RIM Surprises Everyone With Smaller Losses
Michael Harper for redOrbit.com – Your Universe Online
Wall Street, as well as anyone who has been paying attention, expected RIM to post a giant loss when they gave their earnings call yesterday. Reports of retail stores not selling any BlackBerries in a month and large corporations finally dumping their support of RIM’s products had been circling in the weeks leading up to yesterday’s call. While Wall Street may not have been predicting total doom and terror, they certainly didn’t expect to hear about a loss which was even smaller than the one from the previous quarter. These shareholders may have been so shocked and surprised by this news, they began to buy some RIM stock, causing the price of shares to rise by some 20% to $7.14, according to the New York Times.
Though they weren’t as spectacular as the world may have assumed, RIM’s losses are still quite bad: The BlackBerry maker reported a $235 million loss whereas they reported a $419 profit just one year ago.
Many analysts had also predicted RIM’s sales of BlackBerry phones to be quite low. Indeed, the company sold 3.2 million smartphones less than they did a year before, coming in at 7.4 million all told. The Canadian company’s biggest embarrassment continues to be their subpar tablet offering, the PlayBook, selling a paltry 130,000 units.
Ever the optimist, Heins found some cause to celebrate these numbers. In a prepared statement, Heins said, “Despite the significant changes we are implementing across the organization, our second quarter results demonstrate that RIM is progressing on its financial and operational commitments during this major transition.”
BlackBerry has, for over a year now, placed much of their hopes and their future upon BlackBerry 10, the newest mobile operating system which brings in many features the top two mobile OSes have had for years, such as a virtual keyboard and tighter social integration. This product has been delayed multiple times, and now is expected to be released sometime in the first quarter of 2013.
“… Make no mistake about it, we understand that we have much more work to do, but we are making the organizational changes to drive improvements across the company, our employees are committed and motivated, and BlackBerry 10 is on track to launch in the first calendar quarter of 2013,” said Heins.
While they finish up BB10, sales in developing markets are giving them just enough strength to keep pulling themselves along this race. Heins announced nearly 80 million global users, as well as a sequential growth of revenue from the first quarter and an overall increase in cash and short-and long-term investments to $2.3 billion.
This wasn’t the first time Heins had made this claim about global subscribers, as earlier in the week he took the stage at their BlackBerry 10 Jam conference in San Jose to boost developer morale.
While Heins no doubt wants RIM to regain their former glory, he’s been making several statements lately about taking this recovery step by step, a very common-sense approach. Therefore, rather than aim for the top of the pops, dethroning Android and Apple, Heins says he’ll be happy with a number 3 spot in these races.
“We have a clear shot at being the number three platform on the market,” said Heins at BB10 Jam.
“I’m not thinking about BlackBerry being the number one smartphone, BlackBerry needs to be number one in mobile computing.”