app store remains orders of magnitude smaller than the ones managed by Apple
But in doing so, RIM has largely made a generic PC-clone out of the PlayBook. Want Android apps? By all means, buy an Android tablet! The customers who would be interested in the widest possible app market will take one look at the PlayBook, then shrug and buy a Hewlett-Packard
Heck, RIM likely would have targeted supporting HP's webOS and Apple iOS if those systems were as open as Android. Trying to go all the way with apps might create something unique, but this situation is best expressed in song. Strike up the band:
Trying to keep up with you
And I don't know if I can do it
Oh no I've said too much
I haven't said enough
-- "Losing My Religion," by R.E.M.
RIM co-CEO Jim Balsillie thinks this is great, of course: "We're in an era of absolutely no compromise on the app side, which is a distinguishing and highly valuable proposition," he told analysts on the earnings call. That's why RIM will drop boatloads of cash on making it all work, alongside efforts to set PlayBook's native environment apart from the competition.
It's a confusing and expensive strategy, and I don't think it'll speak to consumers. Moreover, RIM is giving itself yet another reason to write off the $200 million QNX purchase as a big mistake.
Will RIM ever figure out how to stay relevant or is the company doomed to irrelevance? Either way, you'll be the first to know if you just stick the ticker in your Foolish watchlist. Click here to get started.
Fool contributor Anders Bylund owns shares of Google but holds no other position in any of the companies discussed here. Google is a Motley Fool Inside Value pick. Google is a Motley Fool Rule Breakers recommendation. Apple and Adobe Systems are Motley Fool Stock Advisor picks. The Fool has written puts on Apple. Motley Fool Options has recommended a bull call spread position on Apple. Motley Fool Options has recommended a diagonal call position on Adobe Systems. The Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.