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Research in Motion (NSDQ: RIMM) did its best Thursday afternoon to convince skeptical financial analysts that its disappointing outlook for…

BlackBerry Curve 8520
photo: T-Mobile USA

Research in Motion (NSDQ: RIMM) did its best Thursday afternoon to convince skeptical financial analysts that its disappointing outlook for the current quarter is just the reflection of a few blips in execution, rather than anything deep-seated. But unless it manages to wow the mobile world with demonstrations of the BlackBerry 7.0 software at BlackBerry World next week, it could be in for a rough year.

It’s never a good sign for your company when your co-CEO (Jim Balisillie in this case) calls your product line “aging,” especially in an industry that moves as fast as technology, during a conference call explaining why your profits are dropping. But it’s true nonetheless: RIM is losing ground at the higher end of the smartphone market against the iPhone, Android phones, and maybe even a few Windows Mobile 7 phones as it scrambles to get new product out the door. Current-generation BlackBerries look boring against newer phones and the BlackBerry software isn’t nearly as competitive against more modern mobile operating systems as anyone at RIM would like, especially when it comes to things like Web browsing and available applications. That’s one reason RIM chose to launch the Playbook with new software developed by its QNX subsidiary, which it eventually hopes to bring to the BlackBerry.

But it doesn’t sound like that’s going to happen for quite a while. First off, newer products running the BlackBerry 6.1 software have been delayed several weeks, and will arrive a few months later than RIM had expected when it was making plans last year, Balsillie said. He also revealed that the BlackBerry 6.1 software, which RIM has been talking about for a while, will be renamed BlackBerry 7.0 because it’s “a huge upgrade for us” with a new browser, touchscreen capabilities, and other bells and whistles. Not because 7.0 sounds more advanced than 6.1.

Balsillie owned up to delays on RIM’s end that have in turn delayed the carrier certification process required before new wireless products can launch. “The delays are the time for us to complete the innovation and have it ready for certification. It’s on our backs,” he said.

However the real problem is that QNX-based BlackBerries now likely won’t arrive until the release of BlackBerry 8, which isn’t even on the radar screen yet. Balsillie was coy on the call regarding exactly what software would be at the heart of BlackBerry 7, a bit understandably since next week’s conference will likely update the company’s road map and he doesn’t want to steal thunder from the show.

That means unless RIM has a hit on its hands with phones based on BlackBerry 7, it will continue to have trouble competing against high-end smartphones that generate more profit than their cheaper cousins. With Apple (NSDQ: AAPL) expected to unveil new iPhone software in June and a new handset later this fall, plus Google’s Android team gearing up for its May Google (NSDQ: GOOG) I/O conference, RIM’s competition is about to reload with advances of their own, and RIM has the unfortunate distinction of having to go first.

“Entry-level products do a fine job for us but we also need to have the higher-end newer products and we need to have them in market,” Balsillie said.

Several analysts questioned RIM’s decision to leave its full-year profit guidance unchanged in light of the situation, which assumes that RIM will pull off huge BlackBerry shipment numbers in the second half of the year without making any major spending cuts.

Balsillie said at least a dozen times that RIM is going through a “transition” that might be painful at the moment but will pay dividends for the company once everything falls into place. “We’re positioning this for the next ten years. This is going to be a fantastic opportunity to be at the epicenter of the portable and mobile transformation.”

Such a statement implies that the transformation has yet to occur, which is not what the mobile industry hears from companies like Apple and Google, who are confident that we’re already pretty far down the path toward a mobile-centric future. RIM’s operational and financial models are built around the assumption that it is a leader in mobile computing and a brand that people embrace. It’s pretty clear, however, that RIM is scrambling to catch up with the leaders of the industry as the BlackBerry brand shifts from its previous definition as the ultimate in mobility to the less-expensive corporate alternative to iOS or Android.

It’s a “transition” all right, but RIM has not managed to convince the technology elites or the financial community that it is on the right side of that transition. The next six months are crucial for a storied company that still hasn’t recovered from being caught flat-footed by the iPhone four years ago.

  1. Let’s be clear about how wrong Rim and Balsillie + Lazaridis are on their vision on mobility. There can be no ‘transitioning’ taking place in the mobile industry, mobility had always been everywhere, just in different formats. The only one ‘transitioning’ is Rim, mainly strugglng to survive as a pager-turned-emailphone manufacturer who has become irrelevant since year 2007. Rim is not only struggling against Apple, Android, and Microsoft/Nokia. Rim had become a cancer of our society when it began making those insanely designed Blackberrys which by now had shown to be a useless email-only glorified pager that was over-engineered and stupidly useless in a world that is much more dependant on apps than the rather useless emails which realistically makes up a very tiny part of a person’s life, or the myriads of very important corporate business functions, Rim has absolutely no idea of what people do, and how businesses work. For Rim’s long overdue life of vanity and uselessness, Rim is now going to pay for its lifelong of visionless mistakes with blood.

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  2. the choices of people are changing and the mobile technology should be changed accordingly to have hold on market….it is true that RIM is ageing but it can turn up in race with a change……….BlackBerry is still a choice of business segment….

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