BlackBerry’s Uncertain Future, Trembling Stock Value

The woes for Research in Motion, the makers of BlackBerry, continue. This weekend RIM announced that their second quarter profits had dropped 59%, driven down partly by lower demand for the older phone models.

Net profits fell to $329m for the three months ending 31 August, down from $797m in the same period a year earlier.

Back in July, the company announced that it was cutting more than 2000 jobs, which is 11% of its total workforce. The company incurred one-time charges of $118 million to cover the costs of the layoffs which contributed to the lowered profits.

During the quarter, RIM shipped some 10.6 million Blackberry smartphones and about 200,000 Blackberry PlayBook tablets, which were below its own prediction of 11 – 12.5 million smartphones and the 500,00 PlayBooks that were sold in the first quarter. The sales missed very conservative analyst estimates as well.

Analysts are painting a worrying picture for the company. Market shares for RIM are on the decline in the US, UK and throughout Europe due to intense competition from iPhone and Android smartphones.

Stocks plunged as much as 23% after the announcements and investors are threatening to drop shares unless steps are taken to secure the future of the company.

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Revenues in Q2 fell 10% to $4.17 billion but in an outlook for the its current fiscal third quarter, the company said it expected revenues ranging from $5.3 billion and $5.6 billion and BlackBerry smartphone shipments between 13.5 million and 14.5 million units.

In a conference call with analysts, co-CEO Mike Lazaridis said that the newer BlackBerry Bold, Torch and Curve phones only had a few weeks of sales before the second quarter ended and strong sales of these smartphones were expected.

"We understand that the past few quarters have been challenging, we are confident that we are on track to return to growth in Q3 and beyond.” he said.

RIM has planned a software upgrade for the PlayBook in October as well as introduction of phones based on its QNX OS in 2012.

Talal is the Chief Operating Officer at ProPakistani.


  • waqas

    Rumor at internet that Nokia is going to bid for RIM

  • Furqan

    I think Nokia (Symbian) is in bigger problem thn RIM

    • waqas

      By this move Nokia will directly become the biggest share holder of corrporate sector and with OS
      Windows
      Megoo
      Symbian
      &
      Now BB
      Who else is giving that much options

  • yasir latif

    The future is now Android. I am using Samsung BADA and Android, both are perfect and rich features. Golden times of Nokia’s Symbian and BB has gone now…..

    • waqas

      you are right but just wait for
      Megoo
      Windows Nokia phones

      • Saad Awais

        It’s not Megoo, it WAS Meego.

        Nokia has discontinued it, there’ll be only 1 handset (N9) launched, based on Meego.

        And Windows Mobile OS isn’t doing great either, so it’s bleak times for Nokia ahead

        • waqas

          I still remember that when iphone launched people used called a stone
          so it is just too early to comment on Meego or Windows phone 7 with Nokia
          Also andriod apps are supported by N9.

  • Aamir

    Android is the real deal.. Just wait for the Ice Cream Sandwich OS.. It’s gonna rock!

  • WAQAS AHMAD KHAN

    Nokia seems pretty much aggressive with its one after another release of Symbian Updates (Belle). I am expecting Iphone 5 and Nokia Sea Ray to be game changer in the market. For Andorid, I am predicting stagnation soon as customers want innovation and Android is pretty much stiff in this regard.