RIM's Business is in Trouble at BlackBerry 10 Launch


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Research in Motion says their business is in trouble and they expect to incur big losses throughout the rest of 2012. This news comes just as they are about to release BlackBerry 10. On June 2nd, RIM will be revealing their Q1 financial results and they want stockholder's to be ready for the bad news, but they also want to spearhead a campaign for change to combat the poor financial performance before damage gets out of control.

RIM president and CEO, Thorsten Heins comments on the challenges which lie ahead for the company:

"RIM is going through a significant transformation as we move towards the BlackBerry 10 launch, and our financial performance will continue to be challenging for the next few quarters. The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter."

"We are continuing to be aggressive as we compete for our customers’ business – both enterprise and consumer – around the world, and our teams are working hard to provide cost-competitive, feature-rich solutions to our global customer base. On the positive side, we expect to further increase our cash position in Q1 from the approximately $2.1 billion we had at the end of fiscal 2012."

The company has been making strategic changes to their management team in order to gain a more competitive position in the market. They recently hired Kristian Tear as Chief Operating Officer, who posses a background in international sales from Europe, Asia and Latin America. Frank Boulben will now serve as Chief Marketing Officer and he brings vast experience from the mobile computing and communications industry. The duo will be instrumental in developing the new Blackberry 10 platform and pulling RIM's business out of the flames.

RIM will also be cutting jobs throughout 2012 in order to keep operating costs in check. They have hired JP Morgan and RBC to help them identify financial weaknesses at the company. The high churn in the U.S. marketplace threatens their overall livelihood, but they still see many advantages.

RIM lists these accomplishments as assets to the company:

* Our annual BlackBerry World conference and BlackBerry 10 Jam took place earlier this month and both were tremendously successful. More than 5,000 developers, partners, carriers and enterprise customers from 115 different countries saw the first glimpses of our next-generation BlackBerry 10 platform and their response was encouraging.

* Our developer partners have been enthusiastic with the BlackBerry 10 Dev Alpha prototype unit we distributed at BlackBerry World and many are well underway in developing applications to be ready for the launch of BlackBerry 10 in the latter part of calendar 2012.

* The support and enthusiasm from our developer community is also reflected in our app growth, where we now feature more than 80,000 apps, which represents a 220% increase from one year ago, and more than 15,000 apps for PlayBook compared to less than 2,000 last year. We believe this bodes well for our ecosystem as we get set to launch BlackBerry 10.

* We are making steady progress with the innovation of our next-generation BlackBerry 10 mobile computing platform, which is still on track to launch in the latter part of calendar 2012.

* Our global subscriber base continued to grow this quarter to approximately 78 million, driven primarily by growth in international markets, which is partially offset by high churn in the United States, and our BBM user base has grown to approximately 56 million users globally.

* Our strong brand internationally was recently enhanced with the successful launch of two new BlackBerry 7 phones in India and Latin America.

RIM president and CEO, Thorsten Heins once again comments:

"Although we are facing challenges, we remain excited about BlackBerry 10 and believe that this platform coupled with the results of the strategic review will create long-term value for our stakeholders. We will provide another more detailed business update when we report our first quarter results in June.”

You'll be able to find those first quarter financial results here on Webpronews as soon as they are released along with any other news about RIM and the upcoming BlackBerry 10.