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Print 16 comment(s) - last by Pirks.. on Apr 1 at 3:04 PM

RIM has a rough quarter, three execs leave the company

It seems as though RIM just can't catch a break these days. The company has been circling the drain in the consumer space for the past few years. RIM was slow to react to Apple's iPhone launch in mid-2007 and figured that it had a strong enough position in the marketplace to weather any attacks from the smartphone upstart.
 
However, once the iPhone began gaining significant traction in subsequent generations -- along with the stampede of Google Android-based smartphones -- RIM found itself in serious trouble.
 
To add insult to injury, it was recently reported that RIM lost its position as the top smartphone vendor in Canada to Apple's iPhone.  Not even superheroes can save RIM now as U.S. government agencies bail on the company for iOS and Android smartphones.
 
RIM co-CEOs Jim Balsillie and Mike Lazaridis were mostly to blame for the company's laggard response to changing market conditions, and in late January, they stepped aside to make room for Thorsten Heins as CEO. Balsillie and Lazaridis, however, decided to stay on RIM's board of directors to keep an eye on Heins.
 
I. RIM Experiences Another Rough Quarter
Fiscal Q4 saw revenues slide 19% to $4.2 billion. The company reported a GAAP net loss of $125 million. In addition, RIM's shipments of smartphones plummeted 21% to 11.1 million units during the quarter. For comparison, Apple shipped 37 million iPhones in its last reported quarter.


A fire sale on PlayBook tablets resulted in a record high 500,000 units shipped for fiscal Q4
 
One bright side to the news is that BlackBerry PlayBook shipments were their highest point ever at 500,000 units. But even that good news has a big caveat -- RIM has been practically giving the units away, selling them for well below the original MSRP. The 16GB PlayBook was originally launched at a price point of $499, but most retailers now sell the tablet for $199 or even lower. In fact, some retailers even sold the 64GB PlayBook for $199 for a short period of time (this model retailed for $699 at launch).
 
II. Top Execs Leave RIM, CEO Thorsten Heins Hopes to Turn the Company Around
With so much uncertainty now swirling around at RIM, Jim Balsillie announced that he is now leaving RIM's board of directors. "As I complete my retirement from RIM, I'm grateful for this remarkable experience and for the opportunity to have worked with outstanding professionals who helped turn a Canadian idea into a global success," said Balsillie.


Jim Balsillie retires from RIM
 
In addition, David Yach (CTO of Software) and Jim Rowan (COO of Global Operations) are also leaving the company. "RIM would like to thank David Yach and Jim Rowan for their years of service and many contributions to RIM," said CEO Thorsten Heins. "We wish them well in their future pursuits."
 
For his part, Heins feels that there is still a lot of life left in RIM. "I have assessed many aspects of RIM's business during my first 10 weeks as CEO," said Heins. "I have confirmed that the Company has substantial strengths that can be further leveraged to improve our financial performance, including RIM's global network infrastructure, a strong enterprise offering and a large and growing base of more than 77 million subscribers."


Current RIM CEO Thorsten Heins
 
Heins goes on to once again tout the upcoming BlackBerry 10 platform and confirms that it will launch in the second half of 2012. However, Heins also acknowledges that RIM still has a lot of work to do.
 
"In addition to delivering the BlackBerry 10 platform and refocusing resources on RIM's key opportunities, such as BlackBerry Mobile Fusion and new integrated service offerings, we will also drive greater operational performance through a variety of initiatives including increased management accountability and process discipline," Heins continued.
 
RIM is also turning its attention away from the consumer space and is hoping to refocus its efforts on its enterprise business, joint ventures, and licensing the BlackBerry 10 operating system.

"We believe that BlackBerry cannot succeed if we tried to be everybody's darling and all things to all people," said Heins. "Therefore, we plan to build on our strength."

Source: RIM



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Gotta start somewhere....
By Taft12 on 3/29/2012 9:40:11 PM , Rating: 2
Give 'em credit for dumping the deadweight that got them into this situation and making some noise about transforming the company.

I'm surprised your article didn't mention the CEO's comments that didn't dismiss the idea of selling itself though.




RE: Gotta start somewhere....
By JasonMick (blog) on 3/29/2012 10:34:40 PM , Rating: 2
quote:

Give 'em credit for dumping the deadweight that got them into this situation and making some noise about transforming the company
True, Balsillie was a huge part of the problem. He and Lazaridis were complete clowns.

I was with Pirks to an extent in that with every quarter of declines I would say... "well, they did post a profit."

Now they're posting losses. The whole situation is eerily reminiscent of Palm's spectacular crash and burn.

Recall, Palm had an attractive OS and some snazzy hardware too, as it went down in flames.


RE: Gotta start somewhere....
By Pirks on 3/29/12, Rating: 0
RE: Gotta start somewhere....
By messele on 3/30/2012 4:06:02 AM , Rating: 2
That doesn't actually mean they are not posting losses, it may be that they have ramped down manufacturing which means less purchases and this has changed their cash-flow balance which would add reserves.

Don't be fooled by a couple of simple figures. Whatever the merits of the product they are really making a huge balls-up of understanding them.


RE: Gotta start somewhere....
By retrospooty on 3/30/2012 7:53:06 AM , Rating: 3
"Don't be fooled by a couple of simple figures. Whatever the merits of the product they are really making a huge balls-up of understanding them"

He's not fooled. He carefully picks and chooses the few good highlights and posts them. He knows as well as anyone that RIM is in deep sheep dip, he is just fighting to not be proven wrong at this point. A pointless venture since what will happen to RIM will happen anyhow.

Good info here... http://money.cnn.com/2012/03/29/technology/rim-ear...

What we all saw coming has come. "BlackBerry sales fell 23% compared to the previous quarter, and were down more than 25% from the same point last year."

Revenue down, profit down (negative) global sales down. Excess inventory of unsold units forcing price drops, and the next 2 quarters? Expected to be worse, and then worse yet again.

Good luck getting to BB10 RIM.


RE: Gotta start somewhere....
By RufusM on 3/30/2012 10:59:08 AM , Rating: 2
I don't think there's anything RIM can do at this point. iOS and Android are reaching critical mass and RIM doesn't have the resources to match their functionality. Microsoft does, however, and they are betting big on WP7, Win8 and Office365.


RE: Gotta start somewhere....
By retrospooty on 3/30/2012 2:30:43 PM , Rating: 3
I agree. RIM is likely toast.

Its not that BB10, or QNX isnt good. It's that people wont care. When it comes out, we will be looking at the iPhone 5 with probably IOS6, and many new Android 5 devices.

RIM's corporate business would be at least lucrative enough to sustain a smaller company than RIM is, and they could survive with some layoffs. They would be fine if they werent currently as big as they are. A company of that size that had that much market power cant just "shrink" to a much smaller company. They have shareholders to take care of, the shareholders are going to want some amount of their money out of the company. Before it gets to small, they will become too loud to ignore and RIM will be forced to sell off to satisfy the shareholders.

In other words if RIM were always a medium size company, they could probably sustain it , but they are large and cannot shrink to medium and sustain, because the shareholders arent investing in order to lose their shirts, they will want some portion of their shirts back.


RE: Gotta start somewhere....
By michael2k on 3/30/2012 2:43:27 PM , Rating: 2
Of course there's things RIM can do!
Ship an Android phone; port BBM to Android (paid app, free on their devices).
Ship a WP7 phone; port BBM to WP7 (paid app, free on their devices)

What is their core competency? Focus on it!

Unfortunately as far as I can tell their core competency is running servers... good luck competing against Google there.


RE: Gotta start somewhere....
By retrospooty on 3/30/2012 6:02:50 PM , Rating: 3
Can do and could have done for the past 5 years since the iPhone announced, but didn't. Its exactly their lack of action that landed them here.

Who would have thought... If you stick your head in the sand and act like all is well and do nothing at all for years while all of your competitors are innovating you start losing sales. The sad thing is everyone saw it coming and they just denied and denied the whole time.


RE: Gotta start somewhere....
By Reclaimer77 on 3/31/2012 9:58:24 AM , Rating: 2
quote:
Now they're posting losses. The whole situation is eerily reminiscent of Palm's spectacular crash and burn.


Nonsense!! Now is the perfect time to buy a Playbook. The best tablet on the market!!!

Signed,
Pirks.


RE: Gotta start somewhere....
By Pirks on 4/1/2012 3:04:08 PM , Rating: 2
You meant new Playbook LTE? Fandroids won't buy it but normal people just might


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