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RIM kills off consumer business following Q4 losses

Cliff Saran

Troubled BlackBerry maker Research In Motion is closing its consumer operation.

Research In Motion (RIM) said it will focus its efforts on enterprise mobility after posting large losses for the fourth quarter 2012.

According to reports on Associated Press, RIM CEO Thorsten Heins said a turnaround required substantial change.

"We plan to refocus on the enterprise business and capitalise on our leading position in this segment," Thorsten Heins said. "We believe that BlackBerry cannot succeed if we tried to be everybody's darling and all things to all people. Therefore, we plan to build on our strength."

Revenue for the fourth quarter of fiscal 2012 was $4.2bn, down 19% from $5.2bn in the previous quarter and down 25% from $5.6bn in the same quarter of fiscal 2011.

During the quarter, RIM shipped approximately 11.1 million BlackBerry smartphones and 500,000 BlackBerry PlayBook tablets.

Reporting the Q4 2012 results, Heins said: “I have assessed many aspects of RIM’s business during my first 10 weeks as CEO. I have confirmed that the company has substantial strengths that can be further leveraged to improve our financial performance, including RIM’s global network infrastructure, a strong enterprise offering and a large and growing base of more than 77 million subscribers."

He said RIM will review its strategic opportunities including partnerships and joint ventures, licensing and other ways to leverage RIM’s assets.

Magister Advisors, which advises companies on exit strategies, noted: "RIM has already lost the consumer battle and its main asset is its enterprise customer base, so retrenching to a corporate-only focus makes sense. In our view they should sell the company while that corporate customer base remains intact."

The advisory firm believes companies like SAP, HP and Huawei could be potential buyers.

In a recent blog post, Forrester analyst Ted Schadler wrote: "RIM has been focused on the wrong assets for the past three years, competing in a consumer market against the most powerful consumer brands in the world and suffering from tablet night terrors. It's not working."

However, RIM's remaining enterprise ambitions are not straightforward.

The Q4 2011 iPass Mobile Workforce Report found the iPhone had unseated BlackBerry as the top smartphone among mobile employees with 45% market share. BlackBerry market share declined slightly from 35 percent in 2010 to 32 percent in November 2011. 

At the same time Android nearly doubled its market share year over year, growing into the number three spot (surpassing Nokia/Symbian) with 21% market share.

The MWR was based on a study of over 2,300 mobile enterprise employees at 1,100 enterprises worldwide.


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