Blackberry mobile use set to fall – Revenues and profits tumbling


It’s been a miserable year at Blackberry. Revenues are down, profits are down, and now RIM (the corporate operating company behind the brand) is planning job cuts to plug the gap. This isn’t a short term problem; failure to continue device innovation gives Blackberry a massive gap to fill vs Android, iPhone and newly energised Nokia. Markets reacting badly already – but worse is yet to come…


Announcing its sales figures, RIM said that its revenue dropped 12% quarter over quarter from $5.6bn to $5.9bn, and claims that its earnings will drop again this quarter, predicting revenues of $4.2bn to $4.8bn, well below analysts’ estimates of $5.47bn as it won’t release new BlackBerry handsets until August.

Profit also fell to $695m for the quarter, down from $769m during the same period last year and falling from $934m in the previous quarter.

RIM now warns that it will cut jobs as it attempts to streamline the firm amid declining market share.

Blackberry’s decline

RIM shipped 13.2m BlackBerrys during the period, an amount below its own forecast, and the firm’s BlackBerry platform is now just the third-most popular in the US, with its share dropping 4.7 percentage points to give it just 25.7% of the market, behind both Google’s Android and iOS, according to comScore.

RIM also experienced a decline in its manufacturer market share, dropping 0.8 percentage points to comprise 8.2% of the space, trailing market leader Samsung, which has a 24.5% share.

PlayBook struggling to make an impact

Poor sales of it’s PlayBook tablet device have added to the firm’s woes. While RIM shipped about half a million PlayBooks in the quarter, above analyst forecasts of 366,000, that figure pales in comparison to the 3.27m iPads Apple sold during its first quarter.

RIM’s latest forecast revision is leading some analysts to speculate as to its long-term future and shares in the firm plummeted some 15% in reaction to its bleak outlook.

Jim Balsillie, co-CEO of RIM, said: “Fiscal 2012 has gotten off to a challenging start. The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter.”

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