BlackBerry maker disappoints with OS delay and revenue slump

BlackBerry maker RIM is delaying the launch of the operating system it hoped would bolster its position in the smartphone market, a move that – coupled with weaker year on year results in the last quarter – has seen its share price tumble.


RIM generated revenue of $5.17bn for the three months to 26 November, down 6% from $5.5bn the previous year. Net income for the quarter was down 70% year on year to $265m.

Sales of the company’s first tablet, the BlackBerry PlayBook have been sluggish since its launch in April and RIM only sold 150,000 of the tablets in the third quarter, despite heavy discounting. By contrast, Apple sold 11.1 million iPad tablets in its last fiscal quarter.

The company also blamed its dismal results on a global service outage in October, which rocked its brand reputation and deterred consumers from buying new BlackBerry devices.

RIM’s shares slipped more than 7% after the company said today (16 December) it only expects to shift around 11-12 million phones globally around the usually robust Christmas period – down from 14.8 million the previous year.

Shareholders were also dealt a further blow when RIM announced its QNX operating system, which runs the BlackBerry PlayBook, will not be available in smartphones until late 2012 at the earliest, rather than by March, as previously expected.

The company blamed the delay on a the unavailability of chips needed to power the BB10 range.

Co-chief executive Jim Balsillie admitted its shareholders may feel it has “fallen short” of expectations and, along with fellow RIM chief Mike Lazardis, has agreed to cut their salaries to just $1 each next year as they look to turnaround the faltering company.

Balsillie says: “It may take some time to realise the benefits of these efforts and the platform transition that we are undertaking, but we continue to believe that RIM has the right set of strengths and capabilities to maintain a leading role in the mobile communications industry.”

In the UK, RIM is the second biggest smartphone manufacturer, with an 18% share of the market, behind Apple at 26.8%, according to comScore data for September, but the company has less dominance in other international markets.



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