Not quite, says Wedbush Securities analyst Scott Sutherland.
In a note to investors on Wednesday, Sutherland said that based on his channel checks, RIM will sell only 450,000 PlayBooks by the end of the quarter. That's not far off the 500,000 number, but it's enough to cause Sutherland to reduce his target price for RIM's stock from $55 to $49. Sutherland also cut his revenue estimates from $5.2 billion to $5.1 billion.
Further, Sutherland first believed RIM would sell 3 million PlayBook's by the end of its current fiscal year. Now he doesn't. He's cut his forecast for yearly sales by 23% from 3 million to 2.3 million.
What's got Sutherland so concerned? He says the small screen is playing a role, and the overall "lack of appeal will limit consumer adoption," he wrote. The PlayBook has a seven-inch display, while competitors such as the iPad, Motorola Xoom, and Samsung Galaxy Tab 10.1 have screens reaching to 10 inches.
Another problem is the BlackBerry Bridge application. The Bridge app is necessary if PlayBook users want to access basic features such as email, contacts, and calendar. Even with Bridge installed, PlayBook users also will need to have a BlackBerry and tether it via Bluetooth to transport their email from the handset to the tablet.
While Sprint, T-Mobile, and Verizon Wireless are supporting the Bridge application, AT&T is not. That means BlackBerry users on the AT&T network can't use Bridge and don't have any access to email, calendar, or contacts on their PlayBook at all. That's a significant roadblock, and one that AT&T doesn't seem to be in a hurry to remove.
Beyond the PlayBook, Sutherland also notes the lackluster lineup of BlackBerrys available at the moment in his decision to reduce RIM's outlook. RIM has offered little more than incremental updates to its hardware lineup the last year or so, leaving its devices a little "long in the tooth" when compared to the high-end Android devices flooding the market.
"That said, as the buying decision continues to shift to the consumer, we still do not see the revolutionary upgrade that will alter the competitive gains seen by smartphones coming from Apple and Android vendors," Sutherland concluded.
RIM, however, contends that the PlayBook is selling just fine.
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