RIM: yet more losses, job cuts, BlackBerry 10 delayed until Q1 2013

By Lee Kaelin on June 29, 2012, 9:00 AM

Research in Motion's situation has taken another dramatic turn after last night's earning call to investors revealed its urgently needed and potentially lifesaving BlackBerry 10 OS will be delayed. The Canadian firm also reported huge losses for the first financial quarter and another round of layoffs affecting 5,000 workers.

RIM reported a first-quarter loss of $518 million, or 99 cents a share, its worst loss since 2003. Sales revenue was $2.8 billion, down 33% from its first quarter's $4.9 billion figure twelve months ago. All told, the company shipped 7.8 million phones during the period, and 260,000 PlayBook tablets despite heavy price cuts.

"This was a challenging quarter. I am not satisfied with the financial report we are giving you today," said CEO Thorsten Heins on a conference call with investors. "I understand this is an incredibly difficult message to deliver, but it is necessary to change scale and refocus the company on areas of highest opportunity."

Newly appointed CFO Brian Bidulka said the outlook for the next few quarters will be very challenging due to the increasingly competitive environment and expects another operating loss in Q2 of fiscal 2013.

It is indeed sad times for what was once one of Canada's best exports, which due to lack of innovation and faster paced rivals are increasingly becoming more of a spectator in the phone market. RIM widely bills BlackBerry 10 OS as the answer to their increasing problems, but the delay to at least the first quarter of 2013 due to the "challenge of making it ready for global release" and a "long integration process" has done nothing to help the situation.

"These issues are not related to quality, [but] it has become clear a schedule working towards this calendar year is no longer realistic," said Heins, who maintained the mobile OS remained the company's highest priority. He continued, "I will not deliver a product to the market which is not ready to fulfill the needs of our customers [and] there will be no compromise on this issue."

The fact that the next-generation handsets running this new OS will be aimed purely at the high-end of the market directly against established and market-leading phone makers like Samsung with its Galaxy S3 and Apple with its iPhone 4S (and the yet to be released iPhone 5 rumored for October) is another huge problem. Frankly speaking, RIM faces an uphill battle of Mt. Everest sized proportions to achieve any success.

If this wasn't enough to contend with, Heins also reported that further company restructuring would see 5,000 jobs, around one-third of RIM's workforce axed at a one-time cost of $350 million.

Shares sank sharply upon hearing the news, finally settling at a 17% drop to $7.75 during after-hours trading. That places the company's value at less than $4 billion and is a stark reminder of the peril RIM currently faces.




User Comments: 10

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lawfer, TechSpot Paladin, said:

Research in Mourning.

It's over. The iPhone 5 will come in October, just like the new Windows Phone 8 hardware. Windows 8 and Lion will also have aligned releases; Microsoft and Apple will push these two ecosystems really hard. I really don't see how will RIM make a come back months and months as after all this. Especially considering we'll be seeing quad-core Windows Phones, and the new Nexus phone with Jelly Bean will be out by then.

Leeky Leeky said:

Aye, I cannot for the life of me understand why RIM would want to push BB10 against the iPhone 5, Windows 8 or the heap of quad-core flagship Android smartphones running 4.1 by the time they even launch a phone. Its just going to be a massacre of giant proportions.

If RIM wants to survive it HAS to get budget and mid-range handsets out worldwide as well as top-end versions. It'll never beat the established iOS/Android ecosystems, it doesn't stand a chance. And if they want that to work, it MUST release BB10 in these market segments.

I just don't get it.

Guest said:

This is what append when you sit back and watch the future unfold in front of you without doing anything. Bye Bye RIM.

Guest said:

yep! exactly what the guest above said. They sat on their hands and thought no one could touch them...well, they were wrong. Because of that they're no longer relevant.

1 person liked this | lawfer, TechSpot Paladin, said:

Put this into perspective:

Apple has released almost SIX iterations of iOS, Android EIGHT, and Windows Phone FIVE (I consider putting the 20 year old Windows NT kernel in a phone worth two releases), and RIM has only released the mediocre BB 7 a year ago.

We are talking about 4 to 5 years since the iPhone was unveiled of little to no development. What the hell have they been doing? Now they need another year to make BB10 competitive. And what's funny is that even after it's released, new iterations of the aforementioned platforms will be on the pipeline.

Guest said:

In my country, blackberry is a must if you don't want left by society (sigh)

I know it's silly, but it's a fact.. without BB then you would be labeled as "you're so yesterday", and they DIDN'T know that BB (maybe) is on the brink of death.. *LoL

Guest said:

yawn.

I'd take my "boring / yesterday" BB handset any day over new "rubbish" being pushed by "innovators".

Than you very much.

Guest said:

Google and Apple have yet to master the art of corporate deployment & management, having a BES server linked to your Exchange server and be able to issue handsets very quickly with the same software and settings on it is a big plus for weary IT departments -- deploy iPads one at a time and must link to iTunes for downloads/updates/everything (open up firewalls to access iTunes servers). No thanks, I'll stick with BES/RIM until something proper comes along, or I have no choice if they fold/leave the business.

Closed eco-systems are not what businesses want.

Guest said:

It's articles like this which spread FUD and talk companies like RIM into a decline.

supertech supertech said:

I'm a stockholder in this company and highly disappointed and see no future @ RIM. No new innovation and continued lack of new products and delays after delays.

I love my iPhone and think it is one of the best products in the market.

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