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Company reportedly loses 4 percent of average revenue from each new handset

BlackBerry 10 gleams in new articles and slide shows put on by Waterloo, Ontario-based phonemaker Research in Motion, Ltd. (TSE:RIM).  Long a star of the phone world, RIM helped define what is today called a "smartphone".  But the company has fallen on hard times.

BlackBerry 10 -- or BB10, in shorthand -- offers seemingly everything RIM needs to recoup.  It offers a stylish new interface built on RIM's acquired QNX operating system.   And it comes on gorgeous LTE-enabled handhelds like the leaked "London".

But BB10 will not arrive until Q3 2012 at the soonest, a delay that has many wondering whether it will be too little, too late when it does finally arrive.  For now RIM is selling what it's already conceded is, in effect, a defunct operating system -- BlackBerry 7 (BB7).  After examining operating costs and inventory costs, Peter Misek, an analyst at investment banking firm Jefferies, found that RIM is spent 4 percent more per handset than it took in, in 2011.

The report is a dire sign for RIM, who is expected to perform its third inventory write-off for Q2 2012, which will be reported on September 1.  Meanwhile Mr. Misek tells Reuters in an interview that RIM is pumping increasing amounts of cash into advertising and price cuts, in a bid to get customers to buy its effectively defunct BB7 devices.  PlayBook tablets currently retail for less than half their original MSRP.
RIM PlayBook ad
RIM has spent heavily to advertise its PlayBook tablet and its BlackBerry smartphones, and to engage in aggressive price cuts. [Image Source: Photoree]

He adds, "The other key thing from this is that it's not likely to get better anytime soon, because until BB 10 devices are out they're going to have to keep cutting prices."

RIM has cancelled all future financial forecasts after posting its first loss in years in Q4 2011.  That loss led to Jim Balsillie -- longtime board chairman and co-CEO -- to be dismissed from his board position, just months after he and his fellow co-CEO Mike Lazaridis were fired from the chief executive spot.

New chief executive Thorsten Heins has said he is considering transforming RIM into a licensed services company or selling RIM's assets to allow investors to recoup a portion of their recent losses.  The Canadian government has green lit a potential sale of RIM, but any such purchase would likely have to pass the scrutiny of the U.S. Department of Defense, a heavy BlackBerry user.  

A coalition of rappers and ex-convicts including Dr. Nono Pearson and famed cocaine dealer "Freeway" Ricky Ross recently offered a bizarre offer to buy RIM for ~$1B USD.  The offer was met with skepticism, which was amplified by the coalition's Geocities-looking homepage and the fact that the coalitions recent charity drive, which aimed to raise "millions" had thus far raised only $5, according to the webpage.

Source: Reuters

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By Motoman on 4/11/2012 3:50:27 PM , Rating: 5
which aimed to raise "millions" had thus far raised only $5, according to the webpage.

That is funny as sh1t.

Reminds me of when Jesse Ventura was the governor of MN. During his campaign, one of his promises was that he was going to refund MN's tax surplus back to the taxpayers (yes...believe it or not, MN was collecting more in taxes than it actually needed to at the time).

So shortly after he was elected, at a press conference he was talking about doing that refund and a journalist asked "why not take that tax surplus to build the new stadium that the Vikings and/or Twins want?"

Jesse thought about that for a moment, and said "tell you what...I'm going to call Norwest bank as soon as we're done here and ask them to set up an account. When you get your tax refund check, if you would rather it went to a new stadium, you send it to that bank. I'll make sure that information is properly posted as to how to do so."

Sure enough, by that evening's news, all the stations were dutifully reporting on how to donate your tax refund check to the new stadium fund.

...and then a few months went by, with nary a peep at all from anyone about that fund.

Then one night I happened to be watching the news, and the anchor says "oh, and remember that special tax refund account for the new stadium fund? Yeah...there's $1,200 in there."

By ltcommanderdata on 4/11/2012 4:06:36 PM , Rating: 4
Then one night I happened to be watching the news, and the anchor says "oh, and remember that special tax refund account for the new stadium fund? Yeah...there's $1,200 in there."

I bet the people who put up that $1,200 felt stupid afterward.

By Samus on 4/12/2012 12:12:21 AM , Rating: 3
Price cuts? Where? The 9970 still sells for $300 AFTER 2-year contract. Even the 9000 on AT&T is the THIRD most expensive phone they offer, only bested by the iPhone 4s 32GB and 64GB.

It's ridiculous how expensive Blackberry's are. Then you factor in they have the most expensive data packages because of RIM's proprietary network usage fees to carriers, which is passed on to the consumer, and they are the most expensive phones to operate as well.

So basically you're getting a outdated phone with an outdated OS that is among the highest cost of ownership. So how are the bleeding money with suckers still getting sucked into their crap? They still have 10 times the marketshare of WinMo.

By eddieroolz on 4/12/2012 5:21:54 PM , Rating: 2
If you claim numbers, at least don't fake the numbers.

Directly from AT&T's shop site:
Bold 9900 - $199 with 2-year contract. Third-most expensive phone after iPhone? You bet. But so is Motorola Atrix at $199. Or Galaxy SII at $199 too. They're all third-most expensive.

Bold 9000 - Handheld from 2008? They still sell that?

If I were you, I wouldn't make up numbers on something that can easily be verified.

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007

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