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RIM Hires Advisors To Decide Fate Of Company

[By Sudarshana Banerjee]

Research in Motion (RIM) has engaged J.P. Morgan Securities and RBC Capital Markets to assist the company in reviewing RIM’s business and financial performance.  The advisors will help the company with its strategic review. RIM says it is evaluating the relative merits and feasibility of various financial strategies; including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and  alternative business models.

RIM says there will be significant spending reductions and headcount reductions in some areas throughout the remainder of the fiscal year, but will also continue to spend and hire in key areas associated with the launch of BlackBerry 10, and the growth of its application developer community.

RIM’s senior management team gets two new members – Kristian Tear, the company’s chief operating officer, whose background also includes experience in international sales in Europe, Asia and Latin America, and Frank Boulben, its chief marketing officer. They will assist Mr. Heins and the existing executive team.

A business update on the company’s strategic position and future direction was provided by Thorsten Heins, RIM’s president and CEO. The company is no longer giving quantitative financial guidance, but says will provide regular updates.

Thorsten Heins (President and CEO, RIM): RIM is going through a significant transformation as we move towards the BlackBerry 10 launch, and our financial performance will continue to be challenging for the next few quarters. The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter.

There are currently over 80,000 Blackberry apps, which represents a 220% increase from one year ago, and more than 15,000 apps for PlayBook compared to less than 2,000 last year, says the company. The BlackBerry 10 mobile computing platform is scheduled to launch in the latter part of calendar 2012.

RIM’s global subscriber base grew this quarter to approximately 78 million, driven primarily by growth in international markets. This is offset by high churn in the United States. The BBM user base has grown to approximately 59 million users globally, says Mr. Heins.

RIM says it expects to further increase its cash position in Q1 from the approximately $2.1 billion it had at the end of fiscal 2012.

 

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