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RIM hit by plummeting sales, prices and profits, announces layoffs

post #1 of 57
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Once a rising star among smartphones, Canadian Blackberry maker Research In Motion announced sharply lower profits related to product delays an intense competition, pushing it to sack workers while the market attacked the company's valuation.

RIM announced to investors that its first fiscal quarter revenues of 2012 were up 16 percent over the previous year-ago quarter, but that growth paled in comparison to the 113 percent annual growth Apple reported on the back of iPhone sales in its most recent quarter.

However, RIM's earnings were down for the year and sequentially, reaching just $695 million this quarter compared to $934 million in the previous quarter and $768 million in its year ago quarter.

The rest of the smartphone industry has been expanding by an average of around 70 percent, leaving RIM's shortfall a particular anomaly. The company blamed new product introductions and delays for its weak earnings, and said the same factors would lead to "a lower than expected outlook in the second quarter," in the words of co-chief executive Jim Balsillie.

Balsillie added, "RIMs business is profitable and remains solid overall with growing market share in numerous markets around the world and a strong balance sheet with almost $3 billion in cash. We believe that with the new products scheduled for launch in the next few months and realigning our cost structure, RIM will see strong profit growth in the latter part of fiscal 2012."

Reacting to the disappointing performance in the quarter, RIM said it would "begin a program to streamline operations across the organization, which will include a headcount reduction." The company also announced a share repurchase program, which enables a company to return capital to its shareholders, a move made when a firm sees shoring up its stock price as more important than investing in its own growth.

In April, RIM had announced a readjusted outlook calling for just 13.5 to 14.5 million Blackberry devices to be sold during the quarter, but it failed to meet even that lowered expectation, with unit sales reaching just 13.2 million.

In contrast, Apple sold 18.65 million iPhones in its most recent quarter (which does not align exactly with RIM's).

In 2008, Apple's chief executive Steve Jobs announced in the company's third quarter results that "Apple beat RIM" in its unit sales, noting that "RIM is a good company that makes good products. And so it is surprising that after only fifteen months on the market that we could outsell them in any quarter."

RIM did announce higher shipments for its PlayBook tablet than analysts had expected (500,000 vs 400,000), but following its announcements investors failed to see much upside potential in that new product, trading the company down in value by more than 15 percent.
post #2 of 57
2012! huh since the world will be ending : returning $ to stocholders is a good move so we can spend it all before the end of the world. yeah, meanwhile in other news: apple going to cloud to escape end of world

Originally by Rickers - 2014 : Cook & will bury Apple.  They can only ride Steve's ghost so long.


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Originally by Rickers - 2014 : Cook & will bury Apple.  They can only ride Steve's ghost so long.


History reduce Apple Watch.... to a footnote in the annals of technology - Benjamin Frost Dec 2014



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post #3 of 57
As a Canadian, I am sad to see that there has to be layoffs in our country. On another note, RIM has for too long forgotten that other phones can now email. That was the only thing that made the Blackberry so big in the past, was email and web browsing. Today with Droid and IOS, there is really no reason to have a BB. I know that some people will say that its more compatible with large organizations and more secure, but IOS is catching up and advancing by leaps and bounds every single year, while BB trys to hold on to its special "messaging" and its emailing abilities. They need to rethink everything.
post #4 of 57
I wonder if Michael Dell has offered the same advice to Balsillie that he did to Steve some years back?
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post #5 of 57
They held on to record sales and profits a lot longer than I expected. I hope, for their sake, thy have something really great in the works.
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post #6 of 57
Quote:
Originally Posted by polarissucks View Post

As a Canadian, I am sad to see that there has to be layoffs in our country. On another note, RIM has for too long forgotten that other phones can now email. That was the only thing that made the Blackberry so big in the past, was email and web browsing. Today with Droid and IOS, there is really no reason to have a BB. I know that some people will say that its more compatible with large organizations and more secure, but IOS is catching up and advancing by leaps and bounds every single year, while BB trys to hold on to its special "messaging" and its emailing abilities. They need to rethink everything.

Once iOS5 is out with iMessage will be the final punch to BB phones..

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post #7 of 57
Since when is not rising as fast as Android or Apple the same thing as plummeting? RIM are holding their own, 500k Playbooks is actually more than I was expecting, and may turn out to be better than most of the Android competition.

The smartphone segment is expanding at a rapid pace but mostly at the bottom end, neither RIM nor Apple which both have profitable businesses at the top end of it are certain to hold onto share of the smartphone segment, even if they manage to keep increasing their handset shipments.

A bit of proportion would be nice, this isn't the register!
post #8 of 57
Quote:
Originally Posted by cloudgazer View Post

Since when is not rising as fast as Android or Apple the same thing as plummeting? RIM are holding their own, 500k Playbooks is actually more than I was expecting, and may turn out to be better than most of the Android competition.

The smartphone segment is expanding at a rapid pace but mostly at the bottom end, neither RIM nor Apple which both have profitable businesses at the top end of it are certain to hold onto share of the smartphone segment, even if they manage to keep increasing their handset shipments.

A bit of proportion would be nice, this isn't the register!

That's 500k Playbooks in retail stores, not consumer hands,in the quarter! Market share down. RIM not meeting financial goals. Now layoffs. Aftermarket tracings shows stock price tumbling. Most likely stock holders are dumping their stock as fast as they can.

This company is in the toilet and you'd have to be crazy to buy any of their products or stock at this point.
post #9 of 57
Quote:
Originally Posted by Mac.World View Post

....This company is in the toilet and you'd have to be crazy to buy any of their products or stock at this point.

I wish my toilet was earning 640 million

Your quote is verbatim what people said about Apple in 1995. People said I was crazy to buy their computers.

RIM have to worry and react, but to say they are finished seems premature.
post #10 of 57
Quote:
Originally Posted by Mac.World View Post

That's 500k Playbooks in retail stores, not consumer hands,in the quarter! Market share down. RIM not meeting financial goals. Now layoffs. Aftermarket tracings shows stock price tumbling. Most likely stock holders are dumping their stock as fast as they can.

This company is in the toilet and you'd have to be crazy to buy any of their products or stock at this point.

Short the stock/or Put options guys lots of money to be made

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post #11 of 57
Quote:
Originally Posted by Mac.World View Post

This company is in the toilet and you'd have to be crazy to buy any of their products or stock at this point.

I still disagree, Motorola & Sony-Ericsson are in the toilet, Nokia is falling into the toilet, RIM is balanced on, well the rim
post #12 of 57
Quote:
Originally Posted by cloudgazer View Post

Since when is not rising as fast as Android or Apple the same thing as plummeting? RIM are holding their own, 500k Playbooks is actually more than I was expecting, and may turn out to be better than most of the Android competition.

The smartphone segment is expanding at a rapid pace but mostly at the bottom end, neither RIM nor Apple which both have profitable businesses at the top end of it are certain to hold onto share of the smartphone segment, even if they manage to keep increasing their handset shipments.

A bit of proportion would be nice, this isn't the register!

The problem is that sales were up just 16% YOY, while smartphones sales were up 72% YOY, and while that's not entirely comparable, RIM has been adjusting their sales down for three quarters in a row, and their BB shipments, as opposed to the sales numbers Apple posts, were below the minimum they predicted for the quarter at 13.2 million. They predicted 13.5 to 14.5 million. Sales were also down from their predictions of just under $5.2 billion at $4.9 billion. Those numbers were not good. Profits were also less than last years' quarter.

And it's very curious that when asked about actual sales figures, they said that they didn't have them. That was both for the BB and the Playbook. So how many did they sell? We don't know.

Over all, they're in trouble. And when an analyst asked, after the co-CEOs' were busy praising each other and announced layoffs, if they weren't the problem, they said no, of course not.

As if it's never the fault of the guys on top who actually make all the decisions. I'll tell you something. I had two businesses, and all the successes and failures were the responsibility of myself and my partners, never the people who worked for us.
post #13 of 57
Quote:
Originally Posted by See Flat View Post

I wish my toilet was earning 640 million

Your quote is verbatim what people said about Apple in 1995. People said I was crazy to buy their computers.

RIM have to worry and react, but to say they are finished seems premature.

That's less profit than last years quarter.

But the difference between Apple and RIM now is that RIM has no one who can do what Jobs has done. Both of these guys at RIM are responsible for the mess it's in, and neither seems to understand that from the answers to the questions about that given in the call today. They both stated, a number of times, how vital they both were to the business, and neither accepted that it was their decisions that put RIM in the boat it's in now.

They're not finished yet, but everything they're doing has to work out just perfectly, or they will be. All of their top line phones that have come out in the past three years have either bombed, or have had, at best, disappointing sales.
post #14 of 57
Quote:
Originally Posted by cloudgazer View Post

I still disagree, Motorola & Sony-Ericsson are in the toilet, Nokia is falling into the toilet, RIM is balanced on, well the rim

But Moto has been doing better as of late. Even S-E has seen some sales increases, even though they've done poorly over the years, they've got two strong companies behind them.
post #15 of 57
Rim make decent devices, but they are getting very long in the tooth. I want RIM to do well, I know people that work at RIM, they have been very generous in the community and supporting local universities. They need to get on track with what consumers want now, not what they wanted six years ago. They also need ONE good CEO with good vision.

RIM are on their way to being in serious trouble, but there is still time to sort things out.
post #16 of 57
Rim have stroked a deal with sears, i'm sure sears VPs thinks they can hype Sears grandma image with cool new gadget and they sock pile those playbook in all their store. A sears store nearby in a shopping mall put some banners outside, the display inside is always desert. The local tv news reported they sold about 10 the lauch day, the local apple store located in the same mall sold about 100 to 200 a day...

I'll wait for there next quarter shipment see if the can keep up stacking garbage to retailers who will get anything for trying to surf iPad waves and crying see people get out of the mall thru their store with Apple bags.
post #17 of 57
Quote:
Originally Posted by daylove22 View Post

Once iOS5 is out with iMessage will be the final punch to BB phones..

Not unless the iPhone comes out with a keyboard version. I love my iphone, but for everyday business communicator use, my 9650 is superior. Oh, and our corporate email has to be on BB, not iPhones, at least at present.
post #18 of 57
I love my 9650, but this whole thing appears to be Deja Vu all over again. Remember Palm and their upgrade to various new OS's, and the years it took to take place?
post #19 of 57
Quote:
Originally Posted by solipsism View Post

They held on to record sales and profits a lot longer than I expected. I hope, for their sake, thy have something really great in the works.

Judging by the Playbook, that's not bloody likely.
post #20 of 57
Quote:
Originally Posted by melgross View Post

But Moto has been doing better as of late. Even S-E has seen some sales increases, even though they've done poorly over the years, they've got two strong companies behind them.

Moto & S-E are both earning razor thin profits, RIM is probably still 2nd or 3rd highest profits out of the handset makers. Which position would you prefer to be in, a commodity shifter of boxes running somebody elses OS on which you earn effectively nothing, or the sole maker of handsets on a successful, albeit stagnant proprietary OS which earns substantial profits?

To put this into perspective, RIM made $695mil net income for the quarter. Our last figures for Moto were 2010Q4 when they made 110mil, and our last for Sony-Ericcson were 2011Q1 - of 11mil. Short of a miracle, RIM made more in the first quarter than Moto & S-E combined will make in the entire year.

So if RIM is in the toilet, Moto & S-E have already been flushed.
post #21 of 57
Quote:
Originally Posted by daylove22 View Post

Short the stock/or Put options guys lots of money to be made

you think they can go much lower?...I started buying Puts on April 13...made 5 figures could have been 6 if I kept the position open up to today. I may dip back in tomorrow for a quick scalp.
post #22 of 57
Quote:
Originally Posted by rkevwill View Post

Not unless the iPhone comes out with a keyboard version. I love my iphone, but for everyday business communicator use, my 9650 is superior. Oh, and our corporate email has to be on BB, not iPhones, at least at present.

Don't go by the keyboard. I'm not saying that no one wants one anymore, but fewer phones are made with one, and there's a reason for that. The problem for RIM has been that their version was a bomb, in that it was terrible. The Storm was revised three times, and still didn't sell.

More people are used to touch keyboards. I know of a number of people who have moved from the BB to iPhones and Android phones, and after some period of nervousness, are now pretty happy with the switch.

I wouldn't be surprised if ten years from now some little kid will look up from her touch screen and say; "Daddy, tell me about those funny buttons you used to use."
post #23 of 57
Quote:
Originally Posted by cloudgazer View Post

Moto & S-E are both earning razor thin profits, RIM is probably still 2nd or 3rd highest profits out of the handset makers. Which position would you prefer to be in, a commodity shifter of boxes running somebody elses OS on which you earn effectively nothing, or the sole maker of handsets on a successful, albeit stagnant proprietary OS which earns substantial profits?

To put this into perspective, RIM made $695mil net income for the quarter. Our last figures for Moto were 2010Q4 when they made 110mil, and our last for Sony-Ericcson were 2011Q1 - of 11mil. Short of a miracle, RIM made more in the first quarter than Moto & S-E combined will make in the entire year.

So if RIM is in the toilet, Moto & S-E have already been flushed.

Well, Moto is now a smaller company. That's very true. But they've been doing better, and RIM is doing worse. So which way would you prefer to be going, up or down?

S-E is different. They're not doing great, but as I mentioned they've got two big and strong companies behind them. RIM is on their own.

Right now, RIM has to execute perfectly. Any problem, and they're in more trouble. Forget about Moto and S-E for now.

But I'll tell you something. It's in Apples' best interest for both Nokia and RIm to be doing well. That goes for the others as well. It's the old divide and conquer. If these companies go down, then it's pretty much Android and iOS phones. In that case, I can see Android getting 75% of the market. Apple would have to work very hard to change that. And with Android having that much share, much development would shift to them, even though their owners are cheap, And don't buy much of anything.

But with more companies in play, it will be harder for Android to get above 50%. and that would be better for Apple, even if their share is 20%. I don't believe that WP7 will ever get to 20% as both IDc and Gartner say.
post #24 of 57
One person does not a trend make or mirror the masses, but one friend who had a BB for years recently gave up on RIM and bought a Sprint Evo. Don't know what BB she had or how old it was, but said she got tired of the corny web browser and phone crashing (my manager who bought a Storm at launch also complained of it crashing and recently got a Droid Something). I think many business folks will always buy BB, but the avg consumer wants a bigger screen, apps, video, etc and just what iOS and Android users have.

All just IMO.
post #25 of 57
Quote:
Originally Posted by dish View Post

you think they can go much lower?...I started buying Puts on April 13...made 5 figures could have been 6 if I kept the position open up to today. I may dip back in tomorrow for a quick scalp.

It's a danger right now. There's no way to be sure which way the stock will blow over the short term. Over the longer term, I think it will have problems.
post #26 of 57
500,000 v. 400,000 shipments.

Gee, why not go for a nice, round figure like 2 million, RIM?
post #27 of 57
Quote:
Originally Posted by melgross View Post

Well, Moto is now a smaller company. That's very true. But they've been doing better, and RIM is doing worse. So which way would you prefer to be going, up or down?

There was an article on Asymco a while ago that basically said that there had never been a case of a handset maker recovering once they'd lost profitibility - if they're right then RIM is in a far better position. In the case of Moto their profits aren't rising because of increased market-share, but thanks to aggressive cost cutting and their market switching from dumbphones to smartphones. The phrase 'dead-cat bounce' springs to mind.

Quote:
S-E is different. They're not doing great, but as I mentioned they've got two big and strong companies behind them. RIM is on their own.

Yes but eventually mummy & daddy will take a deep breath and turn off the life-support machine. S-E is particularly bad for Sony because it damages their brand by association with failure. At some point they will either sell it or merge it into yet another handset maker - Nokia perhaps, since misery loves company.

Quote:
Right now, RIM has to execute perfectly. Any problem, and they're in more trouble. Forget about Moto and S-E for now.

I certainly wouldn't argue with that, but I think they can continue to serve their core market of enterprise users with a promise of security and attention to enterprise needs. Apple doesn't really play to enterprise, it's a consumer oriented firm deep in its bones - and android is terrifying to enterprise users. RIMs biggest threat in its core market is probably from WP7 - since Microsoft does understand enterprise users, even if the relationship between them is an abusive one - enterprise customers feel safe with Microsoft even as it slaps them around, shouts at them and tells them it's all their fault.

As for Android, I don't expect it to ever totally dominate the mobile market, because Google just don't need it to. Once MS are beaten back and the mobile market is a safe place for Google driven search, maps, mail and sundry services the chocolate factory will shift resources to fighting Microsoft on another front. Google have no financial interest in making Android compete with iOS at the high-end, and at current rates none of the Android handset makers will have the financial strength to do it.
post #28 of 57
Bad tech news for Canadians. Bad hockey news for Canadians. What's next? A maple syrup famine?

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post #29 of 57
Quote:
Originally Posted by SockRolid View Post

Bad tech news for Canadians. Bad hockey news for Canadians. What's next? A maple syrup famine?

America declares war on Canada for their oil sands.
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post #30 of 57
They need to release a new phone called the "Job". The RIM J...

Well, maybe that's not such a good idea.
post #31 of 57
Quote:
Originally Posted by MDCragg View Post

They need to release a new phone called the "Job". The RIM J...

Well, maybe that's not such a good idea.

Presumably the screensaver would show a chef tossing salad?
post #32 of 57
Quote:
Originally Posted by solipsism View Post

America declares war on Canada for their oil sands.

Come to think of it, they have been harboring al Qaeda and WMDs.

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post #33 of 57
Quote:
Originally Posted by rkevwill View Post

Not unless the iPhone comes out with a keyboard version. I love my iphone, but for everyday business communicator use, my 9650 is superior. Oh, and our corporate email has to be on BB, not iPhones, at least at present.

explain superior..I can type faster on my iphone than my old BB Bold..

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post #34 of 57
Gee... and here I was almost convinced that Flash in a tablet was going to be the "killer app."

Actually, it would have helped my initial impressions of the Playbook if the browser didn't consistently crash on me when trying it out.
post #35 of 57
Quote:
Originally Posted by Suddenly Newton View Post

Come to think of it, they have been harboring al Qaeda and WMDs.

Yes, and their overwhelmingly polite denials are PROOF of their deception.
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post #36 of 57
I guess I won't be getting that RIM job afterall...
post #37 of 57
Quote:
Originally Posted by daylove22 View Post

Short the stock/or Put options guys lots of money to be made

Already did, and have been saying that RIM is finished by the end of the year or earliest Q1-2012 since the beginning of the year. They're right on track
Knowing what you are talking about would help you understand why you are so wrong. By "Realistic" - AI Forum Member
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post #38 of 57
Quote:
Originally Posted by polarissucks View Post

As a Canadian, I am sad to see that there has to be layoffs in our country. On another note, RIM has for too long forgotten that other phones can now email. That was the only thing that made the Blackberry so big in the past, was email and web browsing. Today with Droid and IOS, there is really no reason to have a BB. I know that some people will say that its more compatible with large organizations and more secure, but IOS is catching up and advancing by leaps and bounds every single year, while BB trys to hold on to its special "messaging" and its emailing abilities. They need to rethink everything.

Not a good day for the (B)s --- Balsillie -- Balmer -- Black-Berry
Balsillie's infatuation with Hockey & Balmer's reaction at the time when iPhone came out, ridiculing it,not seeing its potential has and will cost them dearly. Both are in danger of loosing there jobs. As a Canadian who has no time for either our violent disgrace called the NHL and no time for anything to do with Microsoft.

My reaction Ah well !!

But that does not make it any easier for those who are loosing jobs due to their lack of vision.
post #39 of 57
This news is just sad. It's like watching the Titanic sink in slow motion. A few hundred thousand playbooks? That's definitely not sell through. I wonder where they've dumped the excess inventory.

If anything, all the waste of plastic angers me... And of course the layoffs.
post #40 of 57
Quote:
Originally Posted by SockRolid View Post

Bad tech news for Canadians. Bad hockey news for Canadians. What's next? A maple syrup famine?



Quote:
Originally Posted by tonton View Post

Judging by the Playbook, that's not bloody likely.

I'm not going to say "I called it" but it smelled fishy right from the start. I wanted it to succeed but it fared/failed even worse than I expected.

Quote:
Originally Posted by melgross View Post

That's less profit than last years quarter.

But the difference between Apple and RIM now is that RIM has no one who can do what Jobs has done. Both of these guys at RIM are responsible for the mess it's in, and neither seems to understand that from the answers to the questions about that given in the call today. They both stated, a number of times, how vital they both were to the business, and neither accepted that it was their decisions that put RIM in the boat it's in now.

They're not finished yet, but everything they're doing has to work out just perfectly, or they will be. All of their top line phones that have come out in the past three years have either bombed, or have had, at best, disappointing sales.

To use a fairly universal sports analogy, RIM basically has to score a lot of goals in the last 15 minutes of the game. But the players are all dead tired, suffering from cramp and the two co-coaches have been drooling over their playbooks with a glazed look in their eyes.
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