Things are not looking too hot for Research in Motion in the smartphone and tablet markets. Although the BlackBerry maker saw 2012 fiscal first quarter revenues grow 16% year-on-year to $4.9 billion, profits fell 9% to $695 million during the period, and on a sequential basis it was markedly worse: sales fell 12% and profits 25%.
The slowdown seen in the first fiscal quarter is continuing into the next, according to the company, which warned that new product introductions will be delayed until the very late part of August -- well into the valuable back-to-school shopping season.
As a result, RIM cut its earnings expectations to between $1.30 and $1.37, from the previous $1.47 to $1.55, and said revenue would be "slightly below" the range of $5.2 billion to $5.6 billion that it had predicted earlier.
The Canadian company said it now expects its full-year profit to be as much as 30% below its initial target, estimating it would earn between $5.25 and $6 per share for fiscal 2012. Not surprisingly shareholders responded by taking RIM's share price down nearly 20% to $29.50 at the time of writing. The stock has lost 39% of its value this year.
The company said it shipped 500,000 PlayBook tablets last quarter after starting sales on April 19 -- which means it sold even less than that. Even so RIM co-CEOs Jim Balsillie and Mike Lazaridis defended the decision to rush the product out without many of its emblematic features, pointing at plans to tighten the device over time with OTA updates. They also suggested that the work on its QNX-based platform, for both tablets and phones, will be worth it in the long run.
The company also announced that it would begin a program to streamline operations across the organization. This will include the reallocation of resources to focus on areas with high growth opportunities, and a headcount reduction to eliminate redundancies -- which is always a tough decision for CEOs… and RIM has two of those.