No BlackBerry 10 Before January 2013
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Research In Motion (NASDAQ: BBRY), the company behind BlackBerry, recently announced that the launch of their much awaited BlackBerry 10 devices have been postponed. Now, management does not expect to roll out their latest version before the first quarter of calendar year 2013. So, users won’t get their hands on the device before January 2013, or may even have to wait until March if not further delayed. The company came out with its fiscal 2013 first quarter earnings on June 28. Let’s take a peek to see what all happened.
The quarter and its numbers
As expected, RIM’s results were disappointing as the top line plunged 33% from the year ago quarter and the bottom line was in the red at a $518 million loss, down from a profit of $695 million in first quarter 2012. This news triggered a reaction form the Wall Street which pushed down the share price by as much as 20%. The poor performance was primarily due to the lower shipment of BlackBerry smartphones during the quarter and also due to the less favorable product mix. The company witnessed the sale of lower range entry-level smartphones more than the high end ones, thus bringing down the average sales price and also the profit margin.
“BlackBerry 10” launch delayed
BlackBerry 10 devices which were initially planned to be rolled out by the end of 2012 will now probably be available by March 2013, if the developing team doesn’t again find issues which will require more time to get solved. The initial schedule which RIM provided is not realistic anymore since the developing team is facing some difficulties in bringing out the final product. The management team made it clear that the issues are not related to the handsets or the functionality of the features which will be available in the latest platform. Rather, the delay in the launch is because of the time consuming nature of the development task of integrating huge volume of codes which will be essential for smooth commercial use. RIM has worked on adding some amazing features to the BlackBerry 10 platform and expects the users to be delighted and ecstatically satisfied with the entire experience of the OS.
The latest strategies
In my last blog on RIM, I talked about strategies The Sunday Times had reported. Among the strategies, one was that RIM can make its messaging network business available for use to big players such as Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG). It seems that management actually has this as a viable strategy. In the recent earnings call, RIM officials mentioned that the company is evaluating the opportunities to license its BlackBerry 10 platform. However, management did not come out with names of possible partners. Definitely Apple and Google, and to some extent Nokia, have the highest probability to be RIM’s future partners. Through this strategy, RIM expects to increase the subscriber base of its platform.
This was just one of many strategies the management at RIM is focusing at. Along with this, the management is refocusing its efforts towards two specific target groups – Enterprise and ‘Bring Your Own Device’ (BYOD). Like I mentioned in my previous blog on RIM, the company does not want to be all for everyone. Instead of being the jack of all trades, RIM aims to be the master of one. The management is on its toes to push up its subscriber base by moving into the BlackBerry 10 platform with a stronger focus on the consumer service and satisfaction model.
The BlackBerry maker also announced its plans of downsizing. The company is going to shrink its work-force by 5,000 employees as a part of its CORE (Cost Optimization and Resource Efficiency) program over the remaining three quarters of the fiscal year. The management in no way feels good about this move, but they feel it is crucial for their long term survival and growth. The ultimate aim is to become a leaner and more agile organization which will be quick to adapt to the new alignment with the growth plans.
Concluding thoughts
Now things seem to be moving somewhat for RIM. The management has a vision and they are acting towards that. Though the management is not very hopeful for the recent future and also expects an operating loss in the coming quarter, they are pretty optimistic about the long run stability of the firm. The company is also dealing with its problem of not being able to retain its talent pool. After a series of exits, now there are signs of normalcy. Recently, Frank Boulben joined the company as the Chief Marketing Officer and Kristian Tear joined as the Chief Operating Officer. The company also promoted Rick Costanzo as the Executive Vice President of Global Sales. With all these changes going on, there is a slight ray of hope for things to improve for RIM.
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