While smartphones revolutionized the cellphone industry overnight, it did so making names and breaking others. New entrants were lavished with a market that responded resoundingly well, while old hands had to experience the loss of both customers and business, being unable to either meet the new kid on the block’s thoroughbred pace or retain once loyal customers. As a result, powerhouses were unseated, and in most cases, have failed to recover. This is particularly true in the case of Blackberry maker Research in Motion (RIM).
The Canadian firm has, over the past couple of years, seen its business dwindle, coupled with some unforgivable, at least for users, gaffes that saw the company announce that it was considering moving out of the consumer business and sticking only to corporate clients. But while it has been doom and gloom for the company, its latest financial reports, though not showing a turnaround, are definitely better than expected.
The company announced that it had posted a lower-than-expected loss for its second quarter, which immediately reflected on its share price, sending it up by 18 percent in after-hours trading on Thursday.
RIM reported a net loss in its second quarter of $235 million, in stark comparison to the very same quarter last year that saw a $329 million profit. The loss, representing a 31 percent decrease in revenues, was actually lower than expected, and the possible silver lining to the results was that because the loss was lower than expected, revenues were actually up by 2 percent, at $2.9 billion compared to this year’s first quarter of $2.8 billion, increasing the company’s cash on hand from $2.2 billion to $2.3 billion. For the period, RIM sold 7.4 million Blackberry devices and 130,000 Blackberry PlayBook tablets.
RIM is now looking towards its next big launch as it prepares to unveil its next-generation models, which will run on the all new Blackberry operating system, the BB10.
“Despite the significant changes we are implementing across the organization, our second quarter results demonstrate that RIM is progressing on its financial and operational commitments during this major transition,” CEO Thorsten Heins said. “Make no mistake about it, we understand that we have much more work to do, but we are making the organizational changes to drive improvements across the company, our employees are committed and motivated, and BlackBerry 10 is on track to launch in the first calendar quarter of 2013.”
commented, “Its strength is the business-centric audience—and what's hurting them most is they still don't have Blackberry 10 to offer them. But given the business market is not that happy with Android over security, and Apple's prevalence means it is also becoming a target—there is still a reasonable chance RIM can still come back. Of course, Microsoft is targeting the same audience with Windows Phone 8, but there is an opportunity for a challenger in 2013.”of analyst firm Enderle Group