What next for RIM?
Research In Motion (RIM), the BlackBerry manufacturer, is facing a difficult future as the company announced disappointing Q1 figures, reported in the Huffington Post.
The latest financial statistics, coupled with the news that BlackBerry’s touch screen smartphone, the Blackberry 10, will not be launched until early 2013, has ignited a plethora of comments on the situation the beleaguered telecommunications company faces.
Commentators were quick to offer their view on RIM’s financial figures, which come just days after the company announced it was looking to separate its handset production and messaging operations.
The company’s view
RIM chief executive Thorsten Heins, speaking to the Guardian, said: “I am not satisfied with these results and continue to work aggressively with all areas of the organisation and the board to implement meaningful changes.”
It ought to be pointed out that BlackBerry saw an increase in subscribers, albeit slight, from 70 million to 78 million.
However, sales of BlackBerry phones numbered just 7.8 million, short of the expected 8.74 million handsets that had been anticipated. The expected cut of 5,000 jobs adds to an announcement earlier this year that 2,000 posts would be lost at the Canadian company.
The industry’s take
Earlier today, Reuters expressed fears that RIM, whose prospects it described as “dire”, could be facing a far larger crisis.
Raising the prospect of the company running out of money by the end of the year, in the face of competition from Apple’s iPhone and the large number of HTC Android-powered smartphones on the market, Nomura Equity Research told Reuters: “If RIM continues to be run as it is, we believe that the company will eventually fail.
“We do not expect RIM to successfully drive a turnaround of its financials, even with the launch of BB10 next year.”
Reuters added that according to Nomura’s financial model, RIM faces the prospect of disappearing from the marketplace by 2020.
The media’s opinion
Commenting on the delay to the BlackBerry 10 launch, BBC technology reporter Leo Kelion said: “RIM’s future will be determined by the success, or failure, of Blackberry 10 when it finally launches, assuming the firm is not the subject of a takeover bid first.
“With Apple’s iOS 6, Microsoft’s Windows Phone 8 and Google’s Android 4.1 all due for release before Blackberry 10 emerges, the battle ahead is only getting harder.”
According to Business Insider data, released back in September 2011, shipments of the iPhone began to overtake those of Blackberry in June 2010, and since this point RIM’s sales have continued to fall comparatively.
The delay to the BlackBerry 10 means that RIM will not have an equivalent to the HTC and Apple products for sale until the first three months of 2013, more than five years since the first incarnation of the iPhone was released, back in January 2007.
The financial perspective
Shares in RIM fell by 15.3% after the BlackBerry 10 launch delay was announced, compounding a year in which share prices have dropped by 75%. The company’s net loss, according to the figures, totalled $518 million.
However, according to the Financial Times, RIM believes its losses on handset production are “stabilising”.
Facts and figures
According to TelecomTV data (sourced from Tomi Ahonen Consulting) RIM’s market share has fallen dramatically in the past two years:
Q2 2010 | 18.2%
Q3 2010 | 15.1%
Q4 2010 | 14.3%
Q1 2011 | 14.3%
Q2 2011 | 12.3%
Q3 2011 | 8.9%
Q4 2011 | 9.1%
Q1 2012 | 7.6%
Q2 2012 | 5.0%