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RIM chief forecasts grim Q1 performance after shares halted

post #1 of 33
Thread Starter 
Trading of Research in Motion shares were halted briefly early Tuesday ahead of an announcement from CEO Thorsten Heins, who said to expect an operating loss for the company's first fiscal quarter of 2012.

When trading resumed after Heins' promised statement, RIMM shares saw a sharp 13 percent decline fueled by growing concern that the company's downward spiral would continue, but ended the day up 2.09 percent, reports Barron's.

The news comes on the heels of recent reports that the value of RIM's unsold inventory grew to some $1 billion last quarter, up from $618 million a year ago and double what it was in 2008. The total doesn't include unsold smartphones and tablets held by resellers around the world and it is expected that the company will be forced to write down the huge stockpile of devices.

In his statement on Tuesday, Heins said that "RIM is going through a significant transformation as we move towards the BlackBerry 10 launch, and our financial performance will continue to be challenging for the next few quarters." He cites growing competition in the smartphone sector as driving the poor results, but remains optimistic about the company's direction and says it will continue to be "aggressive" in both enterprise and consumer markets.

The CEO expects first quarter performance to yield an increase to the $2.1 billion cash position it held at the end of the last fiscal year.

Heins
RIM CEO Thorsten Heins looks to BlackBerry 10 as sales atrophy. | Source: BusinessWeek


Also revealed in Heins' announcement was the company's retention of three financial advisors from J.P. Morgan Securities LLC and RBC Capital Markets to help "assist the Company and our Board of Directors in reviewing RIM?s business and financial performance."

"These advisors have been tasked to help us with the strategic review we referenced on our year-end financial results conference call and to evaluate the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives," Heins said.

Heins points out that, despite the negative outlook for the upcoming quarters, there have been positive changes made in recent months:

Despite the current challenges, we have made significant progress on a number of fronts in the past few months:

  • Our annual BlackBerry World conference and BlackBerry 10 Jam took place earlier this month and both were tremendously successful. More than 5,000 developers, partners, carriers and enterprise customers from 115 different countries saw the first glimpses of our next-generation BlackBerry 10 platform and their response was encouraging.

  • Our developer partners have been enthusiastic with the BlackBerry 10 Dev Alpha prototype unit we distributed at BlackBerry World and many are well underway in developing applications to be ready for the launch of BlackBerry 10 in the latter part of calendar 2012.

  • The support and enthusiasm from our developer community is also reflected in our app growth, where we now feature more than 80,000 apps, which represents a 220% increase from one year ago, and more than 15,000 apps for PlayBook compared to less than 2,000 last year. We believe this bodes well for our ecosystem as we get set to launch BlackBerry 10.

  • We are making steady progress with the innovation of our next-generation BlackBerry 10 mobile computing platform, which is still on track to launch in the latter part of calendar 2012.

  • Our global subscriber base continued to grow this quarter to approximately 78 million, driven primarily by growth in international markets, which is partially offset by high churn in the United States, and our BBM user base has grown to approximately 59 million users globally.

  • Our strong brand internationally was recently enhanced with the successful launch of two new BlackBerry 7 phones in India and Latin America.

Also announced today was the hiring of two new executives, Chief Operating Officer Kristian Tear and Chief Marketing Officer Frank Boulben. Tear will take the position once held by current chief executive Heins, who replaced co-founders and longtime co-CEOs Mike Lazaridis and Jim Balsillie, while Boulben replaces Keith Pardy.

Heins reiterated a high level of confidence in the upcoming BlackBerry 10 ecosystem, mentioning the OS no less than nine times in the brief statement. RIM's next-generation platform has seen a number of delays and a recent prototype was described as being a mini PlayBook.

Most recently, reports pointed to a major upcoming job cut that could see the termination of up to 40 percent of RIM's workforce.

The Waterloo, Ontario-based company is scheduled to hold its first quarter fiscal 2013 conference call on June 28 with discussions ranging from today's issues to overall company performance. As of this writing, after-hours trading saw RIMM shares down 7.75 percent at $10.36.
post #2 of 33

The death spiral is never pretty, but in the case of large, once popular brands it is a spectacle to see the depth of management denial as they stagger towards the doom that everyone outside the company has seen coming for years. RIM corporate meetings probably involve a lot of hands over ears and a chorus of "la-la-la-la-la, everything is just peachy".

 

Take heart RIM fans, the corporate name will surely find a new home with some low cost Asian manufacturer.

post #3 of 33
Cry me a river.

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post #4 of 33
Quote:
Originally Posted by Hyram Gestan View Post

Nobody will buy a phone without a physical keyboard, eh RIM?

 

Who's laughing NOW!

 

Funny how clueless pronunciations and snarky putdowns come back to bite you in the ass. Michael Dell knows that in spades these days. So does Steve Ballmer.

post #5 of 33

I remember some years back that RIM was accused of channel-stuffing, but Wall Street didn't care and just kept pumping up the share price claiming that the BlackBerry was kicking the iPhone's ass.  What gets me is that Wall Street had a nearly unanimous belief that RIM was unbeatable in the smartphone space.  Certainly more so than they feel about the chances of the iPhone being able to hold market share for the next few years.  Wall Street has some cockeyed beliefs that don't necessarily hold water.  I certainly heard a lot more about the imminent death of Apple than I ever heard about the imminent death of RIM.

post #6 of 33

Okay okay, Apple has killed RIM. We all know that. Can't we all agree that RIM's failure is no longer news worthy?

post #7 of 33
Quote:
Originally Posted by dualie View Post
Can't we all agree that RIM's failure is no longer news worthy?

 

No?

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post #8 of 33
Quote:
Originally Posted by dualie View Post

Okay okay, Apple has killed RIM. We all know that. Can't we all agree that RIM's failure is no longer news worthy?

It's plenty newsworthy: such regular reminders are necessary to get people to understand that complacency breeds failure, and that creative destruction is a central element of reinvention and wealth creation. (Apple itself learned that lesson; it's one that won't be forgotten soon, although even they will forget some day.....)

 

RIM's better hope would have been to milk the cash flows of a steadily smaller and smaller faithful group of consumers from a declining product (there are still many niche segments of developed markets and large segments of underdeveloped markets). That would have required them to be strategic about it -- i.e., manage decline -- rather than try to do lame 'me-too' stuff too much after the fact.

post #9 of 33
Quote:
Originally Posted by Hyram Gestan View Post

Nobody will buy a phone without a physical keyboard, eh RIM?

 

Who's laughing NOW!


Why stop at just that?  Let's keep the love (and laughs) going!!

http://www.businessinsider.com/rim-ceo-quotes-2011-9?op=1

post #10 of 33

From what I read RIM never laughed at the iPhone. They panicked when Steve Jobs iPhone announcement in January, 2007. Unfortunately, 5 years later, they still have not responded adequately to the challenge.

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post #11 of 33

I think it's absolutely terrible that the previous CEO's of RIM threw this guy Thorston Heins under the bus for their mistakes. They should have done the responsible thing: taken blame for their mistakes, and shut down their company. Instead, they're making the company go bankrupt under this guy instead.

post #12 of 33
Quote:
Originally Posted by AppleInsider View Post

The CEO expects first quarter performance to yield an increase to the $2.1 billion cash position it held at the end of the last fiscal year.

Everyone seems to have missed this one. That is a CRITICAL fact considering that their cash has been declining for some time. Keep in mind that writing down their inventory does not affect cash (unless they have to credit resellers for unsold inventory). They are on the cusp of launching new products and if they cash holds out, they just might make it - at least long enough to merge with someone.

Quote:
Originally Posted by jd_in_sb View Post

From what I read RIM never laughed at the iPhone. They panicked when Steve Jobs iPhone announcement in January, 2007. Unfortunately, 5 years later, they still have not responded adequately to the challenge.

Actually, they were quite negative about the iPhone. See the quotes above. They didn't laugh, but they clearly implied that it could not succeed.
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post #13 of 33

RIM killed themselves.

post #14 of 33
Quote:
Originally Posted by Hyram Gestan View Post

Nobody will buy a phone without a physical keyboard, eh RIM?

 

Who's laughing NOW!

That is one quote for the ages for sure!

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post #15 of 33

I heard Facebook is looking to get in the hardware business - they could buy RIM plus the Opera browser and make a Facepalm phone.   

post #16 of 33
Quote:
Originally Posted by sflocal View Post


Why stop at just that?  Let's keep the love (and laughs) going!!

http://www.businessinsider.com/rim-ceo-quotes-2011-9?op=1

Thank you.  Great to see all that in one place.  I know it's sad to see any company die and jobs with it but these idiots running RIM were really so far out of touch it is funny.  Each one of these quotes was discussed on AI and it was really fun defending Apple at the time.

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post #17 of 33
Quote:
Originally Posted by markbyrn View Post

I heard Facebook is looking to get in the hardware business...

And hiring ex Apple staff ... that sounds familiar doesn't it.  No clue how to innovate so 'let's buy inside info and steal others IP if we can.'

 

Boy did Billy Gates start a trend or what?

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post #18 of 33

Blockbuster went through the exact same thing with Netflix.  The CEO said getting a movie in the mail doesn't offer the same experience as going to an actual brick and mortar store.

post #19 of 33

Facebook is desperate after their stock fell 30%.  They're trying to develop their own Facebook ecosystem.  When their phone's come out they will dumb down or eliminate their apps on other phones betting that people will buy their phone's just to get Facebook.

 

Facebook shares the same corporate strategy as Google and Microsoft - cut throat, but they just don't get it so they just throw cash at whatever they can come up with.  Companies that can't think for themselves eventually run out of money unless they can convince other clueless people to give them more money.  Back in 2000 I thought Microsoft would be gone by now.  Windows 8 may just be another nail in the coffin.

post #20 of 33

and the petty reporting on rim's demise continues... let's get to wwdc and some apple announcements to have a few things to talk about here instead of the usual rim schadenfreude fest...

post #21 of 33

RIM's corporate location says it all :  Waterloo.

post #22 of 33

"grim Q1 performance"

 

Backwards is classed as a type of performance now?

 

Quote:

Originally Posted by dualie View Post

Okay okay, Apple has killed RIM. We all know that. Can't we all agree that RIM's failure is no longer news worthy?

 

Ever driven past a car accident and couldn't help but look and comment?

 

Yep.

 

Us too.

 

Quote:
Originally Posted by myapplelove View Post

and the petty reporting on rim's demise continues... let's get to wwdc and some apple announcements to have a few things to talk about here instead of the usual rim schadenfreude fest...

 

Nice use of the word 'schadenfreude' from a guy that does nothing but the same towards Apple.

 

YOU F_CKING HYP_CRITE.

 

Wanna buy a vowel?

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post #23 of 33

Actually.. RIMM indeed did laugh at Apple back in 2007.  In fact, they absolutely did not believe that Apple had created such a device.  The word was that they were 'incredulous' that such a device existed.  They never considered Apple or Google any real threat until 2010, where it was too little, too late.

post #24 of 33
Quote:
Originally Posted by lkrupp View Post

Funny how clueless pronunciations and snarky putdowns come back to bite you in the ass. Michael Dell knows that in spades these days. So does Steve Ballmer.
So does RIM.
post #25 of 33
Quote:
Originally Posted by gfengstad View Post

Actually.. RIMM indeed did laugh at Apple back in 2007.  In fact, they absolutely did not believe that Apple had created such a device.  The word was that they were 'incredulous' that such a device existed.  They never considered Apple or Google any real threat until 2010, where it was too little, too late.


Yeah that is what I had read about their reaction.  They saw Steve's keynote and proclaimed the iPhone impossible to do without suffering a two hour battery life.  Then when it came out they bought one and opened it up.  They were shocked to see the giant battery and the astonishing degree of miniaturization that had been achieved with the components.  Again they were stunned and realized they had absolutely no response to the Apple product.

 

"Any sufficiently advanced technology is indistinguishable from magic."

 

The Rim team saw magic that day.

post #26 of 33

yup, RIM is down to its last desperate Hail Mary play - BB 10. it needs a touchdown just to stay in the game.

 

yeah, FB would be smart to buy 'em up. but i think Zuckerberg thinks he's the next SJ. or at least BG.

post #27 of 33
Quote:
Originally Posted by markbyrn View Post

I heard Facebook is looking to get in the hardware business - they could buy RIM plus the Opera browser and make a Facepalm phone.   

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post #28 of 33
Quote:
Originally Posted by GTR View Post

 

Ever driven past a car accident and couldn't help but look and comment?

 

Yep.

 

Us too.

 

 

Nice use of the word 'schadenfreude' from a guy that does nothing but the same towards Apple.

 

YOU F_CKING HYP_CRITE.

 

Wanna buy a vowel?

Apparently you don't know the meaning of the word schadenfreude, apple isn't in dire straights, they are not in any misfortune (on the contrary) so I can't be having schadenfreude about them. It's not schadenfreude when you are critical of the new apple tv interface. Nice try though, and as always it's a pleasure to see you are always about three steps behind me waiting to jump on what I say.

post #29 of 33
Quote:
Originally Posted by myapplelove View Post

Apparently you don't know the meaning of the word schadenfreude, apple isn't in dire straights, they are not in any misfortune (on the contrary) so I can't be having schadenfreude about them. It's not schadenfreude when you are critical of the new apple tv interface. Nice try though, and as always it's a pleasure to see you are always about three steps behind me waiting to jump on what I say.

 

It was with great amusement to see that, ironically, you yourself don't seem to know the definition 'schadenfreude'.

 

Can myself, and the other forum members of AppeInsider, request that all your future posts be checked by your mummy in the future, in order to avoid any time-wasting drivel?

 

Is that something that we may be able to arrange?

 

Here's the definition:

 

"pleasure derived from the misfortunes of others"

 

You'll notice that nowhere in that definition does it mention the level of misfortune required. Large or small: any pleasure taken in misfortune is classed as schadenfreude.

 

Ironically, I'm feeling some schadenfreude myself now towards you, but then I never claimed not to, and If you think I'm waiting behind you ready to jump then I think you've seriously over-estimated your importance to me, but I can understand how that would be important to you. ;-)

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post #30 of 33

oh, so you think apple's misfortune is their new atv interface then? Is it such a miserable failure? You sure can talk trash, but logic isn't your strong point. Does it really matter? I wouldn't think so, how hard is it to clean peoples' pools without falling in? 

post #31 of 33
Quote:
Originally Posted by myapplelove View Post

oh, so you think apple's misfortune is their new atv interface then? Is it such a miserable failure? You sure can talk trash, but logic isn't your strong point. Does it really matter? I wouldn't think so, how hard is it to clean peoples' pools without falling in? 

 

Hate to bust your bubble, kiddo, but neither myself nor anybody else in this thread said anything about the Apple TV interface.

 

I believe you may be suffering from multi-thread confusion syndrome.

 

Please tell your mum, to tell you, that we'd all like you to move slowly away from the input device, take three steps backward, and place your hands on the top of your head.

 

Pool cleaner?

 

Get with the program.

 

According to Samsung, we're all baristas here.

 

coffee-fun01.jpg

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post #32 of 33
Quote:
Originally Posted by scotty321 View Post

I think it's absolutely terrible that the previous CEO's of RIM threw this guy Thorston Heins under the bus for their mistakes. They should have done the responsible thing: taken blame for their mistakes, and shut down their company. Instead, they're making the company go bankrupt under this guy instead.

 

I'm sure Thorston is well-compensated. Like those Umbrella corp guys in Resident Evil who put on full biohazard gear and have to go in and kill all the zombies and get rid of all the evidence. That's Mr. Heins. 

post #33 of 33
Quote:
Originally Posted by Alfiejr View Post

yup, RIM is down to its last desperate Hail Mary play - BB 10. it needs a touchdown just to stay in the game.

 

yeah, FB would be smart to buy 'em up. but i think Zuckerberg thinks he's the next SJ. or at least BG.

 

Good analogy. I was going with "Betting The Farm"... In this case, with not much rain forecast. It could be ugly.

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