RIM misses on revenue, delays products and plans layoffs

By on June 17, 2011, 10:00 AM

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.

User Comments: 5

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mario mario, Ex-TS Developer, said:

I'm sure their QNX based OS will be great what I'm not sure about is if people will still be interested in owning BB or if RIM will still be a major player when they finally release it on a phone, which is of course -I would safely assume- their primary revenue source.

In the last 3-5 years their primary innovation has been on minor HW updates for their phones and making them thinner and lighter, while other companies have been innovating a lot in software and touch interfaces.

In my opinion RIM made a really big mistake by focusing a lot of their resources on the Playbook and leaving their smartphone business on a lesser priority. It is no secret that the tablet market is non-existent compared to the phone business. And today there are no incentives to chose a Blackberry over an Android or iOS phone, well only if you need or are addicted to BB messenger as I am *hides face in embarrassment* :P.

Guest said:

I never understood the obsession with BBM chat. Are people still 13 year old that they need to group chat? Or are they trying to save $ on text messaging? If the latter, just get Whatsapp. With the Iphone you also get to see your entire message history with the person you are texting with.

Blackberry is only good for the corporate sector where you need the best network security (and because "suits" are too slow to adopt modern technology and too risk averse to abandon what they know).

For the average consumer though Blackberry fails on all accounts. They don't offer sleak looking, thing phones, they have small screens which makes them useless for watching movies/videos/or browsing the internet, their hardware is slow (no dual core, no high end GPU), their OS is not customizable and has no widgets, quality app store?

In other words, if you want a phone with multimedia functionality, there is no way you'd choose a Blackberry over Android or iPhone device.

aspleme said:

Those of us back in 2011 appreciate the information about RIM's 2012 revenues... but perhaps the timeline would be safer if we didn't have that information?

Guest said:

RIM is a has been.....Can't wait to dump my blackberry storm.

princeton princeton said:

aspleme said:

Those of us back in 2011 appreciate the information about RIM's 2012 revenues... but perhaps the timeline would be safer if we didn't have that information?

I lol'd.

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