It’s the beginning of the end for RIM. The company has announced its fiscal Q1 2013 earnings report, and it has amassed revenue of $2.8 billion, down 33% from fiscal Q1 2012. The decline in revenue led to a net loss of $518 million, and as a result of poor growth, RIM plans to cut another 5,000 jobs. Oh, and they only managed to ship 7.8 million units in the quarter. Yep, the whole quarter.
Making matters worse, and what might be a death-blow for the company, is that BlackBerry 10 has been delayed to 2013, completely missing the holiday season. This comes as Google, Apple, and Microsoft have all announced their next-generation platforms, all slated to launch in 2012. RIM attributes the delay to some BlackBerry 10 features being more voluminous than they anticipated, and therefore more time-consuming. Those job cuts certainly won’t help RIM pick up the pace anytime soon either.
CEO Thorsten Heins is still confident that BlackBerry 10 will win out in the end, making the following statement:
“RIM’s development teams are relentlessly focussed on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready. I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience.
We are encouraged by the traction that the BlackBerry 10 platform is gaining with application developers and content partners following the successful BlackBerry Jam sessions that we have held around the world since the beginning of May. Similarly, the reception of the BlackBerry 10 platform by our key carrier partners has been very positive and they are looking forward to going to market with BlackBerry 10 smartphones in the first quarter of calendar 2013.” – Thorsten Heins, CEO, Research in Motion
While they may be able to get some developers on board with BlackBerry 10, we believe RIM will have a much harder time luring customers into the fold. While BlackBerry phones were popular in early smartphone years, sales of RIM’s devices have fallen almost off the map by way of Apple’s iPhone and Google’s Android products, which combined amount to over 80% of the smartphone market.
The road to success is long and increasingly treacherous for RIM, and we have a hard time seeing how they’re going to come out unscathed. Here’s hoping RBC Capital and JP Morgan can right the sinking ship.