RIM Tries to Sell Customers on Defunct Operating System, Bleeds Money
April 11, 2012 3:04 PM
comment(s) - last by
Company reportedly loses 4 percent of average revenue from each new handset
gleams in new articles and slide shows put on by Waterloo, Ontario-based phonemaker Research in Motion, Ltd. (
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
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
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 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.
This article is over a month old, voting and posting comments is disabled
4/11/2012 9:31:25 PM
It isn't a fun RIM article until Pirks shows up and says RIM is still the best, contrary to all evidence saying otherwise.
"DailyTech is the best kept secret on the Internet." -- Larry Barber
"Country" Rapper Aims to Buy RIM; BlackBerries Still Poking Around in D.C.
April 5, 2012, 11:48 AM
Canadian Gov't Greenlights Potential Sale of Research in Motion
April 2, 2012, 2:31 PM
RIM Sinks Further with $125M Fiscal Q4 Loss, Key Execs Leave
March 29, 2012, 9:14 PM
Sleek BlackBerry London Leaks, RIM Prepares PlayBook OS 2.0
February 2, 2012, 12:31 PM
Co-CEOs Balsillie and Lazaridis Kicked Off Sinking RIM Ship, COO to Step In
January 22, 2012, 9:40 PM
AT&T CEO Says Carriers Can No Longer Foot the Bill for High-End, Subsidized Smartphones
December 11, 2013, 10:55 AM
IPotty and iPad Tot Seat Ignite Controversy: Brilliant or "Destructive"?
December 10, 2013, 6:22 PM
Quick Note: Sleek White Second-Gen Nexus 7 Goes on Sale for $269
December 10, 2013, 4:55 PM
Illinois Considers Ban on Google Glass While Driving
December 10, 2013, 10:21 AM
EU to Nokia: Don't Even Think About Becoming a Patent Troll
December 9, 2013, 10:29 AM
Apple's "iBeacon" Tracks Customers Inside Apple Stores for Enhanced Shopping Experience
December 6, 2013, 11:26 AM
Most Popular Articles
Experts: Masturbation Prevents Cancer, Diabetes, Insomnia, and Depression
December 6, 2013, 2:01 PM
Hackers Nab 2 Million Login Credentials from Facebook, Gmail, Twitter
December 5, 2013, 1:00 PM
Thieves Steal Truck with Cobalt-60 Onboard in Mexico, Will Die "Without a Doubt" from Exposure
December 5, 2013, 12:04 PM
Man Arrested for Using 5 Cents Worth of Electricity to Charge Nissan Leaf at Middle School
December 4, 2013, 8:00 PM
U.S. Navy Fires "XFC" Drone from Underwater Submarine
December 6, 2013, 2:35 PM
Latest Blog Posts
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
Is The Period Becoming an Expression of Anger?
Nov 26, 2013, 2:02 PM
NSA and Congress -- You Will Never Kill the Constitution, It's an Idea
Nov 10, 2013, 2:00 PM
AT&T Explores $100B+ USD Deal to Acquire Vodafone's European Operations
Nov 4, 2013, 7:34 AM
More Blog Posts
Copyright 2013 DailyTech LLC. -
Terms, Conditions & Privacy Information