The failing Canadian company Research In Motion (RIM), maker of the BlackBerry mobile devices, seems to be intent on doing a Nortel and committing public suicide, as Martyn Warwick reports.
Yesterday, RIM announced, to no-one's surprise, that it is "likely" to make an operating loss in the current quarter - and in future quarters as well. It's the "likely" bit that raises a smile - one assumes that RIM's army of bean counters is proficient enough to determine whether or not the company will record an operating loss over twelve weeks of trading - but, like Billy Bunter, it seems they may be waiting expectantly for a giant postal order from an anonymous benefactor that will put the company's finances to rights in one fell swoop. Dream on boys.
Yesterday, RIM's new-ish CEO, Thorsten Heins, peered blearily over the RIM of his poisoned chalice and croaked, "Our financial performance will continue to be challenging for the next few quarters". What a joker, what a joke.
Demonstrating the remarkable breadth of his comedic capabilities, Mr. Heins, moved on seamlessly from the one-liner to the sort of corporate gobbledygook that would have delighted the late Stanley Unwin (an English entertainer who specialised in talking meaningless gibberish with such dead-pan conviction that listeners would, for a moment or so, believe he was talking sense).
This is evidently a tribute by Thorsten Heins to the Professor: “The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace." What a rib-tickler.
It's the way he tells 'em.
In plain English the above means, "Consumers like mobile devices from other manufacturers more than they like ours. And our kit is both expensive and old-fashioned so we now have thousands upon thousands of handsets stockpiled in warehouses, gathering dust and costing us so much money all we can do is cut staff and costs."
The CEO also announced that RIM has retained the expensive services of J.P. Morgan and RBC Capital markets to help the company "explore strategic options" which will include a possible sale or merger.
Back in March, RIM posted a net loss of US$125 million compared to the profit of $265 million achieved in the same quarter a year earlier. Research house Canalys calculates that RIM's smartphone sales have collapsed by 29 per cent over the past couple of quarters and its market is now as low as 6.7 per cent in in a sector that grew globally by 44 per cent last year.
Following the statement from Mr. Heins, analysts once again downgraded their outlooks for RIM's shares and earnings. Peter Misek of Jefferies and Co issued a report called "RIM, From Bad to Worse (and the Black Hole Aug Quarter Is Still to Come)".
Dexter Thillien, an analyst at IHS Global Insight also stuck the knife in. He said, "Competitors may wait for the company to go under and acquire its most compelling assets at a knock-down price, just as happened with fellow Canadian company Nortel."
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