He also things the opportunity for the company to raise capital via asset sales may have already past. And he says that inventories of older BlackBerry phones are beginning to disappear.
"Our checks indicate inventories have begun to decline without any improvement in sell-through," he writes in a research note. "We believe U.S. sales were largely flat month-over-month [in October] amid sporadic discounting; we believe sales in Europe actually declined month-over-month despite aggressive discounting due in part to aggressive postpaid discounting of lower-end Android-based smartphones."
And he sees little hope that BB10, the company's great hope, will improve the situation.
"We expect the new OS to be met with a lukewarm response at best and ultimately likely to fail due to the new and unfamiliar UI, lack of complementary devices, relatively few applications and what we believe to be a general reticence by app developers to develop for the platform," he writes. "Given the critical importance of the coming BB10 ramp, the financial burden of building BB10 devices and the likely increasing pressure on the company’s balance sheet, we believe the time for a sale may likely have already come and gone. We do not expect these products to gain meaningful traction outside of the purest of BlackBerry loyalists." As this scenario becomes clearer to the market, he writes. RIMM shares are likely to slide from here.
In a sharply lower stock market, RIMM is down 62 cents, or 6.8%, to $8.44.
