RIM Says New BlackBerries Will Revive Sales, Investor Interest
Research in Motion held their second quarter earnings call yesterday and reported a 59% loss in profit as mobile handset shipment is lower than expected. Revenue for the quarter was at $4.2 billion, with net income of $329 million, or at 63 cents per share. On an adjusted basis, per-share earnings came to 80 cents per share. RIM’s shares are down 27 cents, or 0.9%, at $29.46.
“Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models,” co-CEO Jim Balsillie said in a statement. “We will continue to build on the success of the BlackBerry 7 launch to drive the business as we focus our development efforts on delivering the next generation, QNX-based mobile platform next year.”
Last month, RIM released new BlackBerry OS 7 phones and early reports stated that sales of the new devices were soaring, but the company said that these hadn’t sold long enough in the second quarter to be reflected in the results for its second fiscal quarter that ended last August 27. Sales of the new phones will be reflected by the third quarter which will end on November 26. They strongly believe that the new BlackBerrys will bolster sales later in the year. RIM also promised a suite of software upgrades for the PlayBook next month which they assume would bolster sales of the tablet.
Though the PlayBook isn’t faring well on the market as only 200,000 units were shipped, well below their expected target of 500,000 to 700,000. They will take a page from HP’s handbook, implementing promotions and rebates to increase sales. RIM also plans to roll out over-the-air software updates, which they will show off next month at their developer conference, with plans to release the updates shortly after.
Co-CEO Mike Lazaridis said “rather than trickle out the updates for the PlayBook, RIM plans to bundle a number of features together to make a bigger impact. Updates will include native email, calendar and contacts, an Android app player, which will enable the tablet to run some applications from the Google operating system, an enhanced Web browser and a BlackBerry video store, which will offer access to 10,000 movies and TV shows.”
RIM is also hopeful for the first wave of smartphones powered by their new OS QNX though no exact date was presented but confirmed that the QNX device will not be coming out in time for the holiday rush. Though RIM’s revenue is significantly low, they were still able to expand their subscriber base 40% year over year to 70 million.
RIM is treading in shark-infested waters waiting to tear them apart if they don’t do something to recover. It’s already the middle of September and they have less than two months to turn things around for the remaining calendar year. They better bring their “A-game” or more heads will roll.
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