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RIM Posts Wide Loss, Blackberry 10 Delayed

[Techtaffy Newsdesk]

More bad news on the Research In Motion (RIM) front.  Launch of the BlackBerry 10 smartphone is now pushed to the first quarter of 2013; several months later than the anticipated Fall launch. The Blackberry 10 was being widely perceived as the drowning company’s last straw, but now even that glimmer of hope seems to be lost. In the fast-changing world of cell phones, the Blackberry 10 may become obsolete even before it hits retail shelves.

The delay is not only disappointing investors with RIM stock further tumbling down, but the developers as well.  Just to give you a perspective, the BlackBerry App World has around 89,000 applications available, whereas Google Play boasts of some 600,000 apps and games. Apple’s app store crossed the 500,000 mark last year.

RIM reported a net loss of $518 million, or 99 cents a share, compared with net income of $695 million, or $1.33 a share, for the same period last year.  Revenue of $2.8 billion in Q1, was down 33% from $4.2 billion in the prior quarter. 7.8 million BlackBerry smartphones were shipped, a sharp drop from the 13.2 million units shipped in the same period last year. Approximately 260,000 BlackBerry PlayBook tablets were shipped. The revenue breakdown for the quarter was approximately 59% for hardware, 36% for service and 5% for software and other revenue; yet another indication that phone sales are falling.

Thorsten Heins (President and CEO, RIM):   I am not satisfied with these results and continue to work aggressively with all areas of the organization and the Board to implement meaningful changes to address the challenges. Our top priority going forward is the successful launch of our first BlackBerry 10 device.

There are a couple of good news. Overall BlackBerry subscriber base continued to grow, and the subscriber base grew in all regions, except for North America. Restructuring efforts are underway at the company, that are expected to realize over $1 billion in cost savings, based on RIM’s Q4 FY2012 run rate. This restructuring will come at a cost though, RIM is axing 5,000 jobs.

RIM shares fell sharply, trading in after-hours at $7.71 at the time of writing, down 15.55%.

Blackberry has a subscriber base of approximately 78 million, and a robust network architecture in place. If only the company could build some new phones!

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