If various unofficial reports about the beauty and utility of the long-delayed but equally long-awaited BlackBerry 10 are anything to go by, Research In Motion (RIM) may just have a winner on its hands. But talk about running it close to the wire! RIM is moping over its beer in the Last Chance Saloon even as the bartender closes the joint around it. The chairs are on the tables, the candles are guttering and time's a-passing. By Martyn Warwick.
First, the seemingly good news. RIM has posted better quarterly revenues than Wall Street analysts had predicted and were expecting. The US$2.7 billion accounted for as at December 1 this year is welcome even though that figure is 47 per cent down on the same quarter last year. Nonetheless, RIM is cock-a-hoop and crowing about turning a profit for the first time in many a long day.
Fair enough, you might think. Give 'em a break and the chance of a having a Happy Christmas. Well. yes... except that RIM's profit isn't the result of a sudden about-turn in its commercial fortunes: the cash has come from a one-off tax rebate of $166 million. Nice, but not repeatable. Were it not for the windfall RIM would have lost $114 million in Q3.
The other problem is that RIM is beginning to lose significant numbers of subscribers.
A million of them have gone elsewhere over the last quarter and although the company may well get a boost when the BlackBerry 10 eventually hits the market at the end of next month (allegedly) many of those who have lost patience and gone over to Apple or Android handsets will be locked-in to new and lengthy contracts with their new service providers.
OK, RIM still has 79 million punters but the drift is downwards and the BlackBerry 10 will not simply have to be very special indeed to counteract the trend; it will have to perform astonishingly well over a very long period if the company is to stand any chance of clawing back some of the ground it has lost to its competitors - and those competitors won't be sitting around doing nothing and allowing RIM a free run with its new devices.
That said, RIM is debt free and has been able to top up its cash reserves by $600 million. It now has some $2.9 billion in readies to make sure the BlackBerry 10 launch (which surely must be RIM's last best chance of regaining some of its former lustre) is a flawless exercise. The market will not be forgiving if this one is cocked-up.
RIM's top execs may have hoped that the figures and a positive attitude would help the company's share price but the fact is that the BlackBerry share in the all-important US market has fallen from the 11 per cent it commanded at the end of 2011 to 5 per cent today - and most of that is down to the delayed arrival of the BlackBerry 10. The market's verdict was swift. RIM's share price fell by 10 per cent to $12.80.
However, you can't accuse RIM's CEO, Thorsten Heins, of pessimism. Commenting on the figures he said, "It's a great time to be with BlackBerry." It must be the Christmas spirit - and Thorsten's a glass half-full kind of guy. Cheers!
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