RIM Bets It All on QNX

RIM is betting on a line of QNX super-phones to turn around its fortunes after poor sales of BlackBerry OS 7 devices.

The Waterloo, Ontario-based company’s QNX operating system is slated to debut early next year with the BlackBerry Colt. RIM says the platform will compete with iPhone and Android powered devices, but with BlackBerry OS 7 devices selling poorly, the company’s bridge to QNX may be collapsing.

The company’s profit for the second quarter fell 47 per cent to $419 million, on revenue of $4.2 billion.

Underwhelming sales of devices like the Torch 9850 and Bold 9900 will impact its end-of-the-year numbers. RIM shipped just 10.6 million smartphones in the second quarter, as carriers struggled to sell year-old devices with limited processing power compared to newer rival products.

The company only has QNX to right its ship, as investor support continues to dwindle fast.

Co-CEOs Jim Balsillie and Mike Lazaridis hoped OS 7 devices would transition the company while it finished working on QNX-based handsets, but despite “having an excellent reception,” according to Balsillie, they’re not enough to ease shareholder concerns.

The failure of OS 7 places pressure on RIM, and a similar failure of QNX-based devices may likely force the it to sell itself or its patents to survive, something investors urge the company to do. Since RIM’s survival so clearly depends solely on the fate of QNX, the company may have to do something drastic to ensure its success.

RIM may postpone QNX even further, taking time to work out kinks while incurring further financial loss and criticism. Or it may push the product to market before it’s ready and hope consumers will be patient while it works on an update.

Both roads are risky for the BlackBerry maker, but even if QNX arrives on schedule early next year, it may come without support for BlackBerry Enterprise Server, leaving business customers without e-mail functionality. Analysts also believe a full transition to the platform won’t be completed till the end of 2012.

The pressure RIM faces from investors turns a tough situation into an unmanageable one. The company has to be sure it makes all the right decisions going forward, because it can’t afford another bad one.

This post originally appeared at Mobiledia.

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