RIM sees fall in subscriptions as profits plummet

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RIM sees fall in subscriptions as profits plummet

Caroline Baldwin

BlackBerry maker Research in Motion (RIM) has announced another set of disappointing quarterly financial results.

The results which reflect BlackBerry’s third quarter ending December 1 2012, state that the company made a net profit of $9m over the three months, down from $235m last quarter and $265m 12 months ago.

The company’s revenues for the quarter totalled $2.7bn, down 47% from $5.2bn a year earlier, while its customer subscriptions also fell from 80 million in the second quarter, to 79 million this quarter. This follows two previous quarters of decline for the company.

RIM shipped 6.9 million BlackBerry smartphones and 255,000 BlackBerry PlayBook tablets across the quarter. This was a decline from the previous quarter’s shipments of 7.4 million smartphones, but an increase in the number of PlayBook tablets from only 130,000 in its second quarter ending September 1.

The company hopes to regain some of its profits through the launch of its new operating system BlackBerry 10 at the end of January. The operating system is currently being put through technical acceptance programs with more than 150 carriers, while beta trials of technical acceptance programs are underway at 120 enterprises.

“This is an exciting time and our carrier partners, application developers and employees are all looking forward to unveiling the innovation and excitement of BlackBerry 10 to our customers on January 30, 2013,” said RIM CEO Thorsten Heins,  

However, the market for BlackBerry has changed in recent years. Devices predominantly made for consumers, running Android and iOS operating systems, have made their way into the business world, and recent studies have claimed RIM will be a distant memory within five years.

“Unless they can do something quickly, then the next quarter is probably going to be worse. Operating system launches are not a quick solution, they take at least a year to bed in,” said Rob Bamforth, principal analyst, at Quocirca.

“BlackBerry 10 might bring a few new features, but are they all being capitalised on by applications? This developing doesn’t usually happen instantly, that takes time and will only really get exploited over the next year,” he said. “If it is truly fantastic platform you’re still looking at nine months to a year, until it has any bearing on people’s buying behaviour and usage.”

“If a new platform had been released a year ago, things might be different and in hindsight, BlackBerry shouldn’t have bothered with a tablet; it was the wrong diversion that probably cost them."


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