NYT: Analysts See Performance Issues Behind RIM’s Delays

[rickbansal]

Yet another reason why the board needs to act quickly and decisively:

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By IAN AUSTEN
Published: January 3, 2012


OTTAWA — When Research in Motion said in December that a new line of BlackBerry phones would not appear until the end of 2012, the announcement provoked equal parts of shock and disbelief from analysts.

Shock because even RIM acknowledges that the new phones are vital to reversing its rapid loss of market share in North America. At the same time, analysts were skeptical about the company’s explanation that the delay stemmed from its decision to wait for a new, improved microprocessor.

Instead, many analysts say that both the new phones and RIM’s new operating system, BlackBerry 10, may have significant performance problems and are delaying the project.

“They can’t get the infrastructure and the operating system ready in time,” said Peter Misek, an analyst with Jefferies & Company. Alkesh Shah, an analyst at Evercore Partners, agreed. “Waiting for the chipset is a contributing factor in a number of factors that led to the delay,” he said. “Creating the ecosystem for the phones is the bigger problem.”

Mr. Shah and several other analysts said that delays in the development of BlackBerry 10 and poor battery performance in prototype versions of the new phones were behind the decision to further delay production until faster, smaller and more power-efficient chips became available in late 2012. Those delays made it impossible for RIM to begin selling the new phones early in 2012, as it first promised.

“One of the problems is the delay in the BB 10 software and that may have led to the selection of chips that caused the most recent delay,” said Rod Hall, an analyst with JPMorgan Chase.

While the analysts’ skepticism is partly based on speculation, it has also been fueled by RIM’s general loss of credibility with them. For more than a year, the company has been forced to repeatedly restate financial forecasts and failed to deliver some critical, new products on time.

“They don’t have a firm grasp of the issues and realities of bringing these phones to market,” said Colin Gillis, an analyst with BGC Partners. “There are not many believers right now,”

RIM has declined to identify the new chip. RIM also declined to comment directly about development problems with BlackBerry 10 or the battery life of the new phones.

It reiterated the earlier remarks of its co-chief executives, Jim Balsillie and Mike Lazaridis, that the delay was simply the result of its decision to wait for an improved chipset. “RIM made a strategic decision to launch BlackBerry 10 devices with a new, LTE-based dual core chipset architecture,” the company said, referring to a chip that supports a high-speed wireless service known as LTE that is now available in some parts of the United States. “As explained on our earnings call, the broad engineering impact of this decision and certain other factors significantly influenced the anticipated timing for the BlackBerry 10 devices.”

But it is no secret that RIM has been struggling with its new operating system, which is based on technology from QNX Software Systems, a company based in Ottawa that RIM acquired in 2010.The BlackBerry PlayBook, RIM’s money-losing tablet computer, was the company’s first product to use a QNX operating system. Despite the BlackBerry brand’s strong association with e-mail, it arrived in April 2011 without e-mail software or the ability to directly synchronize users’ address books and calendars.

Software that was supposed to remedy those issues and others has been delayed and is now promised for February.

Mr. Misek, said that RIM initially tried to merge, or thread, some of its current operating system with QNX to speed up the development timetable. But that proved unsuccessful, forcing RIM to create more software code from scratch than it initially anticipated.

Michael Morgan, the senior analyst for mobile devices at ABI Research, said that many problems with BlackBerry 10 came from making it work on RIM’s network, which moves all BlackBerry data, giving corporate e-mail a high level of security and all users lower wireless data bills.

To accommodate people with both BlackBerry phones and PlayBook tablets, RIM had to redesign security features on its network, which currently allow only one hand-held device access to any given user’s account, Mr. Morgan said.

“When you change something that low level in an operating system, it has ramifications which affect every function,” Mr. Morgan said.

Like many analysts, Mr. Morgan also says he thinks that RIM is struggling to bring the long battery life that has been a hallmark of BlackBerrys to the new phones.

While the QNX operating system has a reputation for reliability, he said, it has been mainly used in situations where power consumption is not a significant concern. Many touch-screen navigation and control systems in cars, for example, use QNX. But automobiles carry large batteries and alternators that recharge them.

When ABI’s researchers disassembled PlayBook tablets, Mr. Morgan said, they found several systems to reduce power consumption. He said, however, that those measures might not be enough for phones that will have much smaller batteries than the PlayBook. “QNX is being applied now in a place it hasn’t been before,” he said.

Adding to the problem is RIM’s decision to make the new phones operate on LTE networks. Most current chips that operate on those high-speed networks have a reputation for quickly draining batteries.

While LTE networks are relatively scarce today, they are likely to be an important selling point for new phones a year from now.
A version of this article appeared in print on January 4, 2012, on page B1 of the New York edition with the headline: Analysts See Performance Issues Behind RIM’s Delays.

[Lead_Express]

Speculation, perhaps, but it makes sense to me. This also means that RIM wasn't exactly lying about the LTE chip problem.

[sf49ers]

it is what it is people and RIM will hang in for a lot longer than most stupid analysts think, sometimes it is better to step back analyze your priorities and then move ahead ..BB10 FTW.

I couldn't understand how people overlook what's going to come in BB10, for example

1) Super Fluid interface as in Playbook and reworked home screen and notifications by Tat
2) Tat magic with subtle animations as seen in Photos app in the Playbook, I can't help myself but imagine how Tat will weave their magic into the videos and music apps in BB10. The free fall photo (grouping) animations shown at Devcon is simply amazing with some nice animations.
http://www.youtube.com/watch?v=vwRcr...layer_embedded
3) Again the fluid email interface done by Tat and the backend integrated with RIM's nervous system (NOC) - Security, Push, data efficient n/w
4) Super nice browser powered by Torch mobile (already it has leading HTML5 scores and first mobile browser to have WebGL support)
4) Contacts synchronization powered by Gist
5) Calendar synchronization powered by Tungle
6) Security baked tight by Certicom
7) Cloud storage powered by Newbay
8) Webworks tooling by TinyHippos
9) Cool tools like video editors powered by Jaycut
10) QNX running the whole show chugging mutli-processor cores and providing real multi-taking.
11) RIM's NOC, BBM, Security
12) 28nm Dual Core SOC will enable RIM to produce a phone as thin as 7mm
13) Also will have video chat and front facing cameras

Playbook has 40%-50% of the work cut out already and most of the NOC integration is already in the works in the form of OS 2.0

We already have some nice games on Playbook, come Playbook 2.0 we might see some more nice titles like Cut the Rope etc. Also Video store is coming as part of 2.0, so do DNLA. Android AppPlayer will bridge a lot of that until BB10 has a full fledged native ecosystem. I can't help myself but think what would be failure chances of BB10, they will have all the features what we were clamoring for years and RIM has money to market them like crazy. If RIM can move 14 million units/quarter something based on old technology what makes people think that they can't move something better.

[Brianflys]

The story says it is based on speculation and somehow also based on general lack of RIM credibility. So from that biased basis, the writer leaps recklessly to the conclusion that there are performance issues with the OS. This is just another hit piece on RIM, with no facts to support the claim of performance issues. The writer doesn't even hint they have seen the operation or spoken to anyone who has firsthand knowledge of BB10 beta operation.

Apparently journalism no longer requires facts, just opinions and biases. The OP story is worthless, but will be parrotted repeatedly by other incompetent media. And they have the b@lls to call RIM incompetent.

[rickbansal]

Originally Posted by Brianflys

The story says it is based on speculation and somehow also based on general lack of RIM credibility. So from that biased basis, the writer leaps recklessly to the conclusion that there are performance issues with the OS. This is just another hit piece on RIM, with no facts to support the claim of performance issues. The writer doesn't even hint they have seen the operation or spoken to anyone who has firsthand knowledge of BB10 beta operation.

Apparently journalism no longer requires facts, just opinions and biases. The OP story is worthless, but will be parrotted repeatedly by other incompetent media. And they have the b@lls to call RIM incompetent.

RIM needs to stop these types of reports by delivering products on time and better than advertized. There are way too many reports out there for us to ignore as just "biased journalism". BTW, RIM only has themselves to be blame because they have consistently missed delivery dates and expectations. Perception is reality (unfortunately) and the perception today is that RIM management is totally incompetent - although that also seems to be reality given their recent performance.

[dandbj13]

Does anyone know if BB10 will run on current devices?

[berklon]

It may be speculation, but going by history - it's probably based in reality.

All RIM has to do to counter these articles is give us a demo of a BB10 phone. So far we've seen absolutely nothing from them.

This is where adopting another OS concurrently as a backup plan would make a lot of sense. If QNX is a bust on their phones, they can't afford to waste more time starting from square 1 - and they can't keep using BB7 as it's dated by at least 3 years.

Hard to imagine, but 2012 is shaping up to be a worse year for RIM than 2011 was.

[rickbansal]

Originally Posted by dandbj13

Does anyone know if BB10 will run on current devices?

RIM has consistently said NO to that. QNX will need a dual-core processor to run.

[emirozmen]

God knows when this will come out, we know the earliest date is Q3 2012.

[Derwent Graphite]

Originally Posted by Brianflys

The story says it is based on speculation and somehow also based on general lack of RIM credibility. So from that biased basis, the writer leaps recklessly to the conclusion that there are performance issues with the OS. This is just another hit piece on RIM, with no facts to support the claim of performance issues. The writer doesn't even hint they have seen the operation or spoken to anyone who has firsthand knowledge of BB10 beta operation.

Apparently journalism no longer requires facts, just opinions and biases. The OP story is worthless, but will be parrotted repeatedly by other incompetent media. And they have the b@lls to call RIM incompetent.

No offense but.. did you even read the entire article? You're as biased yourself if you didn't.

While what I read in the article is mostly speculation, it isn't baseless speculation. Is it not a fact that RIM has trouble getting native e-mail on the PB? Is it not a fact that RIM is facing NOC integration aside from BBID issues?

As for the battery issue, I think it's overblown. The PlayBook is pushing higher DPI than the iPad 2 with a smaller battery (5300mAh vs 6930mAh) yet both are on par in battery life. If Apple can put iOS 5 which runs on the iPad 2 onto iPhone 3GS/4/4S (~1200-1400mAh) and still achieve decent battery life, I don't see how it's so hard for RIM. That's my gripe with the article - the QNX os is already applied in a place it has never been before. It's called the PlayBook.

I believe both Apple and RIM have somewhat the same concerns about power-sucking LTE networks. RIM waiting for a more efficient chip is entire plausible.

[Derwent Graphite]

Originally Posted by dandbj13

I find that shocking! That is going to leave a lot of orphaned devices with two and three year contracts that are ineligible for the new hotness. That can't be right!

It's nothing new really. It's pretty much the norm for most other OSes as well. Apple iOS is the only exception though.

[app_Developer]

Originally Posted by dandbj13

I find that shocking! That is going to leave a lot of orphaned devices with two and three year contracts that are ineligible for the new hotness. That can't be right!

That's why people expect Q2 and especially Q3 to be a little tough. People should be less likely to buy higher end BB7 phones (especially with contracts) in the months leading to the new BB10 phones.

[berklon]

Originally Posted by emirozmen

God knows when this will come out, we know the earliest date is Q3 2012.

While Q3 can be considered "Late 2012" (as RIM stated), I think it's a guarantee that it'll be out no earlier than Q4... and even then, it'll probably be late November or early December.

Sadly, I suspect that it'll either be pushed back Q1 2013, or hit their announced late 2012 date but it'll be unfinished and have many issues.

[BB.David]

If the PlayBook OS is any indication of how the BB 10 will be like I'm not surprised it's no where near release. I realize they're doing a massive transsion I just wished they would speed things up. But the OS is just too plain.

- No App integration within the OS. One the app window is closed its useless. One example is the Podcast app. Nothing will download unless you have the actual window open.
- You can't minimize Apps (without closing the app) to reduce real estate clutter.
- Notification system is basically non existant. I've yet to see an App to give you this aside from BB Bridge. One example is Scores Mobile. No push updates of the latest scores.
- No profile sound and LED settings. I'm guessing BB 10 will go the iOS and Android route of an On or Off + basic volume setting.
- No official Twitter app. Really?
- Facebook app is built by RIM, not Facebook. Why is this?

Reminds me of iOS 1.0 or Android 1.0 where it just a nice looking OS and a good browser but that's it. I'll take BB 7 over QNX - right now at least.

[Palmless]

Originally Posted by app_Developer

That's why people expect Q2 and especially Q3 to be a little tough. People should be less likely to buy higher end BB7 phones (especially with contracts) in the months leading to the new BB10 phones.

A little tough. That's about right. A little tough. Q2 and especially Q3 will be a little tough. I guess it's a matter of degrees.

In the post mortem, the half-CEOs lack of understanding of the Osborne Effect will probably be the final nail in the coffin.

If you are an outsider, this is glaringly obvious. The Ottawa fellas had to live in an echo chamber for many years to wear down the sensors that would have prevented this horrible move.

For the next nine months (at a bare minimum), how could anyone BECOME a NEW blackberry user? I'm not talking about upgrades... how could someone look at a phone and say "Hmm, it's a little more than an iPhone or an Android, it does a little less, it's not selling very well, I hear the company is in trouble, I've never used one and have no emotional or experience investment, and the manufacturer says it is not part of their future... I'M IN, where is that two year contract?!?!?!".