RIM Collapsing? BlackBerry Sales Drop 43% in a Quarter
Canadian tech giant Research in Motion, the beleaguered maker of BlackBerry phones and tablets, suffered what was arguably its worst hit yet Thursday.
The company revealed that sales were down a stunning 43% on the previous quarter — a loss per share of 28 cents.
How bad is that? Analysts, prepared by abstract warnings of bad news from CEO Thorston Heins, had been predicting dire outcomes, but few had gone higher than a 14 cent per share loss. The average was a 3-cent loss. (The company halted trading Wednesday afternoon before the earnings report was released; shares slid 18% in after-hours trading.)
RIM's share of the global smartphone market had dropped by half in the first quarter, according to analysts. To get itself back on track, the company says it has to save a billion dollars by slashing around 5,000 employees.
And if it was possible for the news to get worse than that, Heins also revealed that the company's saving technological grace — its BlackBerry 10 smartphone line, a much-needed reboot of the BlackBerry OS that has garnered tepid praise so far — would not arrive until 2013. He had previously pegged its arrival to the latter half of 2012.
But might that be too late? The company has one small factor on its side, at least: management isn't sugar-coating how much trouble it's in.
"I am not satisfied with these results," said Heins, "and continue to work aggressively with all areas of the organization and the Board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the company on areas that have the greatest opportunities."
That could be the sign of a sincere rethink of its disastrous strategy to avoid the consumer market (which is driving the enterprise market for smartphones now, not vice-versa as it was in RIM's heyday.) Or it could be the kind of business crisis jargon Heins thinks shareholders want to hear.
Splitting itself in two, as the company is reportedly thinking of doing, is a high risk strategy.
One thing is clear about its future: RIM cannot endure many more quarters like this without being permanently sidelined in the smartphone game.
Can anything save BlackBerry? Should it split itself up, or consider a fire sale to a smartphone-hungry company like Microsoft? Let us know your thoughts in the comments.
Image courtesy of iStockphoto, serts
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13 Comments to RIM Collapsing? BlackBerry Sales Drop 43% in a Quarter
by BradMadiuk
On June 28, 2012 at 5:07 pm
I've never touched a blackberry I've liked.
by hassanwapo
On June 28, 2012 at 5:14 pm
Samsung injunction against Apple appeals Galaxy tab
>> http://goo.gl/NjRwT <<
by Aziz Gilani
On June 28, 2012 at 5:15 pm
I have said ti before, but will repeat, Blackberry will either be bankrupted or acquired before BB10 is ever released.
by glasto_biz
On June 28, 2012 at 5:15 pm
The company I work for are shedding their blackberry's for iPhones, most other companies I know are doing the same.
RIM didn't keep ahead of the game, it didn't change when iPhone landed or when Android landed, it thought it was secure, but it's technological stance was and still is behind the times
Blackberry10 would have to be something far more advance than either Apple or Google and get the software developers behind it….sorry RIM, that's not going to happen now
RIP Blackberry – Good in it's time, never kept up
by Jason Kirschner
On June 28, 2012 at 5:51 pm
I think they are done and it'll probably be both bankruptcy and fire sale. Two problems with Blackberry.
1. They've had several years of watching the rise of Android and iPhone and should have taken better steps in understanding what consumers want out of phones right now rather than relying on what made them popular in the first place.
2. Everyone else is offering more robust services that rival, equal or beat what Blackberry has to offer.
by Rd Berain
On June 28, 2012 at 6:11 pm
I have never touch a blackberry period!
by Brian Rich
On June 28, 2012 at 6:26 pm
I love my Blackberry Torch. I just saw a colleague's Droid 2 the other day and in trying to help her change the vibrate settings, I realized Droid 2?s didn't even ship with sound profiles, and you couldn't control the type of notification you got for incoming messages from various sources (BBM, text, email, etc). My Blackberrys have had the ability to control every type of notification since I got my Curve in 2008. Every time I use an iPhone or Android I find 2-3 things I like on Blackberry better. It's all about marketing, that's the only real difference.
by Sohrob Tahmasebi
On June 28, 2012 at 6:45 pm
You can do all the things you've described on an iPhone. And sorry, doing things like that while nice, doesn't make for a great user experience. The last time I owned a BlackBerry I hated the shitty screen and web browser and the lack of integration for a lot of other things I wanted to do. BlackBerry app market was also worthless.
by twasserman
On June 28, 2012 at 7:40 pm
I can see the fat lady warming up her vocal cords. Soon it will be time for her to sing about RIM.
by TattoozNTech
On June 28, 2012 at 9:09 pm
http://www.quickmeme.com/meme/3pwm9n/ <- nuff said.
by dustinandrew
On June 29, 2012 at 12:39 am
RIP
by Michael Allen
On June 29, 2012 at 12:49 am
Punch out rim just punch out
by Jason Bradshaw
On June 29, 2012 at 1:26 am
BlackBerry shouldn't be delaying product innovation instead they should get crystal clear and focused.
1 – Launch BlackBerry Cloud – providing all the wonders of enterprise server but in the cloud with a simple interface that meets consumer and small business needs.
2 – Launch the New Blackberry Handset – a high end full touch consumer focused device and launch the New BlackBerry Pro – a high end corporate focused device with keyboard and touch screen. Kill all other products.
3 – Launch either a new amazing BB OS and pay/entice developers to port their apps to BB OS OR and this is radical. Kill of BB OS and do what Amazon did and build upon Android to have BB powered by Android then they have 400,000 apps and can play to their strengths BB Secure Messaging (email).
4 – Leverage their history as the premier secure messaging platform and release BB Messaging for iOS and Android meaning that every corporate can accommodate those BYOD people and still have the sense of security BB is famous for (was famous for).
In my opinion they have to act fast and now, not delay.