RIM - the company behind the Blackberry smartphone - just announced its results from the last quarter: a $518 million loss. This is a setback from the $128 million loss in the first quarter last year and came as a major blow as analysts expected only a small fraction of that. Revenues also fell to $2.8 billion from $4.9 billion in the first quarter last year, and the company only shipped 7.8 million Blackberry smartphones, and 260,000 Playbooks. This is a third less than the 11.8 smartphones and half of the 500,000 Playbooks shipped the previous quarter. Trouble!
CEO Thorstein Heins said that the new highly anticipated Blackberry 10 set to be released later this year would not be out until 2013. Furthermore, the company announced it would be cutting about 5,000 of its 16,500 employees, leading us to speculate whether this could delay the release of the Blackberry 10 even further. More phones based on Windows 8, the anticipated release of a new iPhone and updated Android phones could render it increasingly difficult for the Blackberry 10 to steer the RIM vessel back on profitable paths.
Cuts of 16,500 employees
Even though in trouble, the game is not over yet. RIM had $2.2 billion in cash and no debt at the end of this quarter, giving it an opportunity to make the necessary changes for a profitable future. With increasing competition on the smartphone market, this might prove to be difficult. What advantage do you think that Blackberry has over its competitors? Share your thoughts below.
Written by Jákup Justinussen