Blackberry-maker RIM's Q2 results look like the final bleeps on the heart monitor. Revenue has dropped by nearly a half from last year, losses continue and 5,000 more job cuts are on the way. By Ian Scales.
Perhaps worst of all, RIM just can't seem to pull together its potential saviour - its new operating system BlackBerry 10 (BB 10). That already overdue offering will not now appear until early next year. The company cites problems it's experiencing in integrating new features.
Considering that "integrating new features" is really what an OS upgrade is all about, then what RIM is saying is that the company as a collection of talented people is simply broken. And it's easy to see why
Five thousand job losses doesn't seem a lot these days - after all Nokia does its firing in 10,000 increments - but RIM is a much smaller company and 5,000 is around a third of the entire payroll.
So it's little wonder that, in football terms (Europe will this weekend see the Euro football final, so such metaphors spring naturally to mind) the "boys' heads are down". The score is 5-0 against, the joint captains have been red carded (sent off), the supporters are all booing from the stands and there is only a few minutes of injury time left to do something before the team is knocked out of the competition. No wonder RIM's human capital can't get BB 10's new features integrated.
The second quarter numbers don't look any better close up. For the (three months to June) revenues dropped by 43 per cent to US$2.8 billion from $4.9 billion last year.
Where a year ago RIM posted a quarterly profit of $695 million, the latest quarter saw a loss of $510 million.
RIM's fall from smartphone grace has been as abrupt and as merciless as Nokia's, although unlike Nokia it didn't shoot itself in the foot 18 months ago by saying that its current offering (Symbian) was burning and that its real focus was a year away on a future Windows Phone launch. RIM managed its fall by not producing product that enough customers wanted to buy and having its market share go to Android.
Blackberry's smartphone market share (from Tomi Ahonen Consulting
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%
What's the outlook? RIM CEO Thorsten Heins offers no guidance. Instead he reaffirmed that the big priority was the launch of Blackberry 10 and that he was "aggressively" working with advisors and actively evaluating ways to leverage assets.. etc etc. In other words, desperately looking for sell-off options.
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