Grim Outlook as Blackberry Maker RIM Gives Up on Consumer Market

Waterloo, Ontario based company Research In Motion announced its first quarterly loss since 2005 yesterday. This announcement comes shortly after the resignation of longtime Co-CEO and board member, Jim Balsillie.

Jim Balsillie
Jim Balsillie (Courtesy of Bloomberg News)

Below are the highlights from the quarterly report.

  • $2.1 billion in cash, cash equivalents, short-term and long-term investments at the end of the quarter, which increased by approximately $610 million in the quarter
  • Cash flow from operations of approximately $1.1 billion, up from approximately $900 million in Q3
  • Revenue of $4.2 billion, down 19% from the third quarter
  • GAAP net loss in Q4 of $125 million or $0.24 per share diluted; adjusted net income of $418 million or $0.80 per share diluted
  • BlackBerry smartphone shipments of 11.1 million in Q4, down 21% from Q3
  • RIM to discontinue providing specific quantitative guidance
  • RIM provides update on organizational changes

Current CEO, Thorsten Heins, is looking to change RIM’s focus as the company mounts up against continued pressure in the marketplace. Despite the grim report, Heins tries to put a positive spin in the report by saying, “I have assessed many aspects of RIM’s business during my first 10 weeks as CEO. I have confirmed that the Company has substantial strengths that can be further leveraged to improve our financial performance, including RIM’s global network infrastructure, a strong enterprise offering and a large and growing base of more than 77 million subscribers.”

It appears that Heins will be making organizational changes as it was announced the COO, Jim Rowan, and its CTO, David Yach, would be leaving. The company will also leverage its resources toward the corporate marketplace and steer away from the consumer market where it has lost ground against the likes of Apple and Google.

Heins definitely has his work cut out for him. The short term outlook for RIM does not look good as they have a stockpile of devices sitting stagnant on the shelves. They also are supposed to roll out a new line of Blackberry 10 in the near future. It remains to be seen what partnerships the pride of Canada can muster in its bid to recover. It may actually be a good investment in the long term but I wouldn’t bet the farm.

Published by

Darrin Jenkins

Darrin is an IT manager for a large electrical contractor in Louisville KY. He is married and has 3 kids. He loves helping people with their technology needs. He runs a blog called Say Geek!