It’s Grim for RIM
More bad news for BlackBerry-maker Research In Motion (RIM) which yesterday announced a 96 per cent year-on-year decline in profits for Q3 2012, ending 1 December. RIM posted net profits of just $9m (£5.5m), compared to $265m a year ago. Revenues were 47 per cent down on the same quarter last year at $2.7bn, compared to $5.2bn a year ago. RIM shipped 6.9m smartphones and 255,000 PlayBook tablets during the quarter. It ended the quarter with a subscriber base of approximately 79m users, 1m down on the previous quarter, the first ever drop in RIM subscriber numbers.
RIM said it expects continued pressure on operating results as it gets set to launch its BlackBerry 10 platform in the fourth quarter (the launch event is set for 30 January, 2013). It intends to continue to consider using pricing initiatives on BlackBerry 7 devices and service fees in some markets as a way to maintain its subscriber base and drive more BlackBerry users.
It also expects the BlackBerry 10 launch to impact sales of current BlackBerry 7 products as customers defer purchasing decisions and wait for BlackBerry 10 devices. All of this, says RIM, will impact unit volumes, subscribers, margins and service fees. Combine this with an increase in marketing spend to support the BlackBerry 10 launch, and RIM expects to report an operating loss for the fourth quarter.
David Murphy writes:
RIM’s latest figures really do make for grim reading. The fall in profits and revenues is bad enough, but perhaps the most telling stat is the fall in subscriber numbers, the first in RIM’s history. It seems hard to imagine that this fall can be reversed, though RIM will argue that the wave of BlackBerry 10 devices coming next year stands a good chance of reversing the firm’s phones.
It’s impossible to second-guess consumer sentiment, of course, but looking at the industry perspective on RIM, many in the mobile marketing game seem to have all but given up on the company. iOS and Android are afforded the respect their standing in the market deserves, and many seem to feel that Microsoft has invested too much in its partnership with Nokia to let it fail. When you ask about RIM, however, the silence is deafening.
At the risk of stating the obvious, BlackBerry 10 had better be good, and even if it is, that still might not be enough to rescue RIM from its current travails.