The shifting fortunes of Research in Motion, the company behind the BlackBerry, may just change the way the company does business, as today it was announced that the company reported a massive loss in the last quarter.
RIM and its best-selling Blackberry were the first on the market with the next generation of cell phones, but increasingly, the phone, which has quite a large user base, accounting for about 3 percent of all mobile phones sold in the world, lost out to Apple and Android smartphones, in addition to suffering internal uncertainty, thanks to a corporate shake-up as well as the now infamous episode when BlackBerry had shut down.
And now the Canadian tech company announced a loss of $125 million in the first quarter of 2012 with a drop in revenues as well as Blackberry sales. But this wasn’t the only bad news for the company. Its poor performance prompted the resignation of co-chief executive Jim Balsillie and chief technology officer David Yacht. There was even bad news for customers, as RIM announced that it would be shifting its focus away from commercial consumers to corporate customers.
Of course, the figures released by the company are quite explanatory of these sudden shifts in direction for RIM. While it recorded a loss this year, it is in stark comparison to the $934 million it made in profits last year.
BlackBerry sales fell by about 11.1 million units, taking a 21 percent hit in comparison to the last quarter. In turn, for the company’s full fiscal year, revenue dropped from $5.2 billion to $4.2 billion while net profits also dropped from $3.4 billion the last year to $1.2 billion this year. Stock prices were also affected as stock value fell by 9 percent in after-hours trading, the stock itself have had an 80 percent drop this past year.
Of course, while this all wasn’t bad enough, the new direction for the company, refocusing on corporate and business clients, is seen as a drastic move, but according to newly appointed chief executive Thorsten Heins, it’s a way to turn the business around.
"We plan to refocus on the enterprise business and capitalise on our leading position in this segment,” said Heins, adding, "We believe that BlackBerry cannot succeed if we tried to be everybody's darling and all things to all people. Therefore, we plan to build on our strength."
Analysts are sceptical, as Eric Jackson of New York’s Ironfire Capital said, "They clearly have no fix on when this process will bottom, and until it really does, it's going to be very difficult for a lot of investors to come back in.”