BlackBerry 10 devices delayed as numbers disappoint - Mobile World Live

BlackBerry 10 devices delayed as numbers disappoint

29 JUN 2012

RIM said its first BlackBerry 10 device will not now be available until the first quarter of 2013, as the ailing company reported another poor set of quarterly results.

In a statement, it said that the integration of key features into BB10 has been “more time consuming than anticipated,” pushing back the launch from late 2012.

The BlackBerry-maker also confirmed its anticipated job cuts, although the size of the cull – around 5,000 staff from a workforce of 16,500 – was bigger than many expected.

Thorsten Heins, president and CEO of RIM, said that “I am not satisfied with these results and continue to work aggressively with all areas of the organisation and the board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the company on areas that have the greatest opportunities.”

In the three months to 2 June 2012, the company reported a loss of US$518 million, compared with a prior-year profit of US$695 million, on revenue of US$2.81 billion, down from US$4.91 billion.

During the period, the company shipped 7.8 million smartphones and 260,000 tablets. This compares with 13.2 million smartphones and 500,000 tablets in the same quarter in fiscal 2012.

Providing something of a positive, the company said that the overall BlackBerry subscriber base continued to grow, with increases in all regions except for North America.

In the company’s conference call, Heins said that its US revenue has stabilised, “showing only modest declines,” although churn has remained high. The company said it is “aggressively working with our carrier partners in this region to upgrade customers to BlackBerry 7.”

Internationally, revenue fell during the period, reflecting price pressure due to competition, and sales of its aging device line – a refresh is currently underway.

Putting a positive spin on the BB10 issues, Thorsten Heins, president and CEO of RIM, said that “in discussion with some of our global carrier partners on the launch plans of BlackBerry 10, many actually prefer a Q1 launch as many of their new global LTE networks will be getting in place by this time.”

Moving forward, the company plans to “streamline the BlackBerry smartphone product portfolio to offer a fewer number of devices in market at any given time.” By streamlining its range, it will reduce R&D costs, increase economies of scale, reduce marketing and sales complexity, and “provide a distinct offer for each targeted market segment.”

Heins said that it expects the first QWERTY device powered by BlackBerry 10 to launch “in close proximity” to the full-touch version, and BB7 will “continue to address the entry level and mid-segment of the market until we launch the full BlackBerry 10 portfolio.”

The executive also noted that its long-anticipated LTE PlayBooks “are in the final stages of testing with certain carrier partners, and we expect to launch these in the near future.”

RIM also said that that as a result of the shift in its BB10 timeline, the increased competitive environment, “and the identification of additional cost savings and efficiency opportunities”, it may increase the “scope and magnitude” of its cost saving efforts.

Despite the quarterly loss, the company said its total of cash, cash equivalents, short-term and long-term investments was US$2.2 billion at the end of the period, up from US$2.1 billion at the end of the previous quarter.

The company also warned it is anticipating an operating loss in the second quarter of fiscal 2013, as it continues to develop BlackBerry 10 against a backdrop of falling BlackBerry 7 sales. It also noted “pressure to reduce RIM’s monthly infrastructure asset fees.”

RIM also announced the appointment of Steve Zipperstein as its chief legal officer, joining from Verizon Wireless, where he was general counsel.

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