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Storm clouds gather for RIM after profit warning

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Like the little boy who cried wolf too often, BlackBerry maker Research In Motion (RIM-T) has to prove it really can deliver on ambitious promises about its next generation of gadgets.
   
RIM on Thursday slashed its sales and earnings forecasts, a third body blow in just over a month after an anemic forecast in late March and the troubled launch of an as-yet underwhelming competitor to the red-hot Apple iPad last week.
   
Its shares shed some 13 percent early on Friday, in line with a late-trade fall on Thursday and an eerily similar drop to that after its March results.
   
"We've heard for too long about RIM's great product roadmap. Consumers are not listening nor waiting," National Bank analysts said in a note. "RIM does not even seem to have dual cameras on its upcoming BlackBerry product line-up. The last time we checked, video is the future."
   
Thursday's after-market warning focused on weak sales of RIM's aging smartphones in the United States and Latin America, and the company lowered an already tepid outlook for the current quarter.
   
All hope seems to now rest on what the Canadian company pulls out of its labs and onto centre stage at a Florida trade show, BlackBerry World, starting Monday, where the company will unveil a new generation of touch-screen BlackBerrys.
   
Expectations are low.
   
NO TURNAROUND
   
Analysts said consumers are tired of waiting for RIM's innovations to kick in, and were "voting with their dollars," spending much of them in Apple stores and on Google's Android platform.
   
RIM had hoped to turn that around with the later-than-expected launch of its PlayBook tablet—a sleek compact computer that runs on a fresh QNX platform that RIM says will transform its business.
   
But the PlayBook won dismal reviews and complaints it was rushed out before it was ready, despite a six-month launchpad.
   
"Misexecution has undermined sentiment recovery," wrote  Mike Abramsky, a longtime optimist on RIM, who kicked RIM out of his preferred list of stocks and slashed his target price to $55 from $90.
   
"PlayBook is a promising tablet contender, but RIM bears some responsibility for its less-than-favorable debut, confusion over its positioning and criticisms it was not fully ready for market," Abramsky wrote.
   
Customers and developers are eager to know when the PlayBook will run Android and BlackBerry smartphone applications, while investors want to know how many PlayBooks sold in the first week and when better phones will ship.
   
LOST FAITH
   
Jefferies analyst Peter Misek dropped his rating by two notches to "underperform" and cut his price target to $35 from $80. He said RIM was scrambling to fix glitches in the PlayBook and integrate QNX, likely leading to delays for new handsets and flagging interest from carriers.
   
RIM has tried to shift attention to what comes next—a suite of phones running an upgraded (but not yet QNX-based) operating system with beefed-up hardware.
   
"We're cutting over to a whole new platform, a whole new set of products, a whole new set of architecture. And it's very, very powerful and very, very exciting," RIM's Co-Chief Executive Jim Balsillie told a conference call on Thursday.
   
"Stay tuned, the products are truly fantastic both in terms of their style and their performance. The issue is, I would have liked to have them sooner."
   
The sliding stock price shows that the market is yet to be convinced.
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