RIM’s Loss Widens; BlackBerry 10 Delayed

It was no surprise that {complink 4644|Research In Motion Ltd. (RIM)} reported a loss for its first fiscal quarter of 2013. What did surprise analysts was RIM's announcement that its next product, the BlackBerry 10, will be delayed until next year.

RIM announced on Thursday revenue of $2.8 billion for the quarter, down from $4.2 billion the prior quarter and $4.9 billion in the comparable year-ago period. The company reported a net loss of $518 million for Q1 2013, compared with a net loss of $125 million the prior quarter and net income of $695 million in the year-ago period.

RIM also told analysts that BlackBerry 10, the product slated to reverse the company's fortunes, would be delayed due to software integration snags. In its earnings press release, RIM said:

    Over the past several weeks, RIM’s software development teams have made major progress in the development of key features for the BlackBerry 10 platform; however, the integration of these features and the associated large volume of code into the platform has proven to be more time consuming than anticipated. As a result, the Company now expects to launch the first BlackBerry 10 smartphones in market in Q1 of calendar 2013.

According to Reuters and other media reports, analysts cut their price targets on RIM's stock and speculate that RIM could actually run out of cash:

    At least 10 brokerages cut their price targets on the stock, some by as much as 50 percent, a day after the company reported worse-than expected quarterly results and said it would delay the launch of its next-generation device to early 2013 from late this year. RIM shares were down 16 percent in pre-market trading on the Nasdaq. “If RIM continues to be run as it is, we believe that the company will eventually fail,” Nomura Equity Research said. “We do not expect RIM to successfully drive a turnaround of its financials, even with the launch of BB10 next year,” the brokerage said in a note to clients, adding that its model assumes that RIM disappears by 2020 in a gradual decline.

RIM also said it would be cutting 5,000 workers in an effort to save cash.

17 comments on “RIM’s Loss Widens; BlackBerry 10 Delayed

  1. syedzunair
    June 29, 2012

    Barbara, do you think this might prove to tbe the final nail in the coffin? RIMS has been performing badly for the past few quarters. And, BB 10 was supposed to make things better for them. With delays in BB 10 will the company be able to survive with this fast depleting cash resources? 

  2. ahdand
    June 30, 2012

    I think this has something to do w Galaxy s3 and Apple I5 which is due in few moinths.

  3. Anna Young
    June 30, 2012

    “We do not expect RIM to successfully drive a turnaround of its financials, even with the launch of BB10 next year,” the brokerage said in a note to clients, adding that its model assumes that RIM disappears by 2020 in a gradual decline.

    This is truly at a “breaking point” for BB. What else can turn this company around?

  4. Eldredge
    June 30, 2012

    I heard this news on the radio yresterday afternoon, and I also was surprised by the delay. Either the prodcut is not ready for release, or something has occurred in the industry that makes the release outdated.

  5. syedzunair
    June 30, 2012

    @nimantha.d: I don't think so BB would delay a launch of a product to meet other vendor launches. Also, to me BB is not in the same league as SIII and iPhone 5. Both SIII and iPhone 5 have a target market that comprises of teenagers and above. While for BB the market is usually professionals who need 24/7 access to corporate emails. 

  6. t.alex
    July 1, 2012

    I think so too. With the coming of iOS 6 and the recent release of android jellybean, RiM probably should delay a bit. RIM has been rushing to put in a lot of new software features. Last minute integration is always a big problem.

  7. Daniel
    July 2, 2012

    Syedzunair, I think this delay is a part of business strategy. It's more or less like a wait and watch policy, where they are closely monitoring the market movements and developments. This may help to sort out the existing issues and release a master product, which can sustain atleast for a year.

    July 2, 2012

    RIM gives the appearance of a sinking ship and I am not sure there are many lifeboats available.  It is a shame.

  9. Barbara Jorgensen
    July 2, 2012

    It's hard to see how RIM can pull out of the downward spiral. I think the delay is a very bad thing for the company and I fear even fans of BB will move on before BB10 comes out.

  10. mfbertozzi
    July 3, 2012

    I agree with the fact delays in launching announced products, in general, represent a bad situation; but if we think just a moment in terms of competitors, apart Apple, where RIM's competitors? Not to say I am a wizard, but maybe it is a good time for acquiring RIM at low price and for launching a new company, including a new brand…bad, sometimes, brings also good…

  11. syedzunair
    July 3, 2012

    Jacob, I would have agreed with you if it were about a company that was doing good in the market. RIMS on the other hand is barely keeping up with the market. So I don't see what would they achieve by delaying and watching the competitors? Probably, by the time they react the competition would have already sliced up a huge chunk of their remaining market share. 

  12. Daniel
    July 4, 2012

    Syed, why can't be it in a reverse way also. They had already burned their hands by introducing different products at different stages. Nothing was fruitful, so they may wait for the right time to introduce a new product, through which they are expecting a good breath.

  13. syedzunair
    July 4, 2012

    Jacob, thanks for your response. It might work out that way you mentioned but honestly I haven't seen it happen myself. Waiting to launch a product (that might not be able to compete with the others) at a time when the iPhone and SIII would have created a lot of hype doesn't seem workable to me. 

    We might have different opinions about this and only time will be able to tell which one is correct. Although, I hope that RIMS finds a way to get out of its troubles. 

  14. mfbertozzi
    July 5, 2012

    @Jacob: well, it is an interesting and realistic point of view, but given their actual status on business, additional products could help in making better profit…or not?

  15. ahdand
    July 6, 2012

    Well I dont like BB becasue it is not that compatible for some reason to my reuirements. Its good for old fashioned bsiness people in my opinion but Apple is much more stronger in every aspect and IMO I feel its the best even when you compare it with the Samsung Galaxy 3

  16. ahdand
    July 6, 2012

    Well I havent experianced it. You mean to say IOs 6 has problems ?

  17. syedzunair
    July 12, 2012

    I think that might be true. Even with the BB App World, BB has not mustered the support it would have liked from its users. The apps and compatibility issues have been there for BB since a very long time. As a result, BB has developed into a product for a niche market, i.e. businessmen and working professionals. 

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