RIM back to the drawing board after another bad quarter

Monday 2 April 2012 | 15:21 CET | Market Commentary

Research In Motion has again reported disappointing quarterly results. The company will look at what options remain, but little seems to point to a recovery, raising the chances of a takeover of the BlackBerry maker. 

No one had really expected a fresh start for RIM this year. The appointment of a new CEO appears to be in vain, after the company reported disappointing results for the last quarter still under co-CEOs Mike Lazaridis and Jim Balsillie.

RIM recorded quarterly revenues of USD 4.19 billion, down by a quarter from a year earlier. Analysts expected sales of USD 4.51 billion. The net result deteriorated to a loss of USD 125 million, versus a profit of USD 934 million a year ago. The company sold in total 11.1 million BlackBerry phones, down from 14.1 million in the previous quarter. It also shipped over 500,000 PlayBook tablets, more than analysts expected. 

The poor results came with the announcement that more senior executives are leaving the company under the new CEO Thorsten Heins, who took office at the start of his year. Balsillie is stepping down as board member, and CTO David Yach is leaving the company after 14 years. COO Jim Rowan is also exiting to pursue opportunities elsewhere. It appears RIM's captains are abandoning ship now that the company, after months of muddling along, must take some serious decisions about its priorities.

With the reorientation RIM is going back to its roots: the business market. Heins backed this up by announcing that RIM is stopping or shifting to partners all projects that do not directly deal with business, security or BlackBerry Messenger. This implies a signal to the market RIM had hoped to play such an important role in: the consumer market. Unfortunately for RIM, the competition (Apple + Android partners) had other plans. Heins also said the possibility of licensing the BlackBerry platform is still under consideration. 

But the business market does not appear ripe for a pick-up. More the opposite, as the growing trend of employees bringing their mobile devices to the office takes off. The iPhone and Android devices are proving more popular than handsets offered by employers. 

All its good intentions aside, RIM's presentation of the latest quarterly numbers has again raised speculation of a possible sale of the company. Rumours in the past have pointed to Nokia/Microsoft and Amazon as possible saviours for the company.  The possibility appears increasingly likely that the curtain will come down soon for the former national pride of Canada. 

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